Solar Cheaper than Coal in 3-5 Years? GE and First Solar Think So

The news is carrying two stories in the last two weeks pitching solar as potentially cheaper than current electrical rates in the next 3-5 years.

First, in an interview with Bloomberg, GE’s global research director Mark M. Little said that their thin film solar PV (now at 12.8% efficiency) could be cheaper than fossil fuel and nuclear electricity in 3-5 years.

Then, yesterday, First Solar said that they believed they’d be selling solar power to CA utilities at 10-12 cents per kilowatt hour in 2014.

Both of those are well ahead of the Moore’s-Law-like exponential price decrease of solar that I’ve blogged about previously.

Could they be for real?  Possibly.  If they can keep installation costs and operating costs low enough, solar cells that are in pre-production are already at the $1 / watt manufacturing price threshold that would allow cheaper-than-fossil-fuel solar energy.

When solar is truly cheaper than fossil-fuel derived electricity, we’ll hit a new tipping point in energy.  We’ll still need some coal, natural gas, or nuclear power for night time and cloudy days, but those power usage levels are lower than the peaks on sunny afternoons in summertime.  With cheap solar PV, most of the new capacity built will make more sense as solar than anything else.

And eventually, cheap solar electricity will allow us to capture CO2 from the atmosphere and turn it into liquid fuels for storage and for transportation.  (More on that another day.)

10 thoughts on “Solar Cheaper than Coal in 3-5 Years? GE and First Solar Think So”

  1. I hope this comes true! I have an array on the house already and am loving it. Once all the true costs are included I think that costs are trending in the right direction. I think that a distributed model vs. a large distant array also helps keep transmission costs down. True there are local inverters but in an area like mine (Denver, Colorado) it works and works well. I think in looking at energy you must use what works in your neighborhood — solar, wind, water and geothermal. If everyone adds something to the mix then renewables will lessen if not replace our old need for other fuels.

  2. Don’t photovoltaics depend on a ready supply of specific and relatively scarce elements? As demand for PV increases, aren’t we generating another resource crunch?

  3. Excellent news mate, yeah the old tech for solar arrays that everyone has on top of their homes is about to be superseeded dramatically! (i actually feel sorry for the people who have spent alot of money on these old systems) with dye sensitized solar cells made from a biomaterial its all about to change great collection of the coolest renewable energy technologies in development (piezoelectric could solve plenty energy problems peace out guys have fun 😀

  4. Mez, the picture above is incomplete. I have to point this out because it’s a general trend out there, and you’re the kind of guy that can help change that.

    PV generating electricity 9-4 is only a partial solution. Smart Grids are needed as well. Ultimately, you want to see a mix of renewables including hydro, solar, etc. This addresses the electric side of building consumption. Cars may be powered by natural gas for a while, and later by electricity from a renewable grid.

    For buildings though, 75% of the energy consumption is for heating and hot water. 3/4 of the building’s energy pie is not electricity!!! It is typically already addressed with natural gas, and most of it can easily be powered by geothermal and solar thermal. It is not at all efficient to burn stuff to make electricity (30% efficient) to than power heating functions. Likewise with PV efficiencies and lack of storage, it’s not the way to go.

    Just to give a point of comparison, high-performance silicon panels captures 17% of the sun’s energy in optimal conditions, while solar thermal copper panels capture 70%, or over 4-fold the energy per square foot. Very simple, uninsulated PVC pool panels capture up to 85% of the sun’s energy. A typical $9,000, 2-panel solar hot water system is a a 5KW system which includes a 20 KWh battery (80g storage tank) and addresses peak demand and grid capacity. For now, it can be compared to a $40,000 off-grid PV system with battery. The sun’s energy comes in as heat, and should not be converted to electric movement to then address heating.

    What i hope for is a combination of the various renewable solutions mentioned above, interfacing in a smart grid, with some central and some distributed generation, and minimal natural gas back up plants. This is the only way I see to eliminate the majority of our energy pollution and install a long term solution where fuel availability is no longer a big issue.

    For both PV and solar thermal, within 10 to 15 years, we are going to see polymers offering high-efficiency chips with very low production costs, ultimately offering much cheaper energy than any fossil fuel could ever achieve. Right now, the cheaper renewable energy is probably wind, under 10 cts per KWh. But let’s not get confused about the production cost and the retail rates. 10 to 12 cts is a retail rate, and many times more than the production wholesale rate which utilities pay for energy. And natural gas is retailed at people’s doors at prices ranging from 3 cts (in Colorado, close to the new “fracking” extraction techniques and its issues) to 10 cts per KWh (national average). It’s usually sold in therms, 1 therm = 29.28 KWh.

    Finally, you’d think one of these days, the true cost of fossil fuels is going to be accounted for. Paul Epstein just published a study in the Annals of of NY Academy of Science, showing that the health cost of coal, not counting extraction, is $0.178 per KWh. This means coal’s health cost is more expensive than what the resulting electricity is retailed at! On a similar note, recent post-Japanese-disaster studies show that the cost per KWh of privately insuring a nuclear plant, may be more than the total retail price of electricity. Of course large energy providers use tricks to get around these constraints. In the USA, for isntance, large oil companies lobby the government to offer “public insurance” for things like the Gulf of Mexico disaster. This enables hiding the true insurance costs, and sticking them on the American people. EIA, the Energy Information Agency, reports that the oil & gas industry receives $557 billion in subsidies each year. These mature, dangerous and polluting industries with finite supplies of raw material (and a seemingly infinite army of lobbyists) receive 10 or more times the help that the new-born renewable energy industries are seeing. Why???

    When you look at cigarettes, the countries which created mass consumption are also those who first passed anti-smoking laws and helped their people realize tobacco kills. This has inspired a world movement, where now most countries are trying to educate their people. Likewise with energy, western countries with mature industries, who have already sucked and burned most of the fossil fuels out of their ground since their industrial revolutions, need to lead the way with clean energy. Just like with cell phones versus landlines, let’s help developing countries leap-frog the fossil fuel madness! But this is not what we are doing: China installed 60 million solar thermal panels (80 or 90% of total world capacity) while the US is patting itself on the back doing a tiny fraction of renewables which doesn’t even offset its growth in energy consumption. And let’s not think natural gas or the oxymoronic “clean coal” are clean fossil fuels. It’s just less dirty. We already went through that with filtered light cigarettes, turned out they were still addictive and cancer-causing.

    What we need is major federal legislation, in the form of a feed in tariff. These FIT mechanisms are the cause of all the fast, major large-scale implementation of renewables across the globe, from Germany to Uganda. FIT mechanisms offer a guaranteed purchase price of various renewable energies over 20 years, and are typically adjusted once a year. FITs create a stable market place where all actors can invest safely in renewables, from the homeowner to the large scale utility project. FITs are causing Ontario to experience an overwhelming growth in renewables in North America.

  5. The problem with solar power isn’t just the cells themselves, it’s the backing storage and power management electronics required. Batteries have to be replaced at 5-7 year intervals, at a huge cost relative to the installation. Alternative storage, like magnetic-bearing flywheels, have a longer useful life, but a much higher initial cost. Solar without batteries can only be connected to the grid, which has its own costs in regulating the highly variable power produced. Solving all these issues to make solar economically viable won’t happen in the 3-5 year timeframe.

  6. Laurent and Mace: Thanks very much for your thoughtful replies.

    I very much agree that solar won’t be able to replace all fossil fuel based power until we have significant advances in energy storage technology. That said, energy usage is highest during solar’s peak hours. Very soon it will thus make sense to build primarily solar to increase peak capacity, and turn existing fossil fuel based power generation that is built for peak into baseload power.

    We do need to get to renewable baseload power. That will be the topic of another post.

    And Laurent, I very much agree that solar heat has a lot of upside as well for buildings and hot water. Efficiency in general is also a huge untapped possibility.

  7. I am very late to this thread but I wanted put in my two cents. I have been interested in solar power since the 1970s. I am an electrical engineer so I’m probably even more fascinated with solar PV than the greenest of greens. I’ve been telling people for decades that solar PV is really neat stuff but it’s just too expensive to be viable. And now, finally, the time is fast approaching when solar PV will be competitive with fossil fuels. If the environmental costs of fossil fuels were factored in solar would be cheaper than fossil fuels right now.The price is definitely in the range where early adopters are putting solar on their homes. It’s just a matter of time, and I’m thinking within 5 years, when everyone and their brother will want solar PV on their roof. It’s an exciting time.

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