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A recent Popular Mechanics article claimed

In a new report, the International Energy Agency (IEA) says solar is now the cheapest form of electricity for utility companies to build. That’s thanks to risk-reducing financial policies around the world, the agency says, and it applies to locations with both the most favorable policies and the easiest access to financing.

I would love for this to be true, but before I use it as an argument, I’d like to see how reliable this source is.

There is an obvious caveat that this is partly due to government incentives which the article clearly mentions.

Is solar the cheapest energy for utility companies to build?

Oddthinking
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Sebastiaan van den Broek
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    I am all for green energy but it actually says "solar is now the cheapest form of electricity **for utility companies to build**" which is not the same thing. At one time it was claimed that nuclear energy would be "too cheap to meter" but the reality proved to be very different. At high lattitudes with frequent poor weather solar power might not be suitable at all. – Weather Vane Oct 23 '20 at 15:01
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    I am nervous that this question is meaningless without a very large number of caveats, making the claim largely misleading out of context. – Oddthinking Oct 23 '20 at 17:21
  • The caveats here would be "where", "with what being taken into consideration", and "what type". There's a difference between building PV without storage on the equator and trying to build a CSP thermal plant in Yellowknife. – jdunlop Oct 23 '20 at 17:36
  • It depends who is judging "cheap".. – blacksmith37 Oct 23 '20 at 19:07
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    It's also a matter of existing infrastructure. It might be "cheaper" to build a new solar farm vs building a new coal power plant, but my hunch is that it is almost certainly "cheaper" to maintain an existing coal power plant rather than build anything new. – PC Luddite Oct 23 '20 at 21:49
  • @PCLuddite - that's not true, at least in some markets: https://www.cbsnews.com/news/its-now-cheaper-to-build-a-new-wind-farm-than-to-keep-a-coal-plant-running/ – jdunlop Oct 23 '20 at 22:27
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    @jdunlop [Australia–ASEAN Power Link - why not build the solar farm near Singapore?](https://electronics.stackexchange.com/questions/529208/australia-asean-power-link-why-not-build-the-solar-farm-near-singapore) – Keith McClary Oct 27 '20 at 01:22
  • @KeithMcClary - ah yes, another important few details: do you have the land, and how _politically_ stable is the region? – jdunlop Oct 27 '20 at 01:30
  • If solar were cheapest, across the board and with no qualification, then no one would build anything else. Every form of energy has tradeoffs, there are lots of different metrics to measure "cost", and what is best depends on the situation. – Acccumulation Oct 27 '20 at 22:16

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Its true - FOR NEW PROJECTS

Costs of power are complex, lots of factors muddling things. Even things like the rising cost of insurance for coal power factors in.

A reasonable argument can be made against that claim that solar is the cheapest, but its that "using that old existing coal plant" is cheaper than "building a new solar plant" because capital costs are included in one and not the other.

This was fact checked a few years back after an Australian politician made the claim on a Q+A panel show a few years back. It is true, unsurprisingly, that its cheaper to keep running a coal power plant that to build a massive PV farm on credit and pay off a loan.

Arena (Australian Renewable Energy Agency) estimate the cost of a large scale solar photovoltaic plant to be 44.5-61.5 $/MWH. This overlaps with the linked article (30-60$/MWH), but is greater than the estimated $40/MWH cost of running an existing coal power plant.

A fairer apples-with-apples comparison - building 2 plants - puts coal at $75/MWH and Wind at $60/MWH, both of which are more expensive than the best case $44/MWH of solar.

So Yes the article is correct, you may use that fact, but be careful your comparing "new build" vs "new build.

Ash
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  • It would be helpful to cite the actual claims from the sources you give. That would, for example, show that your link the The Conversation does NOT talk about solar energy at all, and so doesn't support your claim. – Oddthinking Oct 24 '20 at 18:44
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    The "best case" for solar appears to be predictions on what it might cost in 2020, rather than what it actually costs. I can't see that it is the "building a new solar plant" price, but the cost from the set of plants that were predicted to exist. To make this more complex, there doesn't appear to be a costing for batteries/storage technologies to demand when the solar generation isn't operating. – Oddthinking Oct 24 '20 at 18:51