Solar Power Gets Even Cheaper

I know I write about this all the time, maybe so much that is it getting boring, but it's just very important:

If you want to know the true price of renewable energy in America—free from subsidies and mandates—look to Mexico, former Energy Secretary Steven Chu said Friday.

In March, Mexico’s state utility, Comisión Federal de Electricidad (CFE), departed from almost 80 years of state-owned monopoly and let private companies bid to supply solar, wind, hydro, cogeneration, combined-cycle gas, and geothermal energy.

“The cost was about 4¢ a kilowatt-hour without the mandates, in both solar and wind,” Chu said Friday at Stanford University, where he now teaches. “Four to four-and-a-half cents with no production tax credit, no investment tax credit, no renewable portfolio standard. It’s just money, including profit. This is pretty good news.”

A GTM Research analyst revised the average price slightly higher, to about 5¢/kWh, but that price, too, is much lower than most experts would have predicted renewables would be in 2016.

“Clean energy is actually getting much cheaper than even I, as a perennial technical optimist, thought it was going to be,” Chu said.

And much cheaper than the International Energy Agency or the U.S. Energy Information Administration have predicted in recent years. As the writer Ramez Naam pointed out, last June the EIA predicted solar would cost a minimum of 8.9¢/kWh in 2020.

The average cost of electricity from coal in the US is about 6¢/kWh, and for natural gas it is 6¢ to 8¢. So unsubsidized solar power at 5¢ is a dramatic breakthrough.