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Solar Struggles To Compete With Other Renewables On Cost

The world now gets about one-fifth of its electricity from sustainable sources, but one, solar power, remains a relatively expensive option, according to a new study.

The review balanced the monetary costs of pollution, resource depletion and climate change against the price of a given mode of generating electricity at plants powered by all currently available sources of energy, from coal to wind. It also measured the cost of environmental damage, if any, that is caused by the plants.

The study was commissioned by the European Union and conducted by Ecofys, a renewable energy consultancy based in Utrecht, Netherlands.

Related: Is The UK The Most Energy Secure Country In The EU?

To evaluate these costs, Ecofys applied a benchmark that the study’s authors call the “levelized cost.” This is the monetary value per megawatt-hour of building and operating a power plant in a given location for the estimated life of the facility. The “levelized cost” doesn’t include the value of any subsidies offered to encourage the building of the plant.

As part of their cost calculations, the Ecofys team based its work on academic data and established models to determine values for land use, resource depletion and toxic emissions. They also settled on a cost of around $55 per metric ton of carbon dioxide emissions.

Ann Gardiner, a consultant at Ecofys who co-authored the report, acknowledges that the Ecofys study isn’t the first to calculate the global cost of the environmental effects of generating electricity, but it is the first to include the depletion of energy resources as an extra cost.

Perhaps a surprising finding based on that additional criterion was how poorly solar power fared in value. Ecofys found that solar energy is far more expensive than wind power, and costs about the same as nuclear power.

Gardiner says that’s because many solar panels are built in China, where electricity for their manufacturing plants is generated by fossil fuels, primarily coal. Further, she says, building solar panels requires a lot of metal, which also raises solar’s cost.

Related: Big Oil And Renewables: Not So Strange Bedfellows

Nevertheless, Gardiner says the Ecofys study was based on data from 2012, the most recent year for which all the necessary data for the analysis was available. She says solar technology is constantly improving, and getting less expensive, and that data for 2014 may show solar power more competitive with wind.

The Ecofys study concludes that new coal and natural gas plants in the EU, running at maximum capacity, have levelized costs of just over $64 (in 2012 dollars) per megawatt-hour. Onshore wind costs about $102 per megawatt-hour.

On the higher end, the Ecofys says, nuclear power costs about $115 per megawatt-hour and solar photovoltaic systems cost about $127. At the low end, the cost of hydroelectric power costs about $12.

By Andy Tully of Oil price.com

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  • John Murray on November 02 2014 said:
    No!no!no!. Do not put photovoltaics on top of wallmarts and then use the elctricity to light the building. 10% conversion of sunlight to electricity and 10% conversion of electricity to light means we only get 1% of the solar energy back. Put sky lights in. Look at all the single story buildings with galvanised roofs and 50 kilowats of electric lighting where sunlights could do the job. As the greens will say energy conservation is not low hanging fruit but fruit that is already on the ground.
  • Chris on October 28 2014 said:
    Why are solar panel manufactures not melting glass and making solar cells from the electricity with the panels they have already made? It does not make sense to continue to pay for a more costly energy source when you are making a free self sustaining source and not using it. Roof tops are a waste of space and need to be filled with solar arrays. These panels could prolong the life of roof tops by shielding them from breaking down caused by dramatic changes in temperature and power our world without pumping toxic gasses into the atmosphere we rely on for survival. Warehouses like walmart should have the roofs covered with sun tracking solar arrays pumping gigawatts into the grid during summertime and mini mind mills during the colder months just for fun. :)

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