To Become Truly Mainstream, Solar Will Need to Cost 25 Cents per Watt by 2050

[Engineer]

To Become Truly Mainstream, Solar Will Need to Cost 25 Cents per Watt by 2050

Cost-competitiveness for solar is a moving target. As solar’s share of the electricity mix increases, the cost of each new solar project must fall to compete. This ‘value deflation’ effect of solar at higher penetrations is a well-known theoretical concept but is rarely discussed as a matter of practice in the solar industry. […]

I've long believed that solar will supply 1000% of our energy supply in a decade or two, which is why I've waited to get it. So why did I finally jump and buy a system? Because I don't believe that my POCO is capable of passing any savings on to me.

Otherwise I don't believe the premise of this article. It's being widely reported that solar plants are coming in at lower kWh pricing than fossil fuels. I don't see where value deflation comes into play, the smart money will go into solar generation, at least on the large scale.

[SunEagle]

I certainly hope we can harvest more power from solar, but I would not want to put all my eggs in one basket regardless of how cheap it will be.

There have been way too many times when the sunlight has been blocked by particulate kicked out by volcanoes. (too numerous to list) There is always a chance of a large eruption blocking out the sun for a major portion of the US East and South of the Cascade mountains. That would certainly reduce the output of any large solar arrays for months if not years.

I hope it never happens in my life time but due to the unknown geological events that may not be correct and I would not like to take a bet it wouldn't happen in the next decade.

[Engineer]

I don't think you'll have to worry, even with my 1000% penetration other fill-in sources will necessarily exist. Anyhow I was driving at the 25 cent part, is that really true? I'm doubting that number, and instead think it will come down to pure cost of kWh.

[SunEagle]

I don't think you'll have to worry, even with my 1000% penetration other fill-in sources will necessarily exist. Anyhow I was driving at the 25 cent part, is that really true? I'm doubting that number, and instead think it will come down to pure cost of kWh.

I also doubt that 25cents / watt is correct. It really should be a cost per kWh comparison to see what is the cheapest form of power generation. But that kWh also includes different costs based on where the generation is in the US as well as the physical condition of the grid.

Older infrastructure might fail without a lot of money being spent to upgrade it. That will raise the price of energy which will be associated with the kWh rate. It would be hard to say what a specific cost would be to open the door for more solar.

[sensij]

I've long believed that solar will supply 1000% of our energy supply in a decade or two, which is why I've waited to get it. So why did I finally jump and buy a system? Because I don't believe that my POCO is capable of passing any savings on to me.

Otherwise I don't believe the premise of this article. It's being widely reported that solar plants are coming in at lower kWh pricing than fossil fuels. I don't see where value deflation comes into play, the smart money will go into solar generation, at least on the large scale.

What savings do you expect the power company to pass along to you? The costs and benefits of distributed generation are complicated, and studies by the CPUC during the NEM 2.0 proceeding showed in every scenario considered that net metered PV shifts costs to non-PV customers, unless indirect benefits (climate change, etc) are considered. With this result, they are taking another pass at the cost/benefit model to see if there are factors that were missed, the outcome of which will inform the next round of NEM revision in 2019.

The lower kWh pricing reported for utility PV is based on projections of output over the life of the system, probably using an LCOE methodology that fails to account for resource availability. PV may be less expensive when it is working, but as penetration increases, it becomes more expensive to support because it is not reliable. The article mentions that energy storage can mitigate it, but points out that the scale of storage required to make a dent in the value deflation as penetration increases is massive, and at current projections, only capable of offsetting some of the deflation.

I have no idea if 0.25 / W is a meaningful number, but the general idea that PV is less valuable as it becomes a greater share of the grid power supply sounds reasonable to me.

[jflorey2]

To Become Truly Mainstream, Solar Will Need to Cost 25 Cents per Watt by 2050

Funny. About eight years ago I read an article saying that for solar to become truly mainstream, it will need to be $1 a watt or less.

[Engineer]

What savings do you expect the power company to pass along to you?

Admittedly it was an unsophisticated viewpoint that if solar is cheap then power should be cheap. I didn't spend much time on it.

The costs and benefits of distributed generation are complicated, and studies by the CPUC during the NEM 2.0 proceeding showed in every scenario considered that net metered PV shifts costs to non-PV customers, unless indirect benefits (climate change, etc) are considered. With this result, they are taking another pass at the cost/benefit model to see if there are factors that were missed, the outcome of which will inform the next round of NEM revision in 2019.

Yes I was reading about that too. My impression was that the differences were minor, a few fees that NEM 1.0 (PG&E) customers weren't paying. If they do their accounting right than the distribution fees should cover that part, shouldn't they?

PV may be less expensive when it is working, but as penetration increases, it becomes more expensive to support because it is not reliable.

Yes there is a Pareto that people have done no doubt, certainly the cost of PV is something more than just the raw value at peak production. But also we have good modeling and on grid scale PV surely this is manageable. And in fact it is because we're already doing it. During the summer California produces 30%-50% of it's middle of the day energy from renewables, and seems to be handling that just fine.

[Sunking]

Funny. About eight years ago I read an article saying that for solar to become truly mainstream, it will need to be $1 a watt or less.

Yep 30 years ago Global Cooling was going to destroy the earth and put us in another Ice Age by 2000.

20 years ago we were at Peak Oil and by 2020 there would be no more oil. Now we know we have hundreds of years left and still counting.

It does not matter what Activist and Alarmist say or do. They never get it right. The Market decides everything and always gets it right every time. Been that way every since apes walked upright.

[Engineer]

Yep 30 years ago Global Cooling was going to destroy the earth and put us in another Ice Age by 2000 ...

I'm probably pissing into the wind here but you're suffering from confirmation bias. What happened to Swine flu? Avian flu? Y2K? Those weren't failures of prediction but the opposite. Doomsayers raised a stink so people fixed it, before they became problems.

[sensij]

Yes I was reading about that too. My impression was that the differences were minor, a few fees that NEM 1.0 (PG&E) customers weren't paying. If they do their accounting right than the distribution fees should cover that part, shouldn't they?

The NEM 2.0 decision turned into something more like a NEM 1.1 decision. They made only a few small changes to take effect when the NEM allocation is consumed (or July 1, 2017, whichever is sooner). However, they also said that the decision should be revisited in 2019, armed with much more information from ongoing studies about the value of distributed generation. My guess is that more substantial changes to the NEM structure will be coming then.

Yes there is a Pareto that people have done no doubt, certainly the cost of PV is something more than just the raw value at peak production. But also we have good modeling and on grid scale PV surely this is manageable. And in fact it is because we're already doing it. During the summer California produces 30%-50% of it's middle of the day energy from renewables, and seems to be handling that just fine.

PV's share of RE has been small. As it grows relative to more dependable sources, the idea that PV will be less valuable still seems reasonable to me.

Edit: Some of the data I was reviewing are old. Just found this... kind of neat

http://www.caiso.com/market/Pages/ReportsBulletins/DailyRenewablesWatch.aspx

[jflorey2]

It does not matter what Activist and Alarmist say or do. They never get it right. The Market decides everything and always gets it right every time.

Except for Freon. And Enron. And Tulip Mania. And the housing bubble. And slave labor.

[DanS26]

In the long run the market (and nature for that matter) gets it right....not so for the short run where the market is wrong pretty much 50% of the time. All depends on your definition of "long run" and "short run".

[Sunking]

xcept for Freon. And Enron. And Tulip Mania. And the housing bubble. And slave labor.

Yep and the Market got it right and corrected itself. Does it every time.

[jflorey2]

Yep and the Market got it right and corrected itself. Does it every time.

Well, no.

The government shut down Enron and prosecuted their executives for fraud. If not for those pesky laws, Enron would likely still be screwing over their customers.

The UN created the Kyoto Protocol and shut down CFC production. If not for them, you'd be getting skin cancer instead of a suntan. (But companies would be making profits on it.)

There was a pretty big war fought over slavery here in the US. The market liked slavery just fine - it was that meddling Yankee government that put an end to it.

Standard Oil was systematically taking over oil refineries, fields, transport and distribution, thus guaranteeing that other companies could not compete in the field of oil production. It took the government, specifically the Sherman Act, to return the market to free competition.

The free market is far from perfect, and needs to be regulated to have any hope of working correctly, as we have seen time and time again. It is merely the least screwed up of all the systems we have tried.

[Sunking]

Well, no.

The government shut down Enron and prosecuted their executives for fraud. If not for those pesky laws, Enron would likely still be screwing over their customers.

That is not what killed the company. The Market killed the company, their stock went to ZERO and delisted. Stock holders did that, not the government. If the government could kill them then BP, Toyota, and VW would b eout of biz. Did not happen, the market fixed the problem. They got punished by share holders.

The UN created the Kyoto Protocol and shut down CFC production. If not for them, you'd be getting skin cancer instead of a suntan. (But companies would be making profits on it.)

It is still made and used. The most Eco Friendly country in the world dropped out of the Kyotoa scam, Canada. They spent Billions and years and only made more CO2. There is no way to stop it, Canada realized it and pulled out.

Standard Oil was systematically taking over oil refineries, fields, transport and distribution, thus guaranteeing that other companies could not compete in the field of oil production. It took the government, specifically the Sherman Act, to return the market to free competition.

Guess what? Standard still exist today and reconsolidated.

The free market is far from perfect, and needs to be regulated to have any hope of working correctly, as we have seen time and time again. It is merely the least screwed up of all the systems we have tried.

I agree and it keeps correcting itself. The consumer decides period. Do you buy gas from from Dino Fuel for $2/Gal or go across the Street to Mr Green Jeans for $10/gal fuel. I know who's fuel and stock I am buying. Do you? I know Dan buys the $10/gal fuel and stock, but he is a fool. Are you?