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Another Sunny Day

In my recent posts where I share my excitement regarding the future of solar power, I talk about the potential cross over point where the cost of electricity, specifically from solar, is lower than the cost of gas. Well, a bit more googling, and I have some more numbers. From ‘Life after the oil crash’, I find that a gallon of gasoline contains energy equal to about 37 KWH. With gas at about $3 per gallon right now, this is about 8.1 cents per KWH versus a US average cost per KWH of 10.69 cents. As we approach $4 gas, the cost of gasoline will exceed the cost of electricity BTU for BTU.
The latest prices I see for solar show about $6000-$8000 for a 1KW installation. Assuming a 5%/yr return, that’s about $400/yr. If the system is running full power for 2000 hours per year, we are at a 20 cent per KWH cost for solar. Still more than what we’d pay our electric company, but prices are still falling. We may be a few years away, but the current oil crisis will only help the cause (for solar).


  • Augustine March 18, 2008, 12:37 pm

    However, the initial costs are way too high. 1kW is barely enough to supply energy for a house’s light bulbs, yet they are not that necessary during the day.

    Yet, the true high bar is nuclear power, at 6 per kWh.

  • JOE March 18, 2008, 4:49 pm

    Absolutely, but see my references to Moore’s law. If the cost of solar continues to drop on the path it’s on, it will soon be cheaper than higher cost energy, and then cheaper than nuclear a few years after. I paid $300 for a 170MB (yes megabyte) drive 15 or so years back. That’s $1800 per gigabyte. New drives sell for 25-30 cents per GB. Imagine a day when solar power is 1 cent per KHW during the day, and 5 cents at night. We’ll be waiting for storage (battery) technology to catch up. As always, thank for visiting and sharing your thoughts.

  • Augustine March 21, 2008, 5:36 pm

    Moore’s law doesn’t apply to anything made of Silicon. Integrated circuits fall in price because Moore said that it would be increasingly possible to shrink transistor sizes, therefore allowing to increase their number per area. And given that the cost of manufacturing integrated circuits relies heavily on the area, the more transistors per area, the cheaper the integrated circuit. Similar advances were made in hard disk technology, cramming more bits per area.

    Photo-voltaic cells are not made up by Silicon transistors, but by a Silicon film deposited on a surface. Therefore, its area cannot be reduced and its cost is not subjected to Moore’s law.

    As any other new technology, cost reduction of photovoltaic cells will come from larger production volume, but don’t count that it’ll follow the same pace as disk drives.

  • JOE March 22, 2008, 12:52 pm

    I don’t expect the kind of price drop that we saw in processors and drive densities, just suggesting that there’s the crossover point, first when solar is cheaper than the most expensive source of power, then as prices drop due to economies of scale, we should get below the magic 6 cost of nuclear. We don’t need a 1000X cost savings, just 2-4X from where we are now. As always, thanks for visiting, your posts are always welcome.

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