US: PV now cheaper than nuclear energy

This has prompted calls for Governor Perdue, the General Assembly, the Energy Policy Council and the N. C. Utilities Commission to "investigate these matters and see for themselves that a very important turning point has been reached". It also states: "… solar electricity is fully expected to be cost-competitive without subsidies within the decade."

A new report, titled Solar and Nuclear Costs – The Historic Crossover, by the former chancellor of U.S.-based Duke University and emeritus chair of its economics department Dr. John O. Blackburn, and Sam Cunningham, a masters candidate at the university’s Nicholas School for the Environment, states that in the past year, the lines have crossed in North Carolina due to falling costs of solar PV systems and rising projected costs of new nuclear plants. "This new development has profound implications for North Carolina’s energy and economic future. Each and every stakeholder in North Carolina’s energy sector – citizens, elected officials, solar power installers and manufacturers, and electric utilities – should recognize this watershed moment."

The report continued by saying that U.S. utilities are seemingly "oblivious" to energy economic trends, which are being recorded in competitive markets. It said: "The state’s largest utilities are holding on tenaciously to plans dominated by massive investments in new, risky and ever-more-costly nuclear plants, while they limit or reject offers of more solar electricity.

"Everyone should understand that both new solar and new nuclear power will cost more than present electricity generation costs. That is, electricity costs will rise in any case for most customers, especially those who do not institute substantial energy efficiency upgrades. Power bills will rise much less with solar generation than with an increased reliance on new nuclear generation."

It then went on to explain that it is a requirement of U.S. state law that the electrical system must be developed according to the least-cost path available. “… solar PV has joined the ranks of lower cost alternatives to new nuclear plants," it stated.

It added: “Everyone should understand that both new solar and new nuclear power will cost more than present electricity generation costs. That is, electricity costs will rise in any case for most customers, especially those who do not institute substantial energy efficiency upgrades. Power bills will rise much less with solar generation than with an increased reliance on new nuclear generation.

"Commercial-scale solar developers are already offering utilities electricity at 14 cents or less per kWh. Duke Energy and Progress Energy are limiting or rejecting these offers and pushing ahead with plans for nuclear plants, which, if ever completed, would generate electricity at much higher costs – 14–18 cents per kilowatt-hour according to present estimates."

The report additionally focused on the tax benefits currently applied to solar electricity. "It is true that solar electricity enjoys tax benefits, which, at the moment, help lower costs to customers. However, since the late 1990s the trend of cost decline in solar technology has been so great that solar electricity is fully expected to be cost-competitive without subsidies within the decade. Nuclear plants likewise benefit from various subsidies – and have so benefited throughout their history.

“Now the nuclear industry is pressing for more subsidies. This is inappropriate. Commercial nuclear power has been with us for more than forty years. If it is not a mature industry by now, consumers of electricity should ask whether it ever will be competitive without public subsidies. There are no projections that nuclear electricity costs will decline."

To underpin their point, the authors drew on research conducted by the Lawrence Berkeley National Laboratory, which showed that solar PV system costs declined from USD$12 per installed watt in 1998 to USD$8 in 2008 on average, or a one-third decline in ten years. "In 2009 and 2010, costs declined more rapidly as module prices fell sharply, bringing the 12-year system cost decline to 50 percent," explained the report. "At mid-2010, based on figures provided by North Carolina installers, large systems can produce electricity at 12–14 cents or less per kilowatt-hour, while the middle range for residential systems comes in at 13–19 cents per kilowatt-hour … The possibility of selling renewable credits tilts the advantage farther in the direction of solar electricity.

"Experienced industry observers see PV system costs continuing to decline in the coming decade as the industry – from cell makers to installers – expands at a record pace and moves rapidly along the typical industrial ‘learning curve’ … Present mid-range costs are 14–19 cents per kilowatt-hour for rooftop solar electric systems, and approximately 14 cents for commercial- scale systems. Sector-wide costs in 2020 are projected to be 7.5 cents per kilowatt-hour. Cumulative worldwide installations at the end of 2009 passed the 22,000-megawatt (MW) mark. Germany, Spain and Japan led in total installed capacity with 9,000 MW in Germany alone. The U.S. figure stood at 1,653 MW of which 1,102 MW was in California and 128 MW in New Jersey. North Carolina’s share was 13 MW. The PV market is poised to explode worldwide as a ‘least-cost’ way to generate electricity. By comparison, no U.S. nuclear power plants have been put into service in many years."

The report concluded by stating: “We must make decisions now that allow us to look back at the spring of 2010, when solar energy became cheaper than new nuclear plants, as the time when North Carolina changed its future."

Click here to read the full report.