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Two weeks ago, Matador covered news that solar power is officially the world’s cheapest source of energy. This was based on data showing that solar farms are cheaper to build than other types of power plants.
A reader raised an interesting question: While solar power plants may be cheaper to build, is solar power cheaper to produce and deliver to the power grid on an ongoing basis, in comparison to other forms of power?
Let’s take a look.
The productivity of power generation, and the cost to produce that power, is measured in megawatt-hours. One megawatt-hour is equivalent to powering 650 homes for one hour. According to a recent New York Times report, one megawatt-hour of solar power delivered to the grid costs between $31 and $111 to produce and deliver. Other sources have placed that cost at around $50 per megawatt-hour on average. 2020 numbers put natural gas at $59 per megawatt-hour, and a study by the Energy Information Administration, released by the state of Michigan, analyzed 2013 costs at the rate of a megawatt-hour of natural gas at about $65.
So while the cost of natural gas power production has decreased slightly in the past several years, the cost of solar power production has decreased at a far greater rate, upward of 80 percent in the past decade alone. Given that renewable energy and natural gas have both doubled in the last decade as a percentage of total power sources in the US grid — to 20 and 40 percent, respectively — the cost of renewable energy is clearly dropping more quickly. At this rate, we can expect solar to become significantly less expensive per megawatt-hour than natural gas within the decade.
Other costs to consider are labor and extraction. Once a solar farm has been installed, it essentially runs itself — although there are of course ongoing costs related to maintenance, compliance, and grid operations. Moreover, solar farms don’t require extraction of a non-renewable resource (the sun isn’t going to stop shining any time soon), which requires labor and other costs related to the process. Because it’s taking its power from the sun instead of using materials extracted from the earth, solar power avoids “cleanup costs” and the potential for disaster — like the massive Deepwater Horizon oil spill and countless other oil spills and natural gas leaks.
That said, utilities have repeatedly stated the need for an “on and off switch” when it comes to the electrical grid to ensure power is always available. Because solar and wind energy don’t produce 24 hours per day, the argument goes, natural gas power is needed at least as a backup for times of peak power usage or in the case of outages, emergencies, and so on. So-called “peaker plants” cost between $122 and $162 per megawatt-hour.
The renewable energy alternative to “peaker plants” is battery storage, a technology undergoing rapid development from companies like Tesla and many other companies focused specifically on solar power. Currently, solar and wind battery storage can run upward of $400 per megawatt-hour, vastly exceeding the cost of “peaker plants.” But this price is set to drop dramatically in the coming decade as technology advances. According to a report from asset management firm Lazard, battery storage of renewable energy will soon become one of the — if not the singular — most economically viable form of on-demand peak energy. So stored solar power will also be cheaper.
Effectively, the cost of producing solar power is cheaper than natural gas now, and its storage will become cheaper in the near future.
More climate wins
Costa Rica is asking travelers to offset their carbon footprint when traveling to the country. Through an easy-to-navigate portal on the country’s tourism website, international travelers can calculate the carbon emissions produced because of their travels and make a quick donation to an offset program to have those emissions taken from the atmosphere.
AZCentral reported this week that Arizona regulators approved a mandate that utilities must provide 100 percent carbon-free energy to consumers by 2050. But the deal came with a caveat. There are no specific renewable energy requirements, meaning nuclear energy can be used as well as “energy efficiency measures” to help residents reduce consumption.
McDonald’s unveiled its McPlant burger to the world, the first meatless entree option from the fast-food giant. Co-created with Beyond Meat, the plant-based burger will debut in 2021. To be sure, this in no way makes McDonald’s a “green” place to eat — but it gives consumers a way to enjoy the convenience McDonald’s provides without having to outright endorse unsustainable animal agriculture practices.