Promotion of solar power generation is booming. After analyzing a few of these announcements one is left with quite a few questions. Why are solar farms built when financial data clearly show that solar power is still the most expensive electricity generation technology available?
Solar power plant developers and marketers obviously know that they need to lower costs. Cost reduction is, however, expensive and takes time. Many new enterprises have been formed and want to become profitable when the big construction boom in solar power plants will hit the road. In the meantime they must pay bills, advance their
There are two major
Very recently, IBM proposed a third concept, a kind of a hybrid approach. In this concept, the sunlight is concentrated onto a solar panel. This approach reduces panel area and saves lots of expensive silicon. But it generates another problem. The concentrated sunshine creates very high surface temperatures on the solar panel. To save solar panel area and make the solar panel price competitive, one must cool the surface of the solar panel very efficiently to prevent it from melting and destruction.
Installing highly effective cooling loops and providing a low temperature cooling medium presents a new set of technical challenges and costs. We will have to wait and see how IBM will solve these issues.
Present production costs for generating electricity with solar panels are hovering around $0.50 per kWh. This compares with an average US retail price for electric power of $0.095/kWh. Right now, solar power does not yet make economical sense.
This is also one of numerous examples where free markets perform poorly. The
The US cannot reduce its carbon dioxide emissions and cannot achieve energy independence without employing renewable energies for electric power generation and for the critical production of liquid transportation fuels.
At present, a respectable number of windmill farms and solar panel farms are being installed. Forward thinking industrial and public entities take the liberty to impose hidden taxes on the consumers of electric power in industry, in commercial enterprises, and in homes.
Solar power does not make economical sense, yet. However, by providing an income guarantee for investors, the crucial hardening and cost reduction phase of full size solar farms will be shortened tremendously.
There is one inherent danger in this approach. The consumers of electricity pay for this most crucial development phase while other participating parties make out handily. Effective controls for avoiding unproductive duplication of certain types of solar farms are sorely missing.
Duplication of experience is much less valuable than gaining broad experience from competing
Where are we now? A random sampling of recent announcements of solar farm installations reveals that system installation costs are in the $3000 to $7500 per kW installed capacity. These plant costs loosely translate into a cost of producing electric power at $0.30 to $0.60 per kWh. This very unfavorably compares to the cost of electricity generation by any other
These figures do not yet contain the costs of energy storage. As long as solar power constitutes only a very small fraction of overall electric power generation, the additional costs of storing intermittently produced electric power are not yet of concern. If the US is going to depend significantly on the intermittent production of electricity from solar power and wind power, it must begin to develop storage