Solar power getting cheaper but still not really competitive

Solar power has now become competitive with fossil fuels.

That’s what Bloomberg Business quoted SunPower Chief Executive Officer Tom Werner as saying after NV Energy announced new contracts with two solar power projects at the lowest prices yet.

“Power generated from solar plants is cost-competitive with power from traditional, fossil fuel burning plants, and becoming more cost-competitive every day,” Werner said in an e-mailed statement.

Crescent Dunes Solar Project

NV Energy agreed to pay 3.87 cents a kilowatt-hour for power from First Solar’s Playa Solar 2 with a 3 percent a year escalating charge — which pencils out to about 5.2 cents over 20 years — and 4.6 cents a kilowatt-hour with no escalator for power from SunPower Corp.’s 100-megawatt Boulder Solar project, according to filings with the Public Utilities Commission of Nevada filings.

Bloomberg’s July 7 story said this past year the utility was paying 13.77 cents a kilowatt-hour for renewable energy. That would be the price for power from the Crescent Dunes project near Tonopah.

“The rapid decline is a sign that solar energy is becoming a mainstream technology with fewer perceived risks. It’s also related to the 70 percent plunge in the price of panels since 2010, and the fact that the project will be built in Nevada, the third-sunniest state,” Bloomberg noted.

Both are to be completed by December 2016, according to the Las Vegas Review-Journal today.

What Bloomberg nor the Las Vegas newspaper noted is that at the end of December 2016 the federal investment tax credit for solar power drops from 30 percent to 10 percent. Both sides at the negotiating table know that.
Nor does the cost calculation take into account that most solar projects are built on vast tracts of federal public land that is provided at cut rates.
The R-J did point out that the cheaper solar power will still cost the rate payers millions more:
In their first year of operation in 2017, the facilities would result in about $25 million in costs to ratepayers. But they would also replace $18 million worth of natural gas that the utility would have to buy if they were not built, resulting in a net cost to customers of $7 million.
Tell me again how competitive solar power is. Take at the tax credits, other subsidies and inexpensive land and it still doesn’t pencil out to the rate payer’s advantage.
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6 comments on “Solar power getting cheaper but still not really competitive

  1. Patrick says:

    Solar is more expensive because not all “costs” of generating power through burning coal are factored into equation.

    It’s akin to ignoring the costs the citizens of this country have paid for years fighting wars in the Middle East, to make sure that Exxon and Shell, are able to sell their products at the cost they do.

    Privatizing the benefit, but socializing the cost. Bad for everyone.

  2. giney newport says:

    Well I have one demand……customer owned utilities. Actually, two demands…..I also want employee owned businesses…especially with multi-national corps.. In fact, I think we should just model things like the formerly free, illegally occupied Libyan Jamahiriya!

    “The aspiration of the new socialist society is to create a society which is happy because it is free. This can only be achieved by satisfying, man’s material and spiritual needs, and that, in turn, comes about through the liberation of these needs from the control of others. Satisfaction of these needs must be attained without exploiting or enslaving others; otherwise, the aspirations of the new socialist society are contradicted.

    Thus, the citizen in this new society secures his material needs either through self-employment, or by being a partner in a collectively-owned establishment, or by rendering public service to society which, in return, provides for his material needs.

    Economic activity in the new socialist society is a productive one aimed at the satisfaction of material needs. It is not an unproductive activity, nor one which seeks profit for surplus savings beyond the satisfaction of such needs. This, according to the new socialist basis, is unacceptable. The legitimate purpose for private economic activities is only to satisfy one’s needs because the wealth of the world, as well as that of each individual society, is finite at each stage. No one has the right to undertake an economic activity whereby wealth exceeding the satisfaction of one’s needs can be amassed. Such accumulations are, in fact, the deprived right of others. One only has the right to save from his own production and not by employing others, or to save at the expense of his or her own needs and not of others. If economic activity is allowed to extend beyond the satisfaction of needs, some will acquire more than required for their needs while others will be deprived. The savings which are in excess of one’s needs are another person’s share of the wealth of society. Allowing private economic activity to amass wealth beyond the satisfaction of one’s needs and employing others to satisfy one’s needs or beyond, or to secure savings, is the very essence of exploitation.

    Work for wages, in addition to being enslavement as previously mentioned, is void of incentives because the producer is a wage-earner and not a partner. Self-employed persons are undoubtedly devoted to their work because from it they satisfy their material needs. Likewise, those who work in a collective establishment are also devoted to their work because they are partners in it and they satisfy their material needs from the production. Whoever works for a wage, on the other hand, has little incentive to work.

    Work for wages has failed to solve the problem of motivation for increasing and developing production. Whether it is a service or goods production, work for wages is continuously deteriorating because it is performed by unmotivated wage-earners.”

    -Moammar Gaddafi

  3. Rincon says:

    As I’ve said before, solar isn’t yet competitive with fossil fuels in dollars, but adding in the subsidies that fossil fuels enjoy (which Conservatives refuse to mention ever) makes it a close race. Add to that the other costs of coal in particular, and it becomes very competitive. For outlying properties with miles of wire to maintain, it’s a no brainer, but Conservatives like the idea of socializing the costs for providing power to ranchers in the middle of nowhere. You call that conservative?

  4. […] NV Energy guy bragged about the company paying less than 5 cents a kilowatt-hour for the solar power it would be selling […]

  5. […] to pay a return on equity that would be necessary if NV Energy were the builder. According to filings with the PUC, NV Energy agreed to pay 3.87 cents a kWh for power from First Solar’s plant plus a 3 percent a […]

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