Solar photovoltaic system costs have fallen steadily for decades. They are projected to fall even farther over the next 10 years.
Meanwhile, projected costs for construction of new nuclear plants have risen steadily over the last decade, and they continue to rise, said a report on behalf of NC Warn Waste Awareness & Reduction Network.
NC Warn is a North Carolina-based nonprofit watch dog tackling the accelerating crisis posed by climate change, which uses scientific research to inform and involve the public in key decisions regarding their well-being.
In the past year, the lines have crossed in North Carolina.
Electricity from new solar installations is now cheaper than electricity from proposed new nuclear plants, said the report.
This new development has profound implications for North Carolina’s energy and economic future.
Each and every stakeholder in North Carolina’s energy sector — citizens, elected officials, solar power installers and manufacturers, and electric utilities — should recognize this watershed moment, said the report.
The paper states that commercial-scale solar developers in North Carolina are already offering utilities electricity at 14 cents or less per kilowatt hour.
Meanwhile, Duke Energy and Progress Energy are pushing ahead with plans for local nuclear plants that, at current estimates, would generate electricity at the higher rate of 14 to 18 cents per kilowatt-hour.
The “crossover” is largely thanks to a marked decline in the costs of solar photovoltaic (PV) systems seen over the past decade.
The study cites figures from the Lawrence Berkeley National Laboratory indicating that the cost of solar PV fell from US$12 per installed watt in 1998 to US$8 in 2008, on average – a one third drop in 10 years.
In 2008 and 2009, costs fell even more rapidly, bringing the 12-year fall to 50%. Meanwhile, the expense of nuclear has ballooned.
The estimated cost of construction in the United States at the start of the nuclear renaissance was around $2bn per reactor.
It now stands at close to $10bn.
The Duke University research has only focused on North Carolina where the 14 cents figure is net of public subsidies.
It is also specific to the North Carolinian regulatory context, according to a chinadialogue.com report, where like in other US states tax benefits and incentive payments for solar electricity can help lower costs to customers.
But the authors argue that solar is expected to be cost-competitive without subsidies within the decade.
In a China Dialogue report, Jeremy Leggett, the founder of the UK’s largest solar company, SolarCentury, said that even cloudy Britain “will reach residential grid parity between solar and fossil-fuel power within five years.”
“When you begin seeing solar production on this level, it starts making a significant difference,” said Antony Froggatt, senior research fellow in the energy, environment and development program at UK think-tank Chatham House, in the news reports.
It’s no longer a niche thing,” he said.
“It’s very clear that the learning curve for solar is very fast. We are seeing very, very rapid production and economy of scale is clearly crucial.”
Blackburn and his co-author, Sam Cunningham, argue that the strengthening renewables sector, combined with the perceived financial risks of new nuclear, is influencing investor behaviour: “Very few other states [American states other than North Carolina] are still seriously considering new nuclear plants.
“Some have canceled projects, citing continually rising costs with little sign of progress toward commencing construction.
“Many states with competitive electricity markets are developing their clean energy systems as rapidly as possible.”
Some experts are not convinced that renewable power is yet in a position to squeeze out new nuclear, however.
Froggatt points out that, in the United States, it is gas, not renewables, that is posing the biggest threat to the nuclear industry.
“Shale oil gas has totally changed the market in the US and brought down the price of gas significantly,” he said.
“How that pans out over the next few years and whether it’s a permanent fixture or temporary is probably the key issue for nuclear because that’s the main competitor.”
“Will falling prices speed up the development and installation of solar in China? Development, absolutely, because lots of the world’s solar is made in China. But I’m not sure it’s going to change nuclear ordering in the next 10 years,” said Froggatt.
The Duke University study rejects the argument that solar cannot replace baseload power from nuclear or coal because of its intermittent nature as “obsolete”, stating that it becomes a “manageable issue” when solar-generated electricity feeds into a power grid with wind, hydroelectric, biomass and natural-gas generation.
“You have to think about the role of both types of generation in the overall supply and demand balance,” said Simon Harrison, energy director at global engineering consultant Mott MacDonald.
“Solar is a technology that is essentially available when the sun is out, while nuclear is there 24 hours a day,” he said.
Before we can even contemplate moving into a world where solar replaces nuclear, a lot of things have to happen – around storage, around smart grids and so on,” said MacDonald.