Bloomberg headline today:
Solar Could Beat Coal to Become the Cheapest Power on Earth
Solar power is now cheaper than coal in some parts of the world. In less than a decade, it’s likely to be the lowest-cost option almost everywhere.
In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate electricity from sunshine for less than 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are planning auctions and tenders for this year, aiming to drop prices even further. Taking advantage: Companies such as Italy’s Enel SpA and Dublin’s Mainstream Renewable Power, who gained experienced in Europe and now seek new markets abroad as subsidies dry up at home.
Since 2009, solar prices are down 62 percent, with every part of the supply chain trimming costs.
Some ten years ago, when remodeling my Princeton, NJ, house, we looked into solar energy.
The panels were very expensive.
They will not work when covered by snow.
They needed to be kept clean, which would be yet one more house maintenance chore, considering that the driveway was regularly coated by pollen for most of Spring.
A couple of trees would have to come down, adding to the cost.
And in that part of New Jersey, there is a significant number of cloudy/rainy days.
In brief, solar energy was not cost effective. The neighbor down the street had a solar house, but that was because he owned a solar business.
The countries mentioned in the above article – Chile, Jordan, Mexico, Saudi Arabia – have vast expanses of arid land where solar panels could be more cost effective now that solar prices are down due to “every part of the supply chain trimming costs.”
But there is an added component: investor confidence. The government of Puerto Rico experimented with solar energy, but, as Jeffrey Karp said, “the reason for the lack of solar development is likely due to poor investor confidence in the local utility as offtaker.” With corruption scandals involving government-owned utilities in Mexico, and in other countries like Brazil and Venezuela, investor confidence may become solar’s highest hurdle.
Fausta Rodríguez Wertz writes on US and Latin America at Fausta’s blog.