When will Solar be Cheaper than Coal?

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As anyone in the energy game will tell you, it’s all about price. What is the Levelised Cost of Energy or LCOE? the LCOE is represented into a per unit price of energy or kilowatt hour or kWh. There are literally hundreds of data points that determined the kWh price of energy. Most discussions revolve around the initial capital expense of building the equipment to generate electricity however in reality its actually the ongoing financing and operating costs including fuel costs that have a far greater impact on the kWh price since the kWh price takes into account the life time that each generating system has. When we are talking about power stations such as solar, coal, gas or nuclear this can by from 20 to 50 years. Imagine the cost of all that fuel.

When one looks at a comparison between solar and coal the main difference is that coal power stations need ongoing supplies of fuel/coal in order to it to operate whereas solar has free fuel in the form of sun radiation. Thus if we can understand better the future price of coal, perhaps we can predict when solar power will become cheaper than coal.

Recently GE’s Global Research Director Mark M. Little said that GE will soon be able to produce electricity at prices that are cheaper than current coal power stations.

First Solar believe it will be able to compete with conventional electricity generation within 3 years.

These discussions of course don’t take into account the enormous health costs of coal burning power stations. Recently a Harvard Medical professor coauthored a paper that the health costs of coal power in the US alone is more than $500 billion.