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First Solar Achieves Grid Parity! (depending on how you define grid parity…)

The holy grail of all renewable is to reach grid parity – the point at which buying green power is no more expensive (or even cheaper) than buying power from, say, a coal burning plant. And it seems that one solar power plant in a desert in Nevada – built by First Solar – has reached that momentous mark. At least according to one analyst named Mark Bachman.

What do I mean, “according to one analyst”? Well it all boils down to how you do your math and how you define “grid parity”. Traditionally, people (by which I mean investors) have defined it in terms of cost per watt, and it was also generally thought that if solar power plants could be built at a cost of $1 per watt or less, they would achieve grid parity. Thus, if First Solar had been able to build a 10 megawatt plant for 10 megadollars (that’s 10 million for any of you non-geeks out there), they would have achieved grid parity a la traditional definition.

The aforementioned analyst, however, chose to define grid parity as cost per kilowatt hour. Unlike a watt, which is a unit of visit our site generic cialis for sale power (energy per unit time), a kilowatt hour is a unit of energy itself. The question, then, is how much does it cost First Solar to deliver a kilowatt hour of electricity to a customer, and how much does it cost a coal plant to deliver that same kilowatt hour? The answer, said the analyst, is 7.5 cents/kwh for solar and 9 cents/kwh for coal.

Grid parity!

However, there are some important considerations to keep in mind.

First of all, let’s think about what we just did by changing the definition of grid parity. Instead of asking how much it costs to build a power plant, we’re asking how much it costs to sell electricity. Since the cost of electricity includes the cost of fuel, using the canada generic levitra cost of electricity rather than the cost of building plant as your index allows the advantages of solar (free fuel) to weigh in.

Which is totally legitimate. I mean, the whole reason people like us like solar is because the fuel is free (and virtually limitless)! But it begs the question – is First Solar really the only place that has achieved this new definition of grid parity, or are there others?

Also, Bachman made some more math assumptions. For example, he only considered the costs of the solar panels themselves, even though the installers also had to pay for frames and other mounting equipment. Also, to figure out the cost of the panels, he used the average cost of panels across First Solar’s various factories, rather than what it actually cost First Solar to build these panels. And, if we are to return to the original definition of grid parity for a moment, it cost First Solar $3.17 per watt – not quite the $1/watt we were waiting for.

[One other weird point – according to Greentech Media, the power plant we’re talking about is Sempra’s 12.6 MW plant in the Nevada desert. However, Sempra’s own press release says it is a 10 MW plant, which is more in accordance with what First Solar was reporting earlier this year. Unclear where the budget cialis 12.6 came from…]

So it seems that whether or not you believe First Solar has reached grid parity depends on whether you agree with Mark Bachman’s definition of grid parity – which is certainly plausible. You may disagree with him, but even if this isn’t the figure you’ve been waiting for it is hard to shake the feeling that the number – whatever number you are waiting for – is just around the bend.

Via Greentech Media

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Comments (25)Add Comment
come on
written by brian, December 23, 2008
Who can get excited over 10MW anyways?
What is that.. like *maybe* a thousand households?

If the profit proposition were worthwhile, you'd see GW plants coming in fast and steady.
This should be easy
written by Bucky, December 23, 2008
From an accounting perspective, this shouldn't be that difficult. Obviously, you need to include the cost of fuel in making comparisons between competing generation technologies.

It's pretty simple: amoritize the cost of the facility over it's projected useful life to get an annual cost of the generation facility. Add in fuel costs, maintenance, labor, and other annual expenses (labor must be much, much more expensive for a coal-fired plant). Divide by the yearly output of energy.

And there you have the buy viagra australia cost per unit.

Compare and contrast.

Naturally coal, which dominates the industry, doesn't want you to include fuel costs.
written by Craig, December 23, 2008
I agree with Bucky's comment. When you start changing the way you measure things it sounds like cooking the books and that's one thing we don't want to give the coal industry is a weapon to use against renewabls.
written by Scatter, December 23, 2008
I've never understood the point of costing generators per W. It's pretty meaningless in my view given that output is the key.

Bit of a fudge not including the non-module costs but no matter, things are definitely heading in the right direction. True parity can't be far away and cialis from india then....

Now if we can just move computers away from silicon ( ) just think what would happen to PV costs!
written by Patrick Dugan, December 23, 2008
"I've never understood the point of costing generators per W. It's pretty meaningless in my view given that output is the key."

It´s priced like that because it allows you to divide that cost by the average annual output, which is multiplied by the contractual rate per kWh, and get the annual return on investment. It´s pretty meaningful given that economics is the key.
Calculate the TRUE cost
written by Scott Baker, December 23, 2008
I think you're all missing the larger costs, which MUST be figured in somewhere. You need to include:
1. The cost in pollution - coal mining vs. solar "mining." I suppose you could argue that mining the sun does take solar energy from other uses, like - potentially - growing plants (in the desert?), but this is trivial compared to the enormous harm caused by mountaintop removal and water pollution from runoff caused by coal mining.
2. The cost of lost land. True, a solar field takes a lot of space, though a solar thermal field would take a lot less and be more energy efficient besides AND more productive overall, but in any case, this is space that is not used by people - in the desert, ideally - whereas there are a great number of people who object to the way land is "used" or abused by coal companies in Appalachia and the midwest.
3. What about air pollution? A little for solar installation during manufacturing. Much more for coal during mining and even more during burning.

The problem with all these calculations is that coal (or oil, NG) companies get a free ride when it comes to environment costs (and oil gets an even bigger free ride in terms of wars to garner access to oil in the middle east). And I didn't even add in the lost land for refineries for oil (yes, it is true that grid power is not the same as transportation fuel - I hear you - but we could make hydrogen with geothermal or solar power and still use wind turbines to replace ALL of our NG plants and devote that CNG to running cars, trucks and levitra online cheap buses too, which is at least cleaner and domestically available).

The answer to our screwed up system is to tax the resources of the world and to untax the profits. Even if we untaxed all profits (and wages too, while we're at it, since we want more productivity from laborers as well as capitalists), and fairly taxed the price of viagra in canada "land" (in the classic definition land means all the world's resources), there would be a VERY different answer as to which means of making power is more efficient and cheaper. We ARE paying the pollution cost for coal, just not on our energy bill; it is hidden in the EPA budget, or other mitigation measures we all pay for, even if its just by abandoning otherwise useful land.

P.S. Check out Henry George's "Progress and Poverty." These facts were all known by him from the late 19th century onward and by modern Georgists.
The big picture
written by hyperspaced, December 23, 2008
I think the big picture here is that we are getting there. Surely 10MW is not much, roughly 5,000 US households. But talking about parity in 2008 is amazing news. What is worth mentioning is that the technology of burning coal is the same for some time now and will not get more efficient.
On the other hand, photovoltaics have A LOT of room for improvement. More efficient and cheaper every year. Thin films from First Solar are on 10% efficiency now (there are implementations of 20% eff.)
I wouldn't be surprised if by the same day next year most economic analysts talk about true parity.

As Simple as Going to the Moon
written by Kirk, December 23, 2008
As soon as we decide what we want to do with the planet it is going to be that easy, Even easier from right now since we are so close. No eight or nine years later after a Presidential speech. That being said, Obama is the President who I think will do it.
deserts are important ecosystems!
written by stop killing our deserts, December 23, 2008
the ignorance about desert ecosystems is astounding. do you people really think that the only important ecosystems are covered in water? deserts are intentional ecosystems, not failed forests, and they clean groundwater, absorb HUGE amounts of carbon if left undisturbed, they balance our aqueous ecosystems, create wind, and provide critical information to biologists about how to most efficiently survive in heat and buy online prescription levitra drought. also, MILLIONS of people live in our deserts...

Big Solar permanently kills HUGE sections of this wilderness - CSP and PV - averaging roughly 10 acres or carbon sink dead for every MW of power. CSP also uses millions, if not billions of gallons of water every year (90,000 gallons per mw per year just for rinsing mirrors, and 2 MILLION gallons per mW per year for wet-cooling), and most CSP plants are largely gas-fired (dirty little secret).

compare to point of use, rooftop and building-integrated solar, and you start to see the REAL costs of Big Solar that are, like all Big Energy scams, being externalized onto the we recommend cheepest cialis planet (as though there is no cost to destroying wilderness and carbon sinks, killing plants and animals and depleting aquifers). if you want to support renewable power, please make sure it isn't based on an absolutely NON-renewable model, like decimating our open spaces. point of use and rooftop solutions are the ONLY green answer...
Re:deserts are important ecosystems!
written by Chuck, December 23, 2008
I absolutely agree with stop "killing our deserts" that the damage to the deserts are not often considered when talking about solar.

Something else is the change in albedo and possible micro-climate disruptions.

After all, the very purpose of a large solar array it to move energy that would have landed in the desert to a different location. As the arrays tend to be vast, I'd love to see the environmental impact statement that deals the the effects of viagra generic now cooling a large part of the desert.

It's not like the part that is put into shade is the only part affected. The areas for miles around will have their climate altered by some degree.

I still think that, with all their attendant problems, nukes make the most sense.

Cost per kWh is the only valid measure
written by Anders, December 23, 2008
I take issue with this article for several reasons. First of all, though $/W may be a handy shortcut, virtually any energy expert will measure grid parity by $/kWh, including fuel costs, financing costs, subsidies, and emissions allowances (already in effect for pollutants like SO2 and NOx, and for CO2 in some parts of the world, and often included as a proxy when financing new plants in the U.S.), transmission, backup power (if needed), land, taxes, insurance, construction, O&M, waste disposal, and every other cost. Second, grid parity depends on the wholesale electricity price in the region and for a particular consumer, not on the price of coal power. In some regions, solar has been at grid parity at the retail level for years, after subsidies. Wholesale grid parity is a more difficult hurdle, but by no means a huge challenge at today's solar prices in regions with a great deal of sun and buy levitra where a wholesale power price that is not based on coal (i.e. in California). Thus grid parity is a spectrum, rather than a threshold, which is what the $1/W figure seems to imply. Lastly, $/W is an especially poor metric for solar, since a $3/W panel generates half as much power output in Massachusetts versus California. Different technologies (such as FirstSolar CdTe panels) produce different levels of energy output in different lighting conditions (such as diffuse light versus direct-normal light) from standard c-Si panels, making the $/W number challenging even when comparing two panels in the same geographic location. I consider your language about dollars-per-Watt as the default or normal way of thinking about grid parity as basically wrong. It is a mental shortcut, nothing more.

This doesn't mean the analysis of FirstSolar's 10 MW plant by Mark Bachman was fully accurate in all respects. Eco-Geek identified some of his questionable assumptions: namely, using the cost per what averaged across FSLR manufacturing facilities, rather than the cost of building this facility. But basing his analysis on $/kWh was not far-fetched--any analysis that doesn't use $/kWh shouldn't be taken seriously.
written by Lorenz, December 23, 2008
Concentrated solar power will likely become the cheapest form of power generation in sunny, dry regions within the next 5 to 10 years.

It's going to leave a footprint, just like everything that man does, but that footprint will be minimal in comparison to most other actions, especially our current fossil fuel based actions.

One area where concentrated solar will likely kick in big time is with de-salination plants, where it will likely make ample water supplies affordable for many in arid regions who could not previously afford it.

Greater subsidies and low interest govt. loans should be given to individual and rooftop solar installations, as they will have virtually no footprint and create lots of middle class jobs.

Mandatory solar thermal rooftop water heating would, for example, likely have a greater effect on reducing energy and natural gas consumption throughout the entire southwest than anything else. It makes no sense whatsoever to heat water with anything other than solar from Miami to Houston, Austin to El Paso, Denver to Taos, Phoenix to Salt Lake City, San Diego to L.A.

"point of use and rooftop solutions are
written by Scatter, December 23, 2008
but they're never going to generate sufficient energy.

Something's gotta give. 6 billion people will have an impact somewhere. But if the viagra order pressure is spread across diverse renewable sources, we might just get through this ok.
Maybe I am not getting it at all...
written by net97surferx, December 24, 2008
'Big Business' wants to stay big... so they propose 'big projects' which can substitute for the existing big power generators... hence, making a ginormous solar 'field' to hook into the main power distribution grid -- allowing the 'big businesses' to control, meter, and charge for all this 'free energy'.

I keep wondering why we don't do 'solar & wind home units'. Instant power and removes the necessity of any distribution network/having to maintain hyper voltage power lines. If 'Big Business' still wants a 'cut', they charge a monthly fee which is used when the time comes to do maintanence and/or upgrades to the existing home systems.

If an entire block of homes had solar roofs.. especially in places like West Texas (where it's sunny and/or windy just about every day of the year... ) -- no fancy mega arrays would be needed.... nor having to judge the impact on the desert eco system from covering/obscuring those hundreds of acres due to array farms.

written by Nick, December 24, 2008
Well, the fairest way to judge costs is to see what the cost is after the it's great! free viagra equipment is funded by the bank. I'm pretty sure it will be related to $/total kWHr produced per year. You are funding a useful output - electrical energy, not electrical voltage or instantaneous power - i.e. they track the sun for more output. And then to compare the operating cost a coal plant needs to charge to make money, versus the cost the solar plant needs to charge.

To some extent the market calculations work as is. Government subsidies factor into this as well, but I'll let the bankers reflect on that. My beef would be to put a social/environmental tax on mined carbon and let the financiers factor that into their equations, tilting the no prescription tramadol sale equation more than slightly.
$3/installed Watt - an improvement due to efficiencies of large scales compared to the $9/installed Watt I was quoted for my house. I was offered a 15 year payback period as well.

What is the expected payback period for this solar installation versus buying power from the utility? This becomes the bottom line number people will think about.
Impact to desert ecosystem ?
written by TomP, December 24, 2008
"deserts are important ecosystems!" raises some interesting points, but can someone verify these claims ? I googled and found a real study worried about this problem. if any.

> [deserts] absorb HUGE amounts of carbon if left
> undisturbed,

How does that work ? What is the mechanism and generic viagra in canada numbers for that ?

> provide critical information to biologists
> about how to most efficiently survive in
> heat and drought.

Biologists are marginalized by big solar ? How much desert do these biologist need for their study ?

> also, MILLIONS of people live in our deserts.

If I was there I wouldn't mind some shade.

Anyway, these bold assertions really should have some bold evidence. Educate me w/real facts, this is an interesting issue.

$/kWh is the only usefull measure
written by camarco, December 25, 2008
I worked at a power utility, analysing options for new power plants and $/kWh is indead the only grid parity used by energy professionals and investors.
written by Pat G, December 29, 2008
When calculating grid parity, Bucky properly mentioned the useful life of the generator. What is the expected life of the PV panels? Better ask each manufacturer before we make sweeping assumptions about payback and grid parity.
Also, if coal paid for the health damage they do, all renewables would be at grid parity.
Startup cost
written by CBDunkerson, December 30, 2008
The $1/W comes in because the primary complaint about solar power has always been the startup cost. Once you've got it all installed the $0 'fuel' costs for sunlight obviously beat oil, natural gas, and even coal hands down. That said, solar panels do break and/or require maintenance so there are SOME operating costs. The question is how many years of solar's lower operating costs does it take to make up for it's higher startup cost? Corporations like to look at 'return on investment'... essentially, money earned as a percentage of money paid in. For solar power that's still a NEGATIVE number for alot of years... and that's what is keeping the industry from taking off. Big corporations want to get their money back FAST.

What Bachman's analysis tells us is that solar is now cheaper in the long run (that seems safe to say even with his other assumptions). However, the big firms on Wall Street don't want to tie their money up for ten or twenty years for the betterment of mankind... if they put that money into coal (or other vehicles) they'd get more money back sooner and could then reinvest and possibly (barring a crash in some significant element of their portfolio) do better than sticking with solar for the long haul.

IF solar startup costs come down in line with other methods of power generation (apparently $1/watt) then the buy tramadol 30 day credit big investors would be all over it... because the same investment yields higher immediate AND long term returns. Until then solar is going to be funded primarily by smaller startups who are ok with the lower initial returns on investment.

So don't dismiss the $1/watt 'parity' figure out of hand. The fact that solar now (per Bachman) costs us consumers less to buy than other forms of power isn't enough. Unless it also returns a better up front investment the startup money is still gonna go elsewhere.
Are You Really Serious Or What?
written by MAXX, December 30, 2008
'Your Quote'-

"Big Solar Permanently Kills HUGE Sections Of This Wilderness". THe Desert!!!!!?????

What do you really want????? Really????? Just go ahead and say it!!!!! You want the human world to Die Out!!!!! Really, just say it and be done with it!!!!! It will make you feel much better if you tell the truth, really!!!!!

Have any 'Carbon Credits' You Want To Sell?????


written by Richard Davine, December 30, 2008
Domestic point of use power generation, coupled with efficient appliances can satisfy domestic demands. Better insulation, solar water heating etc is whole system design and cheap viagra canada exists in plenty of houses built by Hippies.
The shift from the iron age to the polymer age shall change power demand from super heating steel to room temperature reactions.
Why try to power 1950's devices and lifestyles?
Using nuclear technology to power an electric age, is inviting terrorists or governments to play with a growing amount of enriched Uranium and Plutonium. No thanks.
capital costs and use of water
written by Nicola Terry, December 31, 2008
The trouble with calculating the cost of capital intensive installations like solar power is that it is closely tied to interest rates. Lower interest rates should favour projects like this and most other renewable energy initiatives. A silver lining perhaps?

Anyway, I must confess I had not considered the use of water for cooling in a desert environment. That could be a big environmental hit. Where do those figures come from? 20 million gallons a year is a lot of water: works out at about 1700 people's personal usage of 150 litres/day/person. Is none of this recyclable?

What we really need is a nice sunny spot beside the sea where there is plenty of cooling water available.
written by Beth, January 06, 2009
12.6 MW DC translates to 10 MW AC.
how do you "waste" water?
written by jjsummers, January 08, 2009
How is it that the water used to clean solar panels in the desert is "wasted"? Are you saying that using water actually "destroys" the water? Or in other words, when water is used in a process or by industry or by people, it actaully disappears, never to be seen again, and is thus "wasted"? Water that is used, is just that: "used". And is reused again and again and again billions of times. Water does not get "wasted" when it is used. It merely gets "used" when we use it.
If you are saying that the water used to clean solar panels in the desert could be "used" more efficiently in some other manner to create enery, then lets hear it.
Pay back period is measurement for grid
written by Chandanmal Jain, January 25, 2009
Compaire the payback periods of coal and solar, i think this is the measurement of grid parity.

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