Study: Solar energy cost will hit parity by 2015

[OKIsItJustMe]

http://www.bizjournals.com/phoenix/stories/2008/06/16/daily39.html

Wednesday, June 18, 2008 - 9:32 AM MST

Study: Solar energy cost will hit parity by 2015

Phoenix Business Journal

A new study makes the case that solar power is emerging as a cost-effective hedge against fossil fuels and is likely to reach parity with retail-electricity rates in most regions of the U.S. in less than a decade.

The Utility Solar Assessment Study, produced by clean-tech research and publishing firm Clean Edge Inc. and green-economy nonprofit Co-op America, said that for the first time, solar power is beginning to reach cost parity with conventional energy sources. As solar prices decline and the capital and fuel costs for coal, natural gas, and nuclear plants rise, the U.S. will reach a crossover point by around 2015, the study found.

Installed solar PV prices are projected to decline from an average $5.50 to $7 peak watt (15-32 cents kWh) today to $3.02 to $3.82 peak watt (8-18 cents kWh) in 2015 and $1.43 to $1.82 peak watt (4-8 cents kWh) by 2025.

The investment to arrive at 10 percent solar in the U.S. is not small, the study adds, reaching $450 billion to $560 billion between now and 2025 -- an average of $26 billion to $33 billion per year.

...

http://www.cleanedge.com/reports/reports-solarUSA2008.php

Utility Solar Assessment (USA) Study

The following is an excerpt from http://www.cleanedge.com/reports/pdf/USA_Study.pdf">Utility Solar Assessment (USA) Study. ...

The Utility Solar Assessment (USA) Study, produced by clean-tech research and publishing firm Clean Edge and green-economy nonprofit Co-op America, provides a comprehensive roadmap for utilities, solar companies, and regulators to reach 10% solar in the U.S. by 2025.

The study finds that significantly scaling solar power in the U.S. will require the active involvement of utilities. The study delivers a to-do list for the three key stakeholders in the nation's solar industry. Among others, the action items include:

• For utilities: Take advantage of the unique value of solar for peak generation and alleviating grid congestion; implement solar as part of the build-out of the smart grid; and adapt to new market realities with new business models.
• For solar companies: Bring installed solar systems costs to $3 per peak watt or less by 2018; streamline installations; and make solar a truly plug-and-play technology.
• For regulators and policy makers: Pass a long-term extension of investment and production tax credits for solar and other renewables; establish open standards for solar interconnection; and give utilities the ability to "rate-base" solar.

...

[Ian David]

1. Off-shore platforms won't produce until 2030. ANWR won't produce until 2020. Solar wins at 2015. n/t

[On the Road]

2. The Thing About Most of These Articles

is that the authors rarely states what the cost per peak watt or kWh they would need to hit to product parity -- apparently somewhere between $3.02 and $3.82 per peak watt.

Or for what matter what the expected price of oil or coal is being used in 2015 or 2025.

That is a big decrease, and it would certainly make solar more affordable. But it has to be compared with the sources it's replacing, and the assumptions behind a cost decrease of 67-80%.

[OKIsItJustMe]

3. Numbers from the report...

...

Equally important, we project that solar PV will reach cost parity with conventional retail electricity pricing, on a straight kWh rate basis, throughout much of the U.S. by around 2015.

We project that the cost for crystalline silicon PV systems will drop from an average of $7 peak watt (19-32 cents kWh) today to approximately $3.00 (8-14 cents kWh) a decade from now. Thin-film PV systems and low-price, bulk-purchased crystalline PV systems are projected to drop from around $5.50 per peak watt today (15-25 cents kWh) to $3.00 peak watt in 2015 (8-14 cents kWh) and less than $1.50 peak watt (4-7 cents kWh) in 2025. In our utility-scale concentrating solar power (CSP) calculations we show an average price of $3.50 per watt (around 18 cents per kWh) in 2007 declining to around $1 peak watt (approximately 5 cents per kWh) in 2025.

Recent industry developments, particularly large-scale solar deployment plans announced by major utilities, support the price projections outlined in this report. As utilities and others scale up their solar efforts, they are reaching economies of scale unlike anything we’ve seen in the past. Southern California Edison’s recently announced 250 MW rooftop installation program is the perfect case in point. SCE could reach the $3.50 peak watt installed price as early as 2010. This supports the case that such price points are achievable and that some players may even get there sooner.

It is also possible that one or more disruptive players could enter the market at a scale and price points as early as 2010 that could achieve solar cost parity even sooner. While this report doesn’t specifically map this more accelerated scenario, utilities and policy makers should keep a watch out for even more favorable solar cost comparisons than discussed by this report.

...

[On the Road]

4. Thank You for the More Detailed Numbers

I must not have seen that part of the article.

Do you know what the comparable amounts utilities are paying for other sources?

[OKIsItJustMe]

5. Well... according to this...

In 2002:

http://www.pbs.org/now/science/coal.html

Percentage of the world's coal reserves located in the U.S.:        25%
Coal's percentage of U.S. energy reserves:                          90%
Percentage of electricity in the U.S. generated by coal:            50%
Cost of a megawatt of energy produced by coal:               $20 to $30
Cost of a megawatt of electricity produced from natural gas: $45 to $60

...

More current data should be here:
http://www.eia.doe.gov/oiaf/aeo/assumption/pdf/electricity.pdf#page=3

[NYC_SKP]

6. We need another chart:

A chart showing "Years supply remaining in existing reserves under current trends, by source"

Fill in the blanks:

Petroleum __________
Natural Gas __________
Coal __________
Uranium __________
Propane __________

Solar __________
Wind __________
Geothermal __________
Hydropower__________
Biomass __________

That's a chart that matters to our children's children and should consequently matter to us, right now.


:patriot:

[ElectricGrid]

10. How could you miss it?

that's 2/3rds of the article pasted right there.

[On the Road]

15. To Tell You the Truth, I Still Don't See It

The headline of the article mentions parity, but there's no mention of what parity is now or what the authors project it to be. Since that's the title of the article, it might have been a good idea to include the comparison.

Per the article, the cost of solar PV in 2015 is expected to be anywhere from $.08 to $.18 per kWh. That is a 125% spread from bottom to top. It is not clear what number in that range represents parity.

It is also not clear what the equivalent cost for hydrocarbons is per the authors. When you link to the actual study, the authors give estimates for the retail price of electricity in 2007, 2015 and 2025. Here's the chart the article seems to be referencing:



When you compare charts, it equates to a 27% increase from 2007. That might bear out, but it was not the experience during the last energy crisis, and readers may want to know what assumptions the authors are making.

The chart also mixes apples and oranges by comparing a production cost for solar PV to a retail cost for electricity. Not all readers know what the relationship is. For example, if the cost to a utility is 20% lower than the retail price, that whole orange rectangle has to be moved one-fifth of the way to the left axis. But it may be a very different number. And those assumptions apparently hold true only if cumulative investment totals $180-$230 billion ($26-33B times seven years). Also, the authors are comparing a variable cost for hydrocarbons with a fixed cost for solar. There are some major assumptions on useful life, interest, etc that would be good support for the study (although it's too much detail for the web articles).

By contrast, the authors of the study do a much better job of putting the investment in perspective. Their goal is 10% solar power by 2025. To reach that would require $26-$33 billion/year. Sound like a lot, but busines as usual required $70 billion in 2007. That puts it in context and makes it appear reasonable.

After reading both articles and the linked study, I have absolutely no idea whether what the authors project is likley to happen. It may be. But I suspect that proponents of solar are so used to avoiding cost-benefit analyses that they have difficulty writing a transparent study. That or they're simply trying to get a misleading visual that is not likely to happen in seven years or seventeen years.

This is not an attempt to be picky or deny the authors' points. They are questions that anyone in a position of responsibility in government or industry would ask before committing any money or changing any policy. They are asked routinely of businesses in any industry. The solar people just need to get better at it.

[kristopher]

17. You raise good points

I am downloading the study now and might respond differently once I've reviewed it, but I see one point in your critique that i wanted to address. The comparison of PV produced electricity with retail costs is valid; even if it isn't the entire story. Much of the PV market isn't in the industrial scale systems, it is in home systems where it displaces electricity at the retail level.
Another aspect of the price decrease that is significant to the growth of PV at the industrial scale is that PV produces best when the electricity demand is at its peak - midafternoon in the summer. Spot market electricity prices at that time are frequently 20-30X the price of baseload contract ahead electricity. This increased profit potential will certainly drive a round of investment that will contribute to even greater commitment of manufacturing resources to PV production.

[On the Road]

21. Do You Know What the Numbers are for Small-Scale Installations?

or the general relationship? Small-scale is usually more expensive, but maybe that doesn't hold here.

I know someone who is planning to convert his townhouse to solar and was surprised to find that even with self-installation it's going to cost $30-35k. Do not know how that translates into kWh or any other metric.

What you say about time of day is interesting -- that could be solar's saving grace. So that would mean that instead of an average kWh cost of 4 cents, peak costs are $.80-1.20? That could make it prove in much, much faster.

[Finishline42]

20. The difference between coal - nuclear and solar -wind

The difference between coal/nuclear and solar/wind has to do with current cost vs future cost. When a coal or nuclear plant is built, current cost is the cost to build the plant and known to some degree but future cost is uncertain, nobody knows what coal or uranium will be selling for 10-20 yrs in the future. The cost for power generation by solar or wind is almost totally current cost. Once in place there is very little long term cost to add, probably the aspect that the utility crowd doesn't like.

Right now, the cost for coal/nuclear is almost certain to increase dramatically while the opposite is true for solar/wind.

[One_Life_To_Give]

13. This assumes 100's of MW Installations

So their pricing numbers are based on a Industrial scale centralized PV Electric generation facility. As opposed to the few KW distributed systems that are commonly thought of. What would the cost per peak watt be for a little 5KW installation instead of a 250MW scale? Anyone know how this compares to Solar Thermal generation systems?

[OKIsItJustMe]

14. From above:

... In our utility-scale concentrating solar power (CSP) calculations we show an average price of $3.50 per watt (around 18 cents per kWh) in 2007 declining to around $1 peak watt (approximately 5 cents per kWh) in 2025. ...

Read http://www.cleanedge.com/reports/pdf/USA_Study.pdf">the report itself for more information.

[NNadir]

7. Every 20 minutes we get another solar industry report predicting that the solar industry...

will be competitive by such and such a year.

It sounds like fund raising for stocks, sort of like the time Amory Lovins sold a bunch of investors on some swill about the hydrogen HYPErcar that will be in showrooms by 2005.

Come to think of it, Amory Lovins predicted that solar energy will be competitive by 1980.

Quoth he:

Ingenious ways of backfitting existing urban and rural buildings
(even large commercial ones) or their neighborhoods with efficient
and exceedingly reliable solar collectors are being rapidly developed
in both the private and public sectors. In some recent projects, the lead
time from ordering to operation has been only a few months. Good
solar hardware, often modular, is going into pilot or full-scale production...

...Recent research suggests that a largely or wholly solar economy can
be constructed in the United States with straightforward soft technologies
that are now demonstrated and now economic or nearly economic."
Such a conceptual exercise does not require "exotic" methods
such as sea-thermal, hot-dry-rock geothermal, cheap (perhaps organic)
photovoltaic, or soIar-thcrmal electric systems. If developed,
as some probably will be, these technologies could be convenient, but
they are in no way essential for an industrial society operating solely
on energy income.

Lovins, Amory, Foreign Affairs 1976, pp 65-96.

Nothing "exotic?"

If nothing exotic was required way back in 1976, how come we need another announcement every twenty minutes about the latest "solar breakthrough? in 2008?"

I've been listening to six years of "breakthroughs" here, and still solar electricity has yet to produce 1 exajoule out of 500 exajoules now used by humanity.

In the last two weeks here, we've heard the solar industry's MBA's announce that solar electricity will be competitive by 2015, 2010, 2009, 2020, 2025. In fact, if you have the stomache to look at wishful thinking - you could probably find every year in the next decade and a half represented.

And what does solarbuzz say? http://www.solarbuzz.com/

Well then...

In 2003 if you look, you will find people, I'm sure, who would be announcing that solar electricity would be competitive by 2008. They just, no doubt extrapolated the curve that would prove to have a minimum.

As for the 2015 talk, there is no mention of the existence of something called night nor of the internal and external costs of batteries - and who cares about costs anyway since poor people don't matter - and no note that earth's output of dangerous fossil fuel waste now approaches 30 bilion metric tons per year. Thus 2015 is 180 billion tons from now.

But in reality, it's just more soothsaying of the type we have heard endlessly about every form of energy.

In any case, even if it became competitive - a long shot given 40 years of wrong predictions by the solar industry about itself - there's no evidence whatsoever that the solar industry could produce more than the equivalent of a few gas tanks.

There is also no evidence that they have any idea where to put the waste from the billions of tons of material that would need to process this magical transformation.

But let's be sure, nothing is wrong if you can issue comforting platitudes about the future.

I grew up planning to go to Jupiter on the 2001 Space rocket out of the moon base.

[tinrobot]

8. Did Amory Lovins also predict Ronald Reagan?

The man who eliminated tax credits for solar energy and removed the solar panels from the White House roof. Federal research-and-development funding for solar power fell from $557 million in 1980 to $81 million in 1990. At the same time, oil prices plummeted, diminishing demand for alternatives and taking energy off the agenda of the nation and much of the environmental movement.

Things could have been very different.

[Dead_Parrot]

9. Reagan was not an omnipotent time-lord

The "a few years" meme has been a wile for some time: Granted, Reagan was a complete fucknuts, but it's tricky to failures on 1960's Japanese research on him. Or for that matter, the definition of "a few years".

[OKIsItJustMe]

12. It all comes down to money

A lot of research that could have been done in the past wasn't done, simply because oil (and coal) were cheap.

Now that there is financial impetus, lots of fruitful research is being done.


Compare this to antibiotics (if you will.) I have friend who's a/an hospital pharmacist; He questions Drs' prescribing certain antibiotics, since he is trying to hold them in reserve for bacteria which have become resistant to everything else in his pharmacy. He and I were trying to estimate how long they would be effective.

Essentially, no research was being done into developing new antibiotics, not because they aren't needed, but because there was very little money to be made.

It takes a lot of R&D to develop a new antibiotic; and (unlike a cholesterol-lowering drug) patients tend not to take them for the rest of their lives. Furthermore, as bacteria become resistant to them faster and faster, the sales life of them is limited.

So, for financial reasons, what is a vitally important technology was largely being ignored.

So it was (for too many years) with solar. Yes, anyone with a little foresight could see it would be needed, but without the financial incentive...

[Dead_Parrot]

16. I think there's limits to that argument, though

Here's a chart I've been waving around recently waiting for someone to comment on it:



Unsurprisingly, the R&D budgets for fossil and nuclear dwarf those for renewables, although it's nice to see the bulge from the Carter budget.

What I find interesting, though, is that solar has consistently had more research dollars thrown at it than Geothermal, Hydro, Wind and Biomass combined - even though each one of them outperforms solar in ever metric except "ownability". I can't help wondering how many "few more years" we'll have to go though before it finally pays off.

Just for the record, I do actually like solar - or at least, solar thermal. The fascination with having huge slabs of highly refined semiconductor nailed to your roof escapes me, though.

[kristopher]

19. I like your chart, it's informative.

I think you may be looking at solar from the wrong end of the telescope. True, the R&D hasn't really produced any significant breakthroughs that are visible. Neither have the moneys spent on the other renewables. The key reason is that the technologies (with the exception of solar) aren't really that 'improvable'. They are manifestations of simple engineering that works very close to the maximum efficiencies possible for them. For example, modern wind turbines are around 45% efficient with a theoretical maximum of around 59%. Solar PV, on the other hand, still has a rating of about 15-20%, which leaves a great deal of room for improvement.

But the real difficulty I see in your perspective is a common one: you are equating the R&D with viability and conceive of solar as a product that isn't performing in the market place because of needed improvements in efficiency. While that is true to a degree, the larger reason is one of public policies that have pursued cheap energy from fossil fuels without regard to the known external costs of those fuels.
Here is a timeline on our understanding of climate change:
1859: Tyndall establishes that CO2 is a greenhouse gas.
1890s: Arrhenius surmises that the climate of the earth could potentially be changed by the CO2 emitted from the human use of fossil fuels.
1930s: Guy Callendar assembles evidence that the effects of CO2 emissions from fossil fuels is able to be perceived.
1950s: Plass, Suess and Revelle follow up on Callendar’s research.
1960s: Keeling uses systematic measuring to establish that concentration of atmospheric CO2 is rising.
1965: Environmental Pollution Board of the President’s Science Advisory Council warns that by 2000 there will be 25% increase in CO2 concentrations from 1965 level. “his will modify the heat balance of the atmosphere to such an extent that marked changes in climate...could occur.”
1965: President Johnson states in Special Message to Congress that “This generation has altered the composition of the atmosphere on a global scale through...a steady increase in carbon dioxide from the burning of fossil fuels.”
1966: U.S. National Academy of Sciences Panel on Weather and Climate Modification repeats warning.
1974: Weinberg, Director of Oak Ridge National Laboratory “realized that climatological impacts might limit oil production before geology did.”
1978: Robert White (NOAA’s first administrator and a President of the National Academy of Engineering states “We now understand that ... carbon dioxide released during the burning of fossil fuels, can have consequences for climate that pose a considerable threat to future society ... The potential ... impacts ominous.”
1979: JASON committee (Stanford Research Insitute) publishes 184 page technical report warning of expected doubling of CO2 concentrations “by about 2035” with wide variety of undetermined possible geophysical, economic, political and social consequences.
1979: Carter Science Advisor Frank Press requests National Academy of Sciences for review of JASON committee report. Academy committee headed by MIT meteorologist Jule Charney concurs with JASON report “If carbon dioxide continues to increase, find no reason to doubt that climate changes will result, and no reason to believe that these changes will be negligible.” (Oreskes, 2006)

In spite of this knowledge the conservative approach was one that favored the entrenched power structure at the expense of dealing with the problem. If, at the time Carter started encouraging the use of alternatives, we had pursued the manufacturing of PV systems with enough vigor to firmly establish the manufacturing base, PV panels would be dirt cheap by now and would be a mainstay of our power system. The "we need to improve the technology" meme is a standard ruse put out by conservative think tanks to sideline a viable threat to the conservative power base. We don't need to improve the technology so much as we need to create a market that builds the manufacturing base to the point where we are stamping PV panels out like flat panel HD tvs.

[Kolesar]

22. By Ross Gelbspan's account, the energy industry is the most powerful lobby in the world

They have been running "everything" for as long as I recall. Hell, they kill people in places like Nigeria to get their way.

[kristopher]

25. Thanks for the tip on Gelbspan; I'd not heard of him.

I'll get his book:

"...Bush's electoral success, moreover, was heavily funded by big coal and oil. His 2000 presidential win can in large measure be traced to his victory in West Virginia, a state no other Republican presidential candidate had ever won. That win resulted from the substantial support of the state's coal industry. One coal executive alone, James Harless, raised $275,000 for the Bush campaign in West Virginia, five times more than Al Gore raised there.

Five months after Bush's inauguration, a West Virginia Coal Association official told a meeting of the organization: "You did everything you could to elect a Republican president. Now you are already seeing in his actions the payback ... for what we did."

That "payback" came in the form of an about-face on a campaign promise Candidate Bush made in 1999 -- to repeat nationally what he had done as governor of Texas, imposing a carbon dioxide emissions cap on the state's coal-fired power plants. In a letter to four Republican senators, Bush said he was backing away from the cap because of the "incomplete state of scientific knowledge of the causes of, and solutions to, global climate change and the lack of commercially available technologies for removing and storing carbon dioxide."

Particularly pleased by Bush's flip-flop was Irl Englehardt, chair of the Peabody Group, the country's biggest coal company. Englehardt had donated $250,000 to the Republican National Committee, and served as an adviser to the Bush-Cheney Energy Transition Team. On May 17, 2001, when the Cheney task force unveiled its new energy plan, it not only called for an expanded role for nuclear power and the opening of the Arctic National Wildlife Refuge to oil exploration, but for the construction of between 1,300 and 1,900 new power plants, most of them powered by coal. Within a week of the plan's unveiling, the Peabody Group -- a privately held entity for its entire 120-year life -- made an initial public offering (IPO) of shares and went public. Overnight, its stock jumped from $24 to $36...."

http://www.grist.org/advice/books/2004/07/21/gelbspan-boiling/

[Nederland]

23. Things wouldn't have been different

All the money that Jimmy Carter would have spent on solar would have been wasted because the very ideas that have improved solar so much in past years didn't even exist back then. Just go back to all those old 1970's articles on solar and look for the word nanotechnology--you won't find it because the field barely existed, and certainly nobody connected it to solar. More importantly, the cancelling of Carter's solar research budget didn't stop trillions of dollars being poured into how to make better faster computers. The result of that research, and developing an industrial based that knows how to work with silicon, has helped solar more than anything. That's why the Cypress Semiconductors decided to enter the solar arena. They realized that all the knowledege they had accumulated over the years learn to producing better computer chips was very applicable to building better solar panels.

[ElectricGrid]

11. Should we count the number of aticles proclaiming Nukes? You sound alot like McCain.

[NNadir]

18. Feel free to do so. However, be advised of my long held opinion that anti-nukes can't count.

In general, most of them write short snippy meaningless platitudes asserting things 616 > 860.

But no matter.

And while you're engaged in your simpleton demonstration of counting, let's see if you have the guts to call for the banning of dangerous fossil fuels.

http://www.dailykos.com/story/2006/11/24/195214/27

In fact, while you're counting, how about including my entire list of diaries on the other website where I write.

http://www.dailykos.com/user/NNadir

I'm sure you'll be providing us a list of the number of posts you've written on subjects as broad perflourinated compound concentration in WTC workers, the nickel content of jewelry in European Christmas jewelry, the Presidency of US Grant, the Banqiao disaster - about which the fundie renewables community couldn't care less - the nature of artificial karsts in China, Frederick Douglass's attitude toward Abraham Lincoln, steroid analysis in atheletes, the chemistry of long term arsenic exposure, and - of course - what lazy, illiterate dipshits the membership of entire fundie anti-nuke cult are. (I confess, these latter type of diaries comprise the bulk of my writings.)

Or maybe you'll just pretend to count, like a fundie counting exajoules.

We have lots and lots and lots and lots and lots and lots of dumb people (and paid off people) calling for banning nuclear power but there is NOT ONE anti-nuke fundie on this website who has EVER focused on banning dangerous fossil fuels, dangerous fossil fuel waste, dangerous fossil fuel wars, dangerous fosssil fuel accidents or dangerous fossil fuel wars.

I'll deal with the fundie "I DID SO mention coal mining" twirp in a separate response.

For now, I'll note that I have never engaged in "sound bite" posturing. You sound a lot like Bush, dumb, simplistic, rote and arbitrary.

I note, with contempt, that the Democratic nominee has a quite reasonable position on nuclear energy.

In fact, according to a recent poll here at the E&E forum, which I did not initiate, so do most members of this forum.

I note, with contempt, that despite the attempt by the illiterate anti-nuke Greenpeace dipshits to proclaim the ignorant "by 2050" "percent" policy as the official rhetoric of the Democratic Party that the membership of the Democratic Party, which dwarfs the membership of the Greenpeace cult is growing while the membership of Greenpeace, the consumerist yuppie brat coffee clatch for avoiding responsibility, is falling.

Thanks for the soundbite Rovie boy.

[Kolesar]

24. ^another unreferenced stream-of-consciousness troll post by NNuclear NNadir

You called him dumb and compared him to Karl Rove.