Monday, October 24, 2011

Solar Hits 10 Cents Per Kilowatt-hour

If you want to see why solar by 2015 will be as big as shale, take a look at solar pricing in Arizona. Arizona has a virtually unmatched solar resource and is reaping low solar power prices already.  New utility scale solar facilities are generating solar at 10 cents per kilowatt-hour.  That price includes no tax credits or any subsidies.

Electricity rates of 12 to 18 cents per kilowatt-hour are common from California to Maine so solar at 10 cents will be attractive just on economics alone for many consumers. Hawaii which still depends on expensive and dirty oil for a lot of electricity has had rates from 20 to 30 cents per kilowatt-hour.

The 2011 Arizona solar price has fallen sharply from 14 to 16 cents per kilowatt-hour in 2010.  The lower prices are leading to a solar boom in Arizona that will install 240 megawatts of solar this year, according to Suntech, a major solar company.

But the key is not today's 10 cents solar price but the continuing price declines. Those continuing price declines will make solar as big an energy event as shale gas is today.


  1. Tired of ideological junk? This is your place.

    This whole blog is green ideological junk.

  2. I know that the fact of 10 cents per kilowatt-hour is deeply disruptive, creatively destructive, and just plain scary to some business models and the conservative war on clean energy or green jobs. It is not going away and it is going to get worse...meaning even lower solar prices.

  3. How does BTU and kilowatts work?

  4. John: 10c is a good start, but a couple of caveats: 1) the article says this is "at the best-suited sites in Arizona". 2) Because 10c is a generation cost, not even wholesale let alone retail, adding in transmission, profit, distribution costs and line losses along the way likely renders this power less than cost-effective even in 12c-18c. Solar's cost-effective future (probably should have said 6c-8c solar "would" instead of "will") might depend on new materials for generation.

  5. Solar is so disruptive and will be as big as shale because it can produce large amounts of power at the site of the business or home. Some 2010 examples from PA are 3 megawatts system on the roof of a glaxo smith klein warehouse in York or two other ground mounted systems at Crayola or at a potato chip maker in York or an apple producer in Adams county or at the pocono raceway and so on. Most of these systems had pricing in the range of 12 cents to 18 cents per kilowatt-hour or $5 to $6 per watt. That was in 2010 in PA and all these systems avoided transmission and distribution and line loss costs. Plus the price was locked in for 25 years. At $4 per watt pricing which is now available for these systems and assuming 1200 kilowatt-hour production per year for each kilowatt and 25 year system life, the price per kilowatt- hour is about 11 to 12 cents per kilowatt-hour. Of corse in Arizona, Califronia, Florida the same kilowatt produces 1600 or 1800 kilowatt-hours. The question for 6 cent or 8 cent solar power at the site of a business or home is when? A few people in the electric business are realizing that 4 years is likely time. Solar is where shale gas was in about 2005 or 2006.

  6. Btu is a measure of energy. Oil has about 6 times the btus as gas for equal amounts. Kw is a measure of electric demand or capacity. Kwh is a measure of electricity production or consumption.