Renewed interest
Rising energy prices make solar more cost-competitive
Clay Holtzman
NMBW Staff
At Advent Solar's pilot manufacturing facility in Albuquerque, workers are making solar panels that use fewer materials, produce more electricity and are easier to manufacture than conventional photovoltaics.
The goal is to use new technology and manufacturing processes to make the panels as cost-competitive as possible with traditional electrical generation methods that rely on natural gas and coal. Company CEO Rusty Schmit says that under mass production, his company's panels will produce electricity that will cost about half as much as conventional panels. The company is scheduled to deliver its first products to customers this fall.
Advent is following the same path as countless other renewable energy companies that, since the dawning of the clean energy movement, have striven to make solar and other sources of renewable energy as affordable to use as fossil fuels. Experts say once renewables become as cost effective as traditional energy sources, and without the crutch of government subsidies, the clean energy movement will take hold and a new energy age will begin. But until then, they say large scale market penetration by renewables will not occur.
However, thanks to rising fuel prices over the last year, exacerbated by the widespread damage of Hurricane Katrina that devastated the gas- and oil-rich Gulf Coast region in late August, solar energy is becoming more attractive on a cost basis. And, as other fuels become more expensive, solar is less expensive by comparison.
"The economics for solar are a little more affordable than what it would seem on the surface," Schmit says.
Schmit says residential photovoltaic systems typically generate electricity that, after the capital cost of the panel is divided out over the its lifetime, costs users between 20 and 25 cents per kilowatt hour -- a far cry from the seven to eight cents per kilowatt hour that consumers pay, without the up front capital costs, for electricity from coal-fired plants, the most common source of power in the U.S.
But rising demand, especially during peak times when much costlier gas-fired plants are activated to meet demand, can propel the cost of consumers' electricity to between 25 or 30 cents per kilowatt hour.
Ben Luce, president of the New Mexico Solar Energy Association, agrees that rising energy costs have added an extra "oomph" to the solar energy movement. Solar is benefiting more than wind power because wind was already approaching cost competitiveness with natural gas and even coal, Luce says.
"The cost reduction curve looks like it's going to be [equal] in about 10 years," he says.
With gasoline rising to record levels recently -- averaging nearly $3 a gallon in many states -- solar power is already becoming more cost-competitive with gasoline. Luce says an electric-powered Toyota Prius, outfitted with additional batteries that are charged with solar power, can achieve a mileage equivalent to about $2.10 per gallon.
Additionally, thanks to the state and federal incentives and tax credits that are part of the new federal energy bill, solar systems designed to generate heat or electricity are even more economically attractive.
And last week the Albuquerque City Council passed a bill offering up to $1 million in incentives and tax credits for companies that manufacture solar energy products or that create solar energy technologies.
Part of what makes solar panels more cost effective is that they usually produce the most electricity for residential users during peak times in the afternoon, when homeowners might be running air conditioning systems or energy-hungry appliances.
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