• 3 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 6 minutes This Battery Uses Up CO2 to Create Energy
  • 10 minutes Phase One trade deal, for China it is all about technology war
  • 12 minutes Trump has changed into a World Leader
  • 3 hours Shale Oil Fiasco
  • 2 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 4 mins Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 4 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 2 hours Might be Time for NG Producers to Find New Career
  • 1 day China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 22 hours Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 1 day Wind Turbine Blades Not Recyclable
  • 1 day Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 3 hours US Shale: Technology
  • 5 hours Indonesia Stands Up to China. Will Japan Help?
  • 1 day Denmark gets 47% of its electricity from wind in 2019
Alt Text

Is This The Next Big Thing In Solar?

Scientists have found a new…

Alt Text

24/7 Power: The Future Of Solar

Researchers from Curtin University in…

Colin Chilcoat

Colin Chilcoat

Colin Chilcoat is a specialist in Eurasian energy affairs and political institutions currently living and working in Chicago. A complete collection of his work can…

More Info

Premium Content

Solar Really Can Be Cheaper Than Coal

The ongoing volatility in the oil markets has led many major companies to dramatically slash their capex budgets and workforces in a bid to survive. The knock on effect of this can be seen in a burgeoning solar industry that is seizing the opportunity to finally make a significant breakthrough into the market, regardless of subsidies.

Research and consultancy group Woods Mackenzie believes we may have a shale-like boom on our hands. According to their new report “Is solar the next shale?” distributed and utility scale solar is nearly ready to transform power markets. And for this, we can thank China.

The world’ s most populous nation is not wavering in its concerted effort to bring solar to the masses and reduce the country’s marked pollution. China has vowed an installed capacity of 70 gigawatts (GW) by 2017 – or double Germany’s current world-leading capacity. Last year the country installed 10.6 GW, bringing their total grid-connected capacity to just above 28 GW.

The core of China’s growth consists of the belief that solar can indeed be cheaper than coal, and of course an exploding photovoltaic (PV) manufacturing industry, which has rapidly depressed global prices. Since 2007, Chinese PV module production has increased nearly 20-fold to 25 GW and is projected to reach 51 GW by the end of 2017. This is beyond good news for the rest of the world because solar PV costs follow a largely predictable trajectory – subject to a phenomenon many refer to as Swanson’s law. The law stipulates that for every doubling of global manufacturing capacity, the dollar per watt cost of PV cells falls by 20 percent. It has held true for nearly 40 years and data from the US Department of Energy’s National Renewable Energy Laboratory suggests we can expect the same moving toward 2030. Related: Anti-Fossil Fuel Movement Grows

Ahead of the game, China’s solar industry believes the levelized cost of solar PV will equal that of coal-fired generation by the end of 2017, at the latest. The US, for its part, is nearly there in several states, and not much farther behind in others. In California for example, utility scale solar is already competing with natural gas – and is prepared to blow it away (see below). 

NetCostNewGeneratorsCalifornia

Source: Woods Mackenzie

The above chart from Woods Mackenzie’s recent report reveals the rapidly growing profitability of investing in solar generation compared to both combined cycle and combustion turbine natural gas plants. It’s part of a national trend that is picking up pace as solar costs continue to fall while combined cycle costs rise. 

LargeScaleSolarEconomics

Source: Woods Mackenzie

By 2020, the consultancy expects 19 states to be at grid parity, doubling to 38 by 2030 – even without the Obama administration’s successful solar tax breaks. The projections assume installed distributed and utility scale solar capacity of 71 GW by 2035, or more than three times the current level. Related: The World's 10 Biggest Solar Farms

Such rapid expansion is certainly possible, but the electric and market systems will require a revamp as current structures are not designed for such a large influx of solar energy. As solar undercuts natural gas plants and other forms of electricity generation, it amasses revenues otherwise not its own. A boon to solar, a blow to gas, and the cycle continues. However, electric systems still require backup capacity during low-solar hours and under current compensation mechanisms fossil fuels cannot afford to be relegated to a secondary role.

For the time being, solar’s dominance over fossil fuels is only constrained by its increasingly rapid growth. Growth, however, is all but guaranteed as improvements to efficiency and cost advance like clockwork. Clean energy saw a 16 percent rise in investment in 2014 and has weathered oil’s fall relatively unharmed. It’s time the markets evolve.

By Colin Chilcoat of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage




Leave a comment
  • Vanderpool on February 20 2015 said:
    Excellent news! Now, if we could run the economy on about six hours a day of electrical power, we would be able to get rid of coal and nuclear. . . . . . . .
  • Frank on February 21 2015 said:
    There are a whole lot of battery companies trying to figure out how to soak up that cheap solar juice and sell it for a profit when the sun goes down. I say, let them try, or ship some of that California sun to Ohio. Our sun goes down three hours sooner.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play