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by h3lp
66 days ago
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They say $0.01/kWh is the target price, to be reached after some decades. Don't get me wrong, I am excited about solar power but careful about the economics: the capital cost of solar right now is well over 1$/W (panels+inverters+installation/hookup) and even though it is falling nicely, the amortization schedule needs to be considered.
A rule-of-thumb figure is 1kWh of power per year from 1W nominal installed, so the capital cost will have to be amortized over 100 years to reach $.01/kWh. The installed price has to come down by a factor of 10 for this to work out. |
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You can only get an accurate cost if you create a simulation of every step of the industrial processes of manufacturing the silicon ingots, the glass, aluminum, the silver and labour that goes into making solar panels. Same for batteries, electronic components, etc. You have checks and balances in the simulation, for example you get the cost price of all the material components that you can check against the actual price for sale at the factories, the shipping cost, the wholesale prices on offer, the retail prices in different countries, the installation cost, the underlying loans and their interest rates and labour. But that simulates just the cost of the materials, you have many other factors. For example did the energy used to make the solar cells come from solar or from coal plants? Did you make thin film solar or silicon wafer solar cells. What battery chemistry. How much losses if your solar panel overheats 3 percent of the time. What latitude and longitude did the solar panels operate, at what angle to the sun? Compared with such accurate cost simulation models calibrated with actual prices paid your claim is very vague and hand-wavy.
The Levelized Cost of Energy (LCOE) is a metric representing the average total cost of building and operating an energy-generating asset over its lifetime, divided by the total energy output produced during that period. It serves as a, "break-even" price per unit of energy (e.g., $/MWh), allowing comparisons between different technologies.