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7 Important Cleantech Price Points Worth Remembering

Cleantech pricing

Irish writer Oscar Wilde defined a cynic as a “man who knows the price of everything and the value of nothing.”

But a sentimentalist, Wilde wrote, “is a man who sees an absurd value in everything, and doesn’t know the market price of any single thing.”

We think we’ve found a balance between the two. Below is a list of seven important price points from this year that are proving the value of cleantech. 

30-year solar PPA: 6.9 cents per kilowatt-hour
In July, Palo Alto’s municipal utility approved 80 megawatts of solar PV projects that will supply 18 percent of the city’s power load. By purchasing the power for 6.9 cents per kilowatt-hour over a 30-year period, the city secured one of the lowest power purchase agreements recorded. “Try building a new nuke or coal plant at that price,” said Adam Browning of Vote Solar.

LED street light: $99
After rolling out an LED bulb for less than $10 at Home Depot, lighting company Cree is now offering a $99 LED streetlight with a payback of less than a year. With manufacturers continuing to drop the cost of producing LED lights, the price of products continues to fall, opening up previously inaccessible markets for the technology.

Lifetime cost of an electric vehicle: $44,325
The upfront price of electric vehicles is still a major barrier for drivers. But when the Electric Power Research Institute compared the lifetime costs of EVs, plug-in hybrids and conventional cars, it found that the Chevy Volt and Nissan Leaf cost less than 10 percent more. When factoring in tax credits, the cost of gasoline and maintenance, EPRI found that the average EV only cost $44,325 over its lifetime.

Multicrystalline solar module manufacturing: $0.36 per watt
From 2010 to 2013, leading Chinese solar companies dropped the cost of producing a multicrystalline solar module by 54 percent down to $0.50 per watt. GTM Research Senior Analyst Shyam Mehta recently outlined how leading Chinese solar companies can continue the trend and bring the cost of producing a modules down to $0.36 per watt. The answer: advances in conversion efficiency, reducing yield loss and automating production lines.

Intelligence in LED fixtures: $0.05 per square foot
There’s a rush to make controllable LEDs more intelligent by embedding sophisticated computing platforms in lighting fixtures. Sounds expensive, right? Not necessarily. As companies develop new integration partnerships at the manufacturing level, Digital Lumens CEO Tom Pincince said the cost of embedded intelligence is moving toward $0.05 per square foot — down from more than a dollar. “This will bring us from dollars to dimes, and eventually from dimes to pennies,” said Pincince.

Centralized solar inverters: $0.14 per watt
Just like we’ve seen in the solar module market, inverter prices are falling quickly due to shifting demand for product and oversupply. As a result, GTM research projects that centralized inverter prices will fall 10 percent annually through 2016, hitting $0.14 per watt by 2016. That’s going to put major pressure on inverter manufacturers. But the market should moderate after 2016, alleviating some of that pressure after a period of consolidation.

Decrease in the price of energy efficient appliances: $12
Conventional wisdom says that efficiency standards will raise the price of products. In some cases that’s true. But in the appliance sector, it turns out that standards have actually reduced the price of dishwashers, dryers and air conditioners. According to an analysis from ACEEE, nine recent Department of Energy (DOE) standards have dropped the price of appliances by $12 on average. That’s exactly the opposite what DOE said would happen. When the rules were being crafted, the department estimated a $148 increase in the upfront price of those products.

(For the cynics out there, keep your eyes peeled for an article on price points that some in the cleantech business would like to forget.)

greentech mediaGreentech Media (GTM) produces industry-leading news, research, and conferences in the business-to-business greentech market. Our coverage areas include solar, smart grid, energy efficiency, wind, and other non-incumbent energy markets. For more information, visit: greentechmedia.com , follow us on twitter: @greentechmedia, or like us on Facebook: facebook.com/greentechmedia.

Stephen Lacey's picture

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Bob Meinetz's picture
Bob Meinetz on Sep 15, 2013 7:40 am GMT

Stephen, while Palo Alto’s solar power purchase may be the lowest ever recorded, it also locks in dependence on fossil fuels for those other times when the sun is not available.

As Germany’s green energy experiment is making abundantly clear, solar is an expensive, feelgood measure which increases carbon output, and has no chance of scaling to meet the needs of an exploding, energy-hungry global population.

Thomas Garven's picture
Thomas Garven on Sep 15, 2013 4:49 pm GMT

Dear Bob:

I read your posting and at first did not understand your first paragraph; the part about “dependence on fossil fuels”. Then I read the second paragraph. Before I retired I worked in the public utility and energy production sectors for 25+ years. Certainly some explanation of why the U.S. is not like Germany is in order.

The electrical grid I am most familiar with is this one [see link]. It is pretty typical U.S. electrical grid with the only difference being it has a little more solar and wind [renewables] than say an East coast or Midwestern grid might have.

 

http://www.caiso.com/Pages/TodaysOutlook.aspx#SupplyandDemand

As you can see today the CAISO is projecting a peak of about 34,400 MW. Available reserves are projected to be about 44,000 MW. Renewable from wind, solar, hydro and other sources are contributing about 3200 MW at about 8:00 am. As expected; wind power is decreasing and solar is increasing. Scroll down the page to see how these wind and solar sources fit into the needs of the grid. Now click on the below link and take a look at the graph that shows what happens on the grid on a typical day. As you can see various sources are used throughout the day to support the needs of the grid.

http://www.caiso.com/Documents/PoweringtheNewGrid-Renewables.pdf

So far we have established that the CAISO grid has LOTS of reserve power available to meet any energy demand. Most of those reserves however are fossil fuel based and as you correctly stated results in more carbon. What we are really trying to do is to displace as much of this carbon based production as we can. We could therefor easily add 20,000 MW of wind, solar, hydro and other renewable capacities and never have to build ANYTHING even if that 20,000 MW suddenly went away because the wind stopped blowing and it was raining all day in California. It wouldn’t really matter since we have all kinds of backup power and even more power sources available from other states.  That power however may or may NOT be CLEAN power.

Think of California as a state with a big wagon wheel over the top of it. The center hub of the wheel is where the power is needed and the spokes pointing out towards the rim are transmission lines to different sources of supply. Some of these transmission lines run within the state and some go outside of the state. Nuclear, solar and coal power from Arizona. Geothermal, solar and wind from Nevada. More coal power from the Four Corners, Hydro power from the Northwestern part of the U.S. and Canada and still more power from Mexico and still more from Texas wind farms. The grid is not limited to within the boundaries of a state but is rather many different power sources spread throughout MANY different states.

 

After all of this is said and done it should be pretty obvious that if we were to add say 20.000 MW of additional clean renewable energy to the CAISO grid, that energy would only make a very small dent in reducing the amount of fossil fuels and carbon we burn. We might be able to shut down a few coal plants or maybe burn less natural gas but we certainly wouldn’t have to add any ADDITIONAL fossil fuels to the mix.

There is more than enough renewable energy to go around. We only continue to BURN stuff to make electricity because its cheap and we have lots of people lobbying for its continued use. However, based on my experience burning stuff does NOT lead to clean air to breath and clean water to drink and I am pretty sure everyone enjoys that.


Bob Meinetz's picture
Bob Meinetz on Sep 15, 2013 6:40 pm GMT

Thomas, you’re correct in that adding new solar and wind to the Western Regional Grid will add no carbon in 2013. My point is that we should be aspiring to a zero carbon portfolio, and renewables lock in fossil sources (specifically, gas) for the forseeable future because of the ability of CCGTs to balance their variable production. They’re expensive to integrate, have a huge environmental footprint, and are largely a non-solution to a serious problem.

I’m unsure of how you meant to show the California grid was different than Germany’s; as far as I know the technical considerations are similar.

Thomas Garven's picture
Thomas Garven on Sep 16, 2013 12:00 am GMT

Hi Bob: Seems like its just you and me are posting on this story. 

“you’re correct in that adding new solar and wind to the Western Regional Grid will add no carbon in 2013. My point is that we should be aspiring to a zero carbon portfolio…”

I totally AGREE that the best outcome would be a zero carbon portfolio. I also believe that there will NOT be an increase in the carbon content of the grid for at least another 20-40 years if we install more renewable energy systmes.  However the amount of renewable energy we would need and the length of time it will take us to get it installed and the costs involved might be even more than the United States can manage unless done over time. Lets examine a couple of alternatives.

Lets start out with a solar example and don’t get me wrong – solar is not the complete answer to our energy needs – it is but one piece of the puzzle. Lets look at what happens when we add about 20 solar panels to a house. Every time we add solar panels to a home it means we are NOT burning an EQUIVALENT amount of some other fuel like coal or natural gas to create that electricity during the DAYTIME. If for example, we could install solar panels on not just one but say 30 million homes, then those homes would also be producing their own carbon free electricity during the DAY. That means if we could afford to do that; during the day there would be a massive reduction in carbon.  Probably enough clean power to allow us to shut down several hundred coal and natural gas plants

I have seen several studies that have indicated that solar COULD provide all of the electrical power we need in America during the DAYLIGNT hours.  Of course as the sun went down a few hundred coal and natural gas plants would need to be started back up unless some other forms of power were used. Actually it wouldn’t work quite like that but for illustrative purposes lets assume that is correct, o.k.

While some individuals actually say this 100% solar power society is possible it is not something I would recommend. It would however massively reduce our carbon footprint since most of our carbon is created during the day when everyone is at work. How long would it take to become this carbon free daytime society?  My best guess is about 20-40 years and probably longer. Way longer than I am going to live, ha ha.

BUT as we know solar doesn’t work at night so we need to do something else. Maybe things like; solar thermal storage, battery storage, nuclear, Ocean Thermal Energy Conversion OTEC, pumped hydro, hydro-kinetic [ocean/river currents] and maybe some combination of the above carbon free energy sources along with wind which works well at night. My crystal ball broke about a week ago so I am pretty much guessing what we are going to do, LOL.

I don’t have a lot of hope for anything like the above happening and I am quite concerned that as a country we are heading for FAILURE. If there is a weakness in America it is our inability to see past the next election. Here we are supposedly the most power country on the planet and we don’t even have an ENERGY PLAN. We just go stumbling along waiting for the next crisis to throw money at. We have been spending hundreds of billions on useless wars instead of on our schools, infrastructure, research and development and energy systems that will make us more competitive in the future. Every day I see us going backwards.

“I’m unsure of how you meant to show the California grid was different than Germany’s; as far as I know the technical considerations are similar.”.

Basically there is probably no difference but I have never looked at their system.  I do know that their country is not well suited for solar. Their feed-in-tariff system has been very costly but depending on your viewpoint; not necessarily cost effective. Like our 30% solar tax credit.  If we had a responsible government it would be gradually reducing that credit over time. In my not so humble opinion, our  government has not done a very good job of picking winners.  That is probably best left to the private sector which is a whole different posting, ha ha.    

    

Nathaniel Pearre's picture
Nathaniel Pearre on Sep 20, 2013 1:34 am GMT

Buying solar does not lock in fossil fuel dependence.  

You can argue that it locks in dependence on some dispatchable technology, which is, in the current market, likely to be largely fossil fuel, but that is absolutely not the same thing.  In a hydro-rich region for instance, solar could displace hydro during the day, making the hydro effectively act as storage.  

And while rapid and continuous fluctuations in fossil generator output will increase the carbon footprint per kWh of fossil generation, those fluctuations will (almost) never result in more carbon being emitted than if the generator had run at full power for the whole time.  And as more non-correlated solar resources are tied together, the degree and the rate of fluctuations required of other generation is reduced.

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