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Solar energy is bullish in the market; the same can’t be said for nuclear

……..Solar rising,   By Alex Kimani for Oilprice.com  16 Nov 20, 

Whereas the nuclear sector comeback has its work cut out for it, solar power has clearly been on the ascendancy thanks in large part to falling costs.

Nuclear advocates have pointed to rising electricity costs in California as the reason why other states should think twice before adopting its model. Environmental Progress has reported that between 2011 and 2018, power costs in the Golden State increased by 27.9% compared to a 4% national average. This period coincided with a period when California has been aggressively ramping up its renewable generation capacity. Renewable sources currently account for ~30% of California’s electricity generation with an aim to double that by 2030 and hit 100% by 2045.

But that’s being a bit disingenuous because it fails to capture just how much solar costs have fallen over the timeframe.

According to the Solar Energy Industries Association (SEIA), solar installation costs have dropped by more than 70% over the past decade, opening up vast new markets and systems nationwide. The organization says prices as of Q2 2020 dropped to their lowest levels in history across all market segments, with utility-scale prices ranging from $16/MWh – $35/MWh, thus making it competitive with all other forms of generation. Meanwhile, costs for the average-sized residential system were cut in half from a pre-incentive price of $40,000 in 2010 to roughly $20,000 today.

And no, renewables are not to blame for California’s blackouts.

Higher Soft Costs Remain

A common complaint is that solar power is only becoming cheaper for utilities but not for residential applications.

That’s partly true but not entirely so because residential costs have actually been falling but at a slower clip than their bigger brethren.

According to SEIA, residential PV pricing fell only 20% between 2014-2020 to $2.84/Watt mainly due to soft costs, including labor, overhead costs, supply chain, customer acquisition, and permitting/inspection/interconnection costs remaining high. Further, inconsistent permitting practices and building codes and permitting practices across jurisdictions have led to some regions not being able to enjoy the full benefits of falling hardware costs.

Strongly Bullish 

Despite these challenges, the solar sector remains strongly bullish.

Indeed, S&P Platts says that the shift to renewable energy is likely to continue full steam ahead regardless of fed policies noting that the energy transition has “clearly been moving forward on a regional basis,” despite lacking clear endorsement at the federal level under Trump.

It remains to be seen whether nuclear energy can command the same level of support.

 

 

November 17, 2020 - Posted by | 2 WORLD, business and costs

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