There comes a time when every stereotype has to end.
We’re seeing that happen to several of them in the energy sector right now.
First, it was the infallibility of King Coal. Next it was the promise of shale oil.
Now, it is time to bury a third, once and for all.
Renewables have been panned for years as too costly to compete. Recent news coming out of the Southwest paints an entirely different picture.
Solar is now being bought for less than coal, natural gas, nuclear, and even wind in some cases, and it is becoming the cheapest power in the world.
Bidding Frenzies
Last April, Austin Energy opened up bidding to provide 600 megawatts (MW) of solar power.
This sparked an unprecedented bidding frenzy. Khalil Shalabi, Austin Energy’s vice president of resource planning, released data showing that 7,976 MW worth of solar projects were proposed to fulfill the demand.
However, the biggest part of the data he released wasn’t the sheer volume of interest. It is how insanely low some of the bids were.
1,295 MW of those solar project bids came in well below $0.04 per kilowatt-hour. It was the lowest solar power price in the world, for merely a couple months.
In July, Berkshire Hathaway’s NV Energy secured the cheapest electricity rate in the U.S.A.
A 100 megawatt First Solar Inc. project in development is going to provide power at just $0.0387 per kilowatt-hour.
Just last year, NV energy was paying $0.1377 cents per kilowatt-hour, marking a nearly 72% decrease in cost.
As Bloomberg noted at the time, “The rapid decline is a sign that solar energy is becoming a mainstream technology with fewer perceived risks. It’s also related to the 70 percent plunge in the price of panels since 2010.”
Furthermore, Kit Konolige, a utility analyst at Bloomberg Intelligence, stated, “That’s probably the cheapest PPA I’ve ever seen in the U.S.”
Plunging Below Parity
These projects benefit from the abundant sunshine in the Southwest, but they’re not outliers by any stretch of the imagination.
You don’t need to take my word for it though. Take a look at this chart from Lazard, a worldwide leader in the financial advisory and asset management sector.
Note: The diamonds in the chart show estimated levels in 2017.
(Click to Enlarge)Solar already beats many kinds of fossil fuels and, with the exception of some wind projects, will be the lowest cost form of electricity generation within a couple years.
This chart isn’t exclusive to any single region. This is nationwide.
Solar is moving beyond price parity at a breakneck pace, and the old stereotype that we’d have to trade the economy for the environment is dead and gone.
The level of investment and participation that is poised to follow this price breakthrough is insane.
An estimated $5 trillion will be transferred from conventional fuel-based generation to solar.
Already, Google is investing $300 million; Apple is investing nearly $1 billion. Buffett has redirected as much as $15 billion. The list goes on.
It isn’t even just the private sector that will make bold moves. Governments are joining in right now.
On 124 military bases in 33 states, solar farms are going up. All military branches — Army, Navy, Air Force, Marines — are joining the rush.
The Defense Department invested $7 billion in solar in a single day.
The Navy is investing in what will be the world’s largest solar farm… one that will supply power to fourteen of its southwestern U.S. bases.
On the international scale, India and France led a coalition of 120 nations to commit to $2.5 trillion of investment.
New Paradigm, New Demands
At the heart of this change are revolutionary new designs in solar cells. With solar prices continuing to drop, this trend will have to continue unabated.
This means that all aspects of solar power face a relentless push for greater efficiency.
Not only will the solar cells have to improve, but solar cell manufacturing needs to improve as well.
As it stands, the current lines produce a high rate of defective solar cells — as high as 25%.
With all the cost of solar power installations at the front-end, these cells are wreaking havoc on people and companies.
This is exactly what happened to panels covering a warehouse roof in Los Angeles, which were installed a mere two years before they stopped working.
…Which is exactly why Outsider Club founder Nick Hodge is focusing on these two companies.
One owns patents for the latest and greatest power-boosting tech.
It is pioneering ways to completely remove expensive silver from solar cells that absorb 99.7% of the sun’s energy – double that of existing solar cells – while dropping production costs by 23%.
The other has off-the-shelf quality control products that can be retrofitted to existing manufacturing lines that boost over 90% of cells made to the highest possible rating.
The return on investment for the system is often under one year.
Check out Nick’s research, and forget about the old idea that solar can’t compete.
