Time Makes Solar Cost-Competitive Right Now

Alan Cleaver/CC BY 2.0

The other day I wrote a post about why solar panels are cheaper than we've been told. It turns out that many of the studies—which are often already predicting that solar will be cheaper than coal in the very near future—regularly ignore the dramatic price reductions that have happened in solar manufacturing in the last few years.

Solar Panels Last Longer Than Reported
But the other part of the puzzle—which is perhaps more significant—is that most studies estimate a 20 year lifespan for solar, when the real-world longevity of modern equipment is closer to 30 years or even more.

"How neat,"
I thought. "If solar lasts 10 years longer than we thought it did, it's actually a third cheaper."

But even that understates the significance of this fact. Because the "bonus" 10 years we are talking about will be competing with conventional energy that is significantly, if not astronomically, more expensive than it is now.

Time Changes Everything
This is a point that is picked up by John Farrell over at Renewable Energy World. Riffing off of Paul Krugman's Here Comes The Sun article in the New York Times, Farrell explores "the chart that Krugman left out"—crunching some numbers on why three key factors make solar a winning proposition for many householders right now:

1. Grid electricity prices are not fixed, but changing. Over the past decade, electricity prices have risen, on average across the United States, 3 percent per year. The solar electricity price is locked in once the panels are operating.
2. Some utilities have time-of-use rates that charge more for electricity during peak times (hot, summer afternoons) that rise as high as 30 cents per kWh. Solar competes favorably against these rates.
3. There are federal, state and utility incentives for solar that reduce the cost. The 30% federal tax credit, for example, is in statute until the end of 2016.

Farrell concludes that 60 million Americans can buy solar that's cheaper than coal right now. Even without federal subsidies, assuming energy inflation continues as in previous years, between 50-90 million Americans could be beating their utilities electricity price based on a solar installation cost of $3.50 per watt in 2011.

Time Can Be Our Enemy Too
The passage of time may make a compelling case for why solar is effective now, but it also sounds a very important alarm bell. As the depressing proceedings at the Durban climate conference showed, there are plenty of peopl who would rather procrastinate than tackle our ever growing CO2 emissions right now.

But here is where time becomes our enemy, or at least our challenger. Because CO2 cuts we make now are worth infinitely exponentially more than CO2 cuts we make in decades to come. The climate doesn't really care what our annual carbon output is—but rather how much carbon is in the atmosphere as a total. The more we cut now, the less we will emit in each subsequent year. Vice versa—if we wait for technologies to improve, political will to solidify (and maybe hell to freeze over) we need to make much, much deeper cuts to keep atmospheric carbon levels down.

Time is on our side. And it's not. Let's get our act together in a timely manner.

Tags: Activism | Economics | Global Climate Change | Renewable Energy | Solar Energy | United States

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