No Sun at Night? No Problem!
By George Harvey
Solar PV panels at sunset at NRG’s Blythe Solar Farm. Photo: Flickr/ Charlie Waterfall
In May, we learned that Barclays, the international finance bank, had downgraded the status of bonds from all utilities in the United States because they believed the market had failed to account for the effects of distributed solar power. In June, we found out what their reasoning was. They had come to the conclusion that for 20% of US utilities customers, within four years it would be less expensive to depend on the combination of solar photovoltaics (PVs) and batteries than to buy utility power.
This is particularly interesting for customers in the New England area because it is one of three places in the US where utility power prices are highest, the others being Alaska and Hawaii. That being the case, we can conclude that we in New England are part of the 20%.
Fortunately, there is movement in some utilities in the New England area to come up with new business plans, making it possible for them to ride the storms of change. Green Mountain Power seems to be leading the way in this. Having the utilities actively involved in the switch to renewables can be a great benefit to consumers.
This situation is reflected elsewhere in the world. An article appeared in The Guardian, a British newspaper, about a trend that could be clearly seen in Australia, but would soon apply to the rest of the world. The title was, “Solar has won. Even if coal were free to burn, power stations couldn’t compete.” It includes analysis showing that the cost of maintaining Australian transmission, servicing many widely separated towns, is high enough that even if power plant fuel were free, the grid could not compete with the combination of solar and batteries. (Source: http://bit.ly/solar_has_won) As the costs of solar and batteries continue their rapid decline, this situation is the case in more and more places. (See an article on the costs of batteries on page 12.)
Economist Jeremy Rifkin pointed out in the Wall Street Journal article, “Say goodbye to capitalism as we know it” that the advantages of solar power will have profound effects on our economy. One reason for this is that the marginal cost for electricity from solar PVs is close to zero. This means that once the unit is paid for, the cost of power from it is nearly nothing. Whether it is a large solar farm or a private rooftop installation, after a few years, it costs the owner almost nothing to get power from it. Furthermore, the PVs keep on producing year after year, at very low cost, for a very long time – perhaps fifty years, perhaps much longer.
The implication is that as more PVs are installed, increasing amounts of energy will be available that cost practically nothing to produce. According to Rifkin, this will foster an extension of what is called the “collaborative commons,” under which certain goods will get so inexpensive they will be given away, possibly as an inducement to customers buying other things.
The idea of goods being free may sound as preposterous as electricity too cheap to meter, but it is already happening. Fifty years ago, computers with memory costing $1 per bit were still valued highly. Today, it is possible to go into a stationery store and buy a 32-gigabyte camera chip for $18, a price that is less than a millionth of a cent per bit. That being the case, it is unsurprising that a person can get an unlimited number of blogs from a provider such as WordPress, each free, and each with three gigabytes of free memory – the company hopes to get its profits from other, related things. We might point out that the solar PV technology is closely related to that of computer chips.
The important message here is that the prices of solar power and batteries are going so low that they will not merely be an inexpensive solution to household and commercial power, a point they are rapidly approaching. It is that they are becoming so inexpensive that they will change whole economies profoundly, in many ways for the better.
The times are a-changin’, and it looks more and more sunny.
Leave a Reply