Energy is about to become absurdly cheap at least during daylight hours in sunny areas of the planet.
http://nanosolar.com is retailing panels (maybe a gigawatt a year) for $1 per watt. Their production cost is 30 cents per watt of panel capacity. Konarka claims 10 cents per watt production costs (confirmed here) and are expecting to begin mass production in a year or two.
So what does this mean in terms of electricity supply? Simply put, it means that in some applications, solar power’s real cost is about half that of a coal fired power plant today and it’s only going to get cheaper. We’re likely to see solar displace nearly all of the world’s coal plants within 20 years, cutting CO2 emissions by 40%.
Would you like to see the numbers?
Let’s look at the optimal case: direct drive solar panels being sold at the around the cost of manufacture. Direct drive simply means there are no batteries or chargers in the system: the devices being powered are directly connected to the solar panels, so there is very little waste an no additional system costs. This is the sort of setup you might see in a solar powered factory that only runs in daylight hours. The low profit margin is typical of commodity goods like paper or corn. A very large global solar market will tend to push prices down, but perhaps not this close to manufacturing cost. But it does tell us how much it really costs to do, so it’s a good place to start thinking about the numbers.
So how much will power cost in that configuration?
$0.30 per watt of panels means $300 for 1 kilowatt of panels.
20 years of panel life * 365 days per year * 8 hours a day of sun = 58400 hours of electricity generated by the panels over their service lifetime
cost per kilowatt per hour = $300 / 58400 = 0.51 cents per kilowatt hour
Right now, the cheapest coal power in America costs 4.63 cents per kilowatt hour. In this configuration, solar power is 1/8th of the cost of grid power from coal plants.
Now this is not an apples to apples comparison. Our notional power plant is sitting in the middle of a desert area directly driving machines which only need to run in daylight. There are no grid costs, staffing costs, costs-of-borrowing or other factors calculated in. We have not accounted for clouds. But even when you add those factors back in, the conclusion is the same: in real terms, even when you factor in all of those costs, solar power is likely to produce power at about half the cost of the cheapest coal-fired power plants.
The implication is clear: the global power economy is in the early stages of a shift as profound as the shift when gasoline began to be widely used. With new battery technology expected in the near future the issues around powering systems at night and handling spikes in demand my begin to be solved, resulting in a complete green power revolution.