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How does solar power compare to other energy sources?

When it comes to generating electricity, comparing different kinds of systems is like comparing apples and oranges.

This is because different ways of generating electricity behave in different ways. Solar power systems only generate electricity when the sun shines. Nuclear reactors can operate around the clock, and so can fossil fuel burning plants. Wind power can operate any time of day, but only when the wind is blowing of course.

With solar power, the situation is even more complex, because the “fuel source” — sunlight — is everywhere, every day, so it’s possible to re-imagine the nature of the power distribution grid, if there are widespread micro solar systems, each connected to a battery or other storage device.

Capacity factor

One way industry analysts account for the differences, is to talk about the “capacity factor” of a power source. The capacity factor is the percentage of time that a power source is operating at it’s maximum possible output (ie: its “nameplate capacity”). Systems with a high capacity factor are good base load suppliers, and systems with low capacity factors are usually good peak load suppliers.

(Base load is the minimum amount of electricity required in an electrical distribution system around the clock. Peak load is the maximum amount of electricity that is required in an electrical distribution system at any one time.)

A nuclear reactor will typically operate at an 80% capacity factor or higher, since it can run around the clock. A solar power array will typically operate at only 20% or less, due to clouds and darkness. Fossil fuel burning plants typically fall somewhere in the middle, at least in electricity distribution systems like Ontario’s, where nuclear power is available as a base load power source.

So the capacity factor helps us understand the usage patterns for different power systems. But it doesn’t help us compare them directly.

Levelized energy costs

To directly compare different kinds of power systems, we need to look at the “levelized energy cost“, which is usually given as the total cost of producing one kilowatt hour from that source of power.

To determine the levelized energy cost, we need to know the total cost of building and operating a power source for its lifetime, and we need to know the amount of power it will produce in its lifetime. This is not easy to work out, since the actual cost of operating a power source is sometimes a trade secret. We can make some good estimates though.

Here’s a summary of the estimates:

Our rooftop solar array Waldpolenz Solar Park
(photovoltaics, Germany)
Portlands Energy Centre
(natural gas turbine, Toronto)
(nuclear power station, Toronto)
Total cost to build and operate for 20 years: $29,000 $197,120,000 $2,521,980,000 $22,371,770,000
Total power output in 20 years (in megawatt hours): 75.06 MWh 805,920 MWh 38,544,000 MWh 474,354,000 MWh
Levelized cost per kilowatt hour for 20 years: 39¢ 24¢
Levelized cost per kilowatt hour for 40 years 21¢ 12¢
See the research and assumptions that went into these figures…

It’s clear from the numbers that solar power can be a fairly competitive technology, even today, when considered over a long time frame. And the electricity business is nothing if not long term. It takes a really long time to pay off the debt from building a nuclear power station. Just ask everyone in Ontario, where we will be saddled with the “Ontario Hydro Debt Retirement Charge” on our electricity bills through to about 2018 at least! I have never seen the cost of servicing debt taken into account in one of these comparisons, so don’t look at the numbers and think nuclear is really that cheap.

The cost of natural gas power generation is intensely tied to fuel costs, which inevitably will rise across a 40 year time frame. Plus, the capacity factor of Waldpolenz is a bit on the low side, so in a sunnier climate, the cost per kilowatt hour between solar and gas can become quite close. Ontario is a sunnier place than Germany, believe it or not. On top of that, the costs of solar are constantly dropping as new technologies become available, improved manufacturing processes are developed, and economies of scale are reached. Accelerating that process is one of the main goals of feed-in-tariff programs like microFIT and FIT.

Solar power also produces zero greenhouse gas emissions, which is a major benefit that is hard to put a price on. Nuclear power also produces no greenhouse gas emissions, but it has additional drawbacks that are equally hard to put a price on: the risk of environmental catastrophe in the event of an accident, or terrorist attack, and radioactive waste that lasts for 10,000 years.

Apples and ostriches

The biggest wild card when comparing solar power, and other renewable energy sources, to the traditional sources we use now, is that renewables have the potential to re-invent how we generate, store and distribute power. The sun delivers energy everywhere for us, no transmission lines are necessary. But no levelized energy cost comparison I have ever seen or heard of, has factored in the cost of the transmission system. It’s assumed to be a constant.

Over a century ago, Thomas Edison envisioned a world of distributed power generation (largely because his preferred transmission system, direct current, was inefficient over long distances). Today, solar power is leading to a world where distributed generation may be feasible.

To imagine what kind of difference large scale distributed generation could make, think of the car and the system of roads and highways that support it. Now suppose that someone invents teleportation technology, like what they have in Star Trek. If people can instantly teleport from one location to another, what happens to the car? What happens to the roads and highways? If we can beam to wherever we want to go, instantly, then we don’t need a “people distribution system.”

Our power distribution system faces the same challenge from solar power. The sun literally beams energy to every point on earth. Solar power is to the electrical system, what “Beam me up, Scotty” is to the car.

In the developing world, this fact is playing out every day. Communities that are isolated from the national power grid can get their own electricity from the sun. The Solar Electric Light Fund (SELF) was a pioneer in this revolutionary work. Today, millions of people around the world have access to electricity because of micro scale solar power systems. In technology and politics, the 21st century has already seen small and adaptable solutions triumph over large, centralized ones. If we can apply the lessons of the internet age to our electrical system, we may yet solve climate change, and a host of other challenges.