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Will Solar Be The Kiss Of Death For Coal?

For the past few years, it has been assumed that natural gas is the enemy of coal, at least in the United States, where low natural gas prices have eroded market share from thermal coal producers.

Now, a new adversary is emerging for coal. It comes from silicon wafers, the material used to make solar panels.
According to a post in Saturday's Quartz, a digital news outlet, a small research facility in Bedford, Massachusetts is helping to perfect a new technique for making silicon wafers, and if successful, it could reduce the cost of solar by 20 percent in the next few years.

Related: Oil Price War May Benefit Both US Shale And Saudi Arabia

“This humble wafer will allow solar to be as cheap as coal and will drastically change the way we consume energy,” Quartz quoted Frank van Mierlo, CEO of 1366 Technologies, the company behind the new method of wafer fabrication.

Quartz continues:

The dramatic reduction in cost came from a wide number of incremental gains, says Mark Barineau, a solar analyst with Lux Research. Factors include a new, low-cost process for making polycrystalline silicon; thinner silicon wafers; thinner wires on the front of the module that block less sunlight and use less silver; less-expensive plastics instead of glass; and greater automation in manufacturing.

The site notes that in Saudi Arabia, a 200-megawatt solar plant will produce electricity for 6 cents per kilowatt-hour, compared to electricity from natural gas and coal plants which cost an estimated 6.4 cents and 9.6 cents per kilowatt-hour, respectively, according to the US Energy Information Agency.

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So is solar power set to replace coal? Not so fast, says Christopher Helman, a Forbes columnist who researched the topic last year.

According to Helman, even though solar has grown rapidly in the U.S. over the past decade, it is still a relatively small part of the country's overall energy mix. He writes: ‘’In fact, solar merely equals the amount of electricity that the nation generates by burning natural gas captured from landfills. And it’s only slightly more meaningful than the 7.3 million Mwh we get from burning human waste strained out of municipal sewer systems’. Indeed, when you factor in all the sources of energy consumed in this country, captured solar power amounts to well less than 1 quadrillion Btu out of an annual total of 96.5 quadrillion.

Still, if the cost of solar energy continues to drop, coal will certainly struggle to remain relevant and competitive, especially in developing countries like the U.S. where politicians are imposing increasingly stringent regulations on coal-fired power plants that are sure to squeeze margins even further.

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Even in less developed countries and economic powerhouses like India and China, which have driven the demand for coal, there is a movement afoot to limit use of the fossil fuel. As the Guardian reported recently, "China’s coal imports fell by nearly half in the first three months of the year as the slowing economy and tougher rules on pollution took their toll," with imports from the world's biggest coal consumer falling 42 percent from the same period a year ago.

China has said it will ban coal use in smog-cloaked Beijing by 2020. Last month, the city closed a 400-megawatt coal-fired power plant in the downtown area, replacing it with a gas-fired plant to cut pollution, China Daily said. Another 93-year-old coal power plant was shuttered the day earlier.

By Andrew Topf

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  • Carl Rimmer on April 27 2015 said:
    To install solar at my home to pay 80% of my electricity would cost about 75,000. My electric bill from a coal plant runs on average about 125 a month. So it would take about 50 years just to break even. To bad solar panels life expectancy is about 20 to 25 years. So solar is no where near the cost of coal, doubt it ever will be.
  • David Hrivnak on April 26 2015 said:
    For me solar is already 25% less than the coal power I can get from my utility. I calculate my solar should average cost to be $.065/KWh over its life where my utility charges $.085. My power bill over the last 12 months was $117. Mostly the $7.21 monthly connection fee. And that INCLUDES driving about 8000 miles in my electric car.

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