Moody Center
Use of Solar Should Lead to Reduction in Rates
RECEIVED Thu., March 19, 2009
Dear Editor,
The Webberville solar power project appears to be contracting power at 18 cents per kilowatt hour, based on the following math: $10 million per year divided by 360 days = $27,778 per day. Thirty megawatts of capacity is multiplied by five hours per day, yielding 150 megawatt-hours, or 150,000 kilowatt hours. $27,778/150,000 = 18.5 cents per kWh. The five hours per day is the total solar exposure to a fixed angle flat plate, according to the National Renewable Energy Laboratory (Solar Atlas).
Complaints about this being “expensive” are based on the idea that generating power from natural gas costs about 3.5 cents per kilowatt hour, including cost of capital (the power plant) and fuel. Building a gas-fired plant, however, takes a long time, and the whole thing has to be built before any of it produces power. Solar can be built out incrementally.
Nanosolar.com and FirstSolar.com both indicate that they are producing solar panels at less than $1 per watt. This is equivalent to $1,000 per kilowatt. Three hundred sixty days times five hours is 1,800 hours, so dividing $1,000 by $180 (i.e. 1,800 hours times 10 cents per kilowatt hour) produces a payback in less than seven years. From this perspective, the 18.5 cents looks a bit pricey for solar.
The consensus in Germany, which has been doing this for some time, is to legislate a fixed reduction in rates each year. Austin should only agree to this if the 2010 rate is 18.5, 2011 is 17, 2012 is 15.5, etc., until the price is equivalent to natural gas or coal-fired power. There is no way that solar power resources produced 25 years from now are going to cost anything like 18.5 cents per kWh on an inflation adjusted basis.
The Webberville solar power project appears to be contracting power at 18 cents per kilowatt hour, based on the following math: $10 million per year divided by 360 days = $27,778 per day. Thirty megawatts of capacity is multiplied by five hours per day, yielding 150 megawatt-hours, or 150,000 kilowatt hours. $27,778/150,000 = 18.5 cents per kWh. The five hours per day is the total solar exposure to a fixed angle flat plate, according to the National Renewable Energy Laboratory (Solar Atlas).
Complaints about this being “expensive” are based on the idea that generating power from natural gas costs about 3.5 cents per kilowatt hour, including cost of capital (the power plant) and fuel. Building a gas-fired plant, however, takes a long time, and the whole thing has to be built before any of it produces power. Solar can be built out incrementally.
Nanosolar.com and FirstSolar.com both indicate that they are producing solar panels at less than $1 per watt. This is equivalent to $1,000 per kilowatt. Three hundred sixty days times five hours is 1,800 hours, so dividing $1,000 by $180 (i.e. 1,800 hours times 10 cents per kilowatt hour) produces a payback in less than seven years. From this perspective, the 18.5 cents looks a bit pricey for solar.
The consensus in Germany, which has been doing this for some time, is to legislate a fixed reduction in rates each year. Austin should only agree to this if the 2010 rate is 18.5, 2011 is 17, 2012 is 15.5, etc., until the price is equivalent to natural gas or coal-fired power. There is no way that solar power resources produced 25 years from now are going to cost anything like 18.5 cents per kWh on an inflation adjusted basis.
Meredith Poor