What Happens When Solar Power Is as Cheap as Coal?

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    Apr 20, 2011 5:59 AM GMT
    http://www.fastcompany.com/1745113/what-happens-when-solar-power-is-as-cheap-as-coal

    Grid parity is the technical term for when an alternative energy's cost equals that of the traditional electricity supply--which, in the U.S., is mostly coal. It simply means that solar panels are becoming so cheap to produce and so efficient that they can now battle with the giant coal-fired power-generating structure we've developed. Currently, coal costs about 7 cents a watt, versus 22 cents for solar. But the solar industry is moving so fast that those costs will be equal--at least for utilities--by 2013. In sunny places like California, it's already much closer during peak hours, when the sun is shining and coal power becomes more expensive. Should you prefer your information more technical and in graphic form, see this explanatory chart by Stephen O’Rourke of Deutsche Bank:

    gird-parity-chart.jpg

    In other words, once grid parity is reached, it becomes economically stupid for power companies to not be installing large fields of solar panels to generate the cheapest form of available energy. And while power companies are generally portrayed as evil conglomerates headed by Mr. Burns-esque figures (and for all we know, they probably are), evil conglomerates with shareholders can't really afford to make economically stupid decisions, as much as their leaders secretly want to destroy the environment. They've caught on to that, which is why solar panel installations are expected to double in the next two years. It's not people putting them on their houses driving most of that change, it's large scale installations. You're not going to notice the change, and that's good: No one will have to do anything to get clean solar power. It's just going to come from the same place as your old dirty power.

    Bonus stock tip: if these predictions turn out to be right, and the moment of solar grid parity is upon us, it might be a good time to be in the solar panel business. The cheapest product available is usually in pretty high demand.
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    Apr 20, 2011 4:04 PM GMT
    interesting post, can one assume that you are studying within the field?
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    Apr 20, 2011 4:09 PM GMT
    Find the split infinitive in that post.. First sentence after the graph.

    It's very interesting though. I'm currently writing a dissertation on the Energy industry, mostly based on Nuclear and Coal, but it's all very relevant and related though! Cool post. Nice to see something other than "Would you _____ the guy above!"
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    Apr 20, 2011 4:11 PM GMT
    I agree, some decent conversation for once!
    I have just submitted a paper on sustainability and enjoy this subject. :-)
  • LJay

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    Apr 20, 2011 4:57 PM GMT
    That would be incredibly good news.

    To see homes designed with solar and solar electricity being fed into the grid on a large and economically competitive scale would be an enormous environmental, social and political advance. As for the "stock tip," just wait. People will be tripping over themselves running to the brokers.
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    Apr 20, 2011 5:02 PM GMT
    Interesting! Some countries in Europe- Germany, Portugal and Spain have utilized large scale solar power plants. In theory, the countries that would benefit the most are the ones nearest to the equator such as in Africa, Central America and South East Asia where there's maximum sunlight to generate energy through out the year. but since these countries are mostly developing ones, the instillation and maintenance costs are rather high and still unaffordable.It takes more years for solar power to be as cheap as coal in these areas.
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    Apr 20, 2011 5:11 PM GMT
    This is very fascinating and kind of exciting. I am all for greener energy and there are some great solar applications out there.

    However, I am still waiting on changes to the electrical infrastructure. Although most nations have incredible power plants and power lines crisscrossing their countrysides, when will there be a development in more efficient transmission technology?

    A large portion of the electricity generated is lost through transmission lines. Loss will occur due to resistance, but I remember hearing a study that stated approximately 30-40% of the electricity generated is lost during transmission in the U.S. (I cannot remember the exact numbers.) That has me worried. Even with newer and more powerful generation, it is pointless without an efficient infrastructure.
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    Apr 20, 2011 5:32 PM GMT
    And then the sun went down... it'll get cheaper and you'll have to have redundant and decentralized generation such as Hydro (yes has its issues), wind, tidal, geothermal etc
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    Apr 20, 2011 5:56 PM GMT
    There is so much religion and fiction mixed in with all energy figures these days, I have a hard time believing any of it. Some people count hydroelectric power as "coal" to make the charts come out the way they want. People who don't like biomass count solar radiation as "coal" to make the charts come out the way they want. I'm not aware of any credible sources any more.

    In this particular case, the neat data points stretching out to 2020 are inexplicable. Obviously no such measurements have been made.

    But in any case, it certainly is a good time to be an investor in SPV, with 100% subsidies to build plants. And in Oregon, the state buys SPV power at $0.65 per KwH. See where that fits on the graph. (BTW: They're still putting up subsidized windmills as fast as they can ship them. Yet the existing wind farms have been shut down for the season, because there's no capacity in the grid to absorb the power.)
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    Apr 20, 2011 9:56 PM GMT
    It's all well and good when you live in a sunny place like california. Some of us live in the midwest and durning the winters it's not uncommon to go 2 or more weeks without seeing the sun. Solar pannels don't do much on cloudy days.icon_confused.gif
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    Apr 20, 2011 10:06 PM GMT
    I'm constantly exposed to current research in sustainability, and the latest I heard was that the new solar panels work best in less sunny places under diffused light. The panels don't need to follow direct exposure to sunlight. Hence the solar farms closer to the equator won't be the way solar will be implemented, but rather a distributed system whereby individuals feed into the grid. Hmm, sounds too collectivist to work in North America, lol. It's already done in Germany.
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    Apr 20, 2011 10:46 PM GMT
    riddler78 saidWhat Happens When Solar Power Is as Cheap as Coal?
    The US will go to war with alien beings on the sun to take it over and have it all to ourselves, then sell the light to other countries. icon_twisted.gif
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    Apr 20, 2011 10:50 PM GMT
    [quote][cite]paulflexes said[/cite]
    riddler78 saidWhat Happens When Solar Power Is as Cheap as Coal?


    PILLOW FIGHT!
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    Apr 20, 2011 11:46 PM GMT
    Cobalt87 saidThis is very fascinating and kind of exciting. I am all for greener energy and there are some great solar applications out there.

    However, I am still waiting on changes to the electrical infrastructure. Although most nations have incredible power plants and power lines crisscrossing their countrysides, when will there be a development in more efficient transmission technology?

    A large portion of the electricity generated is lost through transmission lines. Loss will occur due to resistance, but I remember hearing a study that stated approximately 30-40% of the electricity generated is lost during transmission in the U.S. (I cannot remember the exact numbers.) That has me worried. Even with newer and more powerful generation, it is pointless without an efficient infrastructure.


    That's very much a US problem, the mentioned solar plants in Germany and other European don't have the same issue.

    In short, the problem with the US grid is that its ownership is highly fragmented, and nobody wants to be the first to dig in their pockets and invest, which leads to the US grid being generally very low-tech and outdated.

    If you care for a little more detail, this is a very good article from Wired: http://www.wired.com/science/discoveries/magazine/17-04/gp_intro
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    Apr 20, 2011 11:49 PM GMT
    We should build a Dyson swarm/bubble/shell.