German Solar power may be cheaper than fossil fuels in 5 years

• 13 years ago (2010-11-04)
• Junior Isles

Europe 1061 Nuclear 640 Renewables 752

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A study by A.T. Kearney Inc. shows electricity from solar panels in Germany may be as cheap as power from new gas and coal plants within as little as five to eight years.

The study, which was commissioned by solar array developer Phoenix Solar AG, claims production costs for solar power could be as low as 12.6 € cents ($0.18) per kilowatt-hour by 2020 compared, with about 15.6 cents for fossil-fuel electricity generation.

This would represent an almost 50 per cent reduction in the current price of 23.9 cents/kWh for solar-generated electricity. The prediction, though, depends on continued growth in demand for panels said Andreas Haenel, chief executive officer of Phoenix Solar.

The study argues that solar power costs are being unfairly compared with older coal and nuclear power plants. This is making the costs for photovoltaic and thin-film panels look more expensive than they really are. Haenel claims “newly-installed modules” should be compared with new natural gas or coal-fired plants, which would give a more “realistic” assessment of the real economic costs of solar energy.

“This year was the first time that the economic benefits of installed solar panels are greater than the costs,” he said, citing the study, which considered the benefits of tax revenues and lower carbon dioxide emissions.