{"id":196,"date":"2015-04-14T11:41:50","date_gmt":"2015-04-14T10:41:50","guid":{"rendered":"http:\/\/www.lestarif.fr\/?p=196"},"modified":"2015-04-14T11:41:50","modified_gmt":"2015-04-14T10:41:50","slug":"solar-wind-power-prices-often-lower-than-fossil-fuel-power-prices-cleantechnica","status":"publish","type":"post","link":"http:\/\/www.lestarif.fr\/?p=196","title":{"rendered":"Solar & Wind Power Prices Often Lower Than Fossil Fuel Power Prices | CleanTechnica"},"content":{"rendered":"

Solar & Wind Power Prices Often Lower Than Fossil Fuel Power Prices<\/p>\n

viaSolar & Wind Power Prices Often Lower Than Fossil Fuel Power Prices | Cl<\/span>eanTechnica<\/a>.<\/p>\n

By Bob Wallace & Zachary Shahan<\/p>\n

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Wind and solar electricity have become some of our least expensive ways to generate electricity in several markets around the world<\/a>.<\/b><\/em><\/p>\n

Wind is now the cheapest way to bring new electricity generation to the grid in the US as well as many other countries. Solar PV costs are rapidly dropping and solar is expected to join wind over the next few years. Furthermore, low-cost utility-scale solar is already beating out all other\u00a0sources of electricity in some bidding processes, and home solar\u00a0power beats the price of retail electricity (on average) in many markets.<\/em><\/p><\/blockquote>\n

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Feel free to copy the\u00a0above paragraph &\u00a0link and use in response\u00a0to claims that wind and solar are too expensive.<\/em><\/p>\n

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For\u00a0responses to other anti-cleantech myths, see:\u00a0Anti-Cleantech Myths Debunked (Your #1 Resource)<\/a><\/strong>.<\/em><\/p>\n

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This is the first in a series of resource papers we intend to publish. We are attempting to pull the best information together on several topics and present it in a way that is understandable. \u00a0<\/em><\/p>\n

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We intend to update these pages as new information appears and make the main summary page\u00a0the \u2018go to\u2019 place to keep up with important\u00a0issues concerning renewable energy, efficiency, and electric vehicles. \u00a0And this is where you, the reader, come in.<\/em><\/p>\n

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We intend for\u00a0this project to be a community-driven project. Use the comment section below the article to add corrections and new\/better data. If you think the article has become out of date, then use \u201cReply\u201d to post a request for an update. We\u2019ll see it.<\/em><\/p>\n

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If you see someone on any site make a claim you think is\u00a0wrong, feel free to copy over the summary and link as your reply or part of your reply to that person.<\/em><\/p>\n

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Before diving into specifics, let\u2019s get the requisite context on subsidies out of the way: Some of the information below presents\u00a0the price\u00a0after subsidy, while some presents unsubsidized prices (we try to make it very clear in all cases if subsidies are included or not). Wind and solar subsidies are very simple and clear. Fossil fuels, however, get many subsidies that are now baked into the tax code or \u201chidden\u201d in other ways. Furthermore, the biggest fossil fuel subsidies are the externalities that we pay through health problems and early death. These extra societal costs are huge, and in a \u201cperfect free market\u201d would be internalized by fossil fuel companies, but they are not.<\/p>\n

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One study conducted by the then-head of the Harvard Medical School found that the extra health and environmental costs of coal in the US comes to\u00a0$500 billion\/year<\/a>. \u00a0Health costs alone run between $140 billion and $242 billion every year. That means that we are paying between 9 cents and 15 cents per kWh in tax and health premium dollars for every kWh of electricity we generate using coal.<\/p>\n

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Ignoring those massive externalities\/subsidies for fossil fuels (which no one in their right mind should do), let\u2019s dive into a\u00a0fun look at the numbers.<\/p>\n

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Levelized Cost of Electricity (LCOE)<\/strong> is often used in the electricity industry when discussing price. It\u00a0is generally the estimated price of electricity<\/a> coming from power plants when taking into account capital costs, operation and maintenance costs, performance, and fuel costs. A recent study from Lazard shows that wind power and solar power are already cost-competitive<\/a>\u00a0with all other sources of electricity\u00a0when it comes to LCOE:<\/p>\n

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\"solar<\/a><\/p>\n

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Another way to examine prices is by looking at prices agreed upon\u00a0in power purchase agreements (PPAs).<\/p>\n

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Power purchase agreements (PPAs) are contracts between sellers (wind farms, solar farms, etc.) and buyers (utility companies, large businesses, etc.) in which the seller agrees to provide a fixed amount of electricity per year and the buyer guarantees to pay an agreed upon price. PPAs typically run for 20 to 25 years.<\/p>\n

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Wind power<\/strong>,\u00a0on average, sold\u00a0for\u00a02.5\u00a2 per kilowatt-hour<\/a>\u00a0in the US in 2013, when looking at PPA prices\u00a0(2014 numbers are due to come out this week). That\u2019s the average for all reported PPAs, which means they\u2019re a bit under 4\u00a2 per kilowatt-hour without subsidies. These super-low prices are extremely\u00a0hard to beat, and demonstrate why so much of the\u00a0electricity generation capacity added in the past few years has come from wind power plants.<\/p>\n

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\"wind<\/a><\/p>\n

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Solar PV power prices<\/strong> vary a lot, based on region, size of the project, type of technology, and other factors, but we\u2019re already seeing solar PV projects win PPAs where the promised\u00a0electricity is cheaper than electricity from new natural gas, coal, or nuclear power plants.<\/p>\n

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Solar prices are still dropping very rapidly. Below, we\u2019re going to look at \u201cbest current prices,\u201d as they should be representative of what is possible and even likely in the near future.\u00a0One can find more expensive examples, but the market will not support the more expensive, it will continue to seek out the least expensive.<\/p>\n

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In Austin<\/a>, a SunEdison power plant<\/a> won a PPA to sell Austin Energy electricity for less than\u00a05\u00a2\/kWh. Federal subsidy would come to ~\u00a02\u00a2\/kWh, which is much lower than then the estimated 9\u201327\u00a2\/kWh in health costs that coal brings us, and I would presume less than the health and environmental costs of natural gas (but I haven\u2019t seen a thorough analysis on that) \u2014 and that\u2019s not even taking into account their own subsidies. (Note that Austin Energy has now designated solar power as its default energy generation method<\/a> through 2024.)<\/p>\n

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In New Mexico, in 2013, a First Solar<\/a>* power plant won a PPA with a price of\u00a05.8\u00a2\/kWh<\/a>, while new coal was going for 10\u201314\u00a2\/kWh. That 5.8\u00a2\/kWh price doesn\u2019t take into account ~4.7\u00a2\/kWh of subsidies, but, again, the coal price doesn\u2019t take into account\u00a09\u201327\u00a2\/kWh in health costs.<\/p>\n

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In Dubai (in the UAE), ACWA Power bid just\u00a05.98\u00a2\/kWh<\/a> to provide electricity from a solar power to\u00a0the Dubai Electricity & Water Authority (DEWA) \u2014 without subsidy. That was a world record low bid, but even if ACWA Power didn\u2019t exist, the record would have been broken\u00a0by the second-lowest bid, which was 6.13\u00a2\/kWh and came from\u00a0Fotowatio Renewables & Saudi Abdul Latif Jameel Energy. Both bids came well below the average price of electricity from natural gas in the region<\/a>,\u00a09\u00a2\/kWh.<\/p>\n

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Lastly, while we didn\u2019t get to see any numbers on a Minnesota case, a judge ruled that a solar power plant there offered a better deal<\/a> for ratepayers than several competing natural gas power plants.<\/p>\n

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\"levelized<\/a><\/p>\n

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Price predictability or risk<\/strong> is another important issue to consider. Solar power plants and wind power plants don\u2019t have fuel costs, of course, and have very little maintenance and operation costs. Their big costs are right up front, which makes predicting prices for a PPA very easy. Coal power and natural gas power prices, on the other hand, can vary a great deal depending on the cost of the fuel. In the gas of natural gas, price volatility is particularly strong. This makes the projects (and basing electricity generation decisions on\u00a0them) quite risky, financially.<\/p>\n

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While not often discussed, this is one more thing that makes solar or\u00a0wind power a smarter financial decision.\u00a0Utilities value the ability to predict future prices. Doing so makes it easier for them to set rates.\u00a0Some are signing solar and wind PPAs in order to lock in stable prices over time.<\/p>\n

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Retail power prices \u2260 wholesale power prices<\/strong>.\u00a0The above discussion is all about wholesale power. Utility-scale solar power plants produce electricity at\u00a0a lower cost than rooftop solar power systems (thanks to economies of scale), but the difference is generally not as wide as the difference between retail and wholesale electricity prices. That means that rooftop solar power is\u00a0cheaper than retail electricity from your \u201cfriendly neighborhood utility\u201d (sarcasm<\/sup>) in even more places than utility-scale solar power beats other options on the wholesale electricity market. On average, rooftop solar power has hit \u201csocket parity\u201d or \u201cgrid parity<\/a>\u201d in Germany, the Netherlands, Italy, Australia, Hawaii, California, Arizona, and\u00a0several\u00a0other countries and US states.<\/p>\n

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Even though a utility can typically generate or purchase solar electricity for less than end-users can generate it, the utility has distribution costs that turn their wholesale costs into retail costs. Furthermore, it is looking to earn a good profit on its customers. Again, these are some of the reasons rooftop solar power is cheaper than retail electricity for tens or even hundreds of millions of people.<\/p>\n

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Deutsche Bank actually predicts<\/a> that all 50 US states will be at grid parity by 2016 \u2014 that\u2019s next year. (Note that it takes several<\/em> years to build coal, natural gas, or nuclear power plants.) Deutsche Bank also predicts<\/a> that ~80% of the global electricity market will be at grid parity by 2017. This is why solar power is scaring coal companies, natural gas companies, and utilities so much, and why you see so\u00a0many\u00a0anti-solar myths out there being repeated over and over again\u2026 despite being several years out of date.<\/p>\n

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\"solar<\/a> \"DB-countries-grid-parity-590x411\"<\/a><\/p>\n

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If you have a price of solar in your head from\u00a05\u201310 years ago,\u00a0it is probably several times higher than\u00a0reality<\/a>. But now that you\u2019ve read through this article, you should have a much better sense for the current cost of solar power\u00a0(and wind power as well). Be sure to help educate others by sharing with friends!<\/p>\n

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*Full Disclosure: I\u2019m long FSLR.<\/em><\/p>\n

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter<\/strong><\/a>, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter<\/strong><\/a>, electric vehicle newsletter<\/strong><\/a>, or wind energy newsletter<\/strong><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Solar & Wind Power Prices Often Lower Than Fossil Fuel Power Prices viaSolar & Wind Power Prices Often Lower Than Fossil Fuel Power Prices | CleanTechnica. By Bob Wallace & Zachary Shahan   Wind and solar electricity have become some of our least expensive ways to generate electricity in several markets around the world. Wind …<\/p>\n

Continue reading ‘Solar & Wind Power Prices Often Lower Than Fossil Fuel Power Prices | CleanTechnica’ »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6],"tags":[],"_links":{"self":[{"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=\/wp\/v2\/posts\/196"}],"collection":[{"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=196"}],"version-history":[{"count":1,"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=\/wp\/v2\/posts\/196\/revisions"}],"predecessor-version":[{"id":197,"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=\/wp\/v2\/posts\/196\/revisions\/197"}],"wp:attachment":[{"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=196"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.lestarif.fr\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}