1. Solar just hit a stunning new record low price in the US. At these prices, solar kills coal and steals substantial share from Natural Gas. A brief thread.
2. New lowest solar contract price is below *2 cents / kwh*. Even after removing the 30% federal solar investment tax credit, we are looking at solar contracts at 2.6 - 3 cents / kwh. reneweconomy.com.au/warren-buffett…
3. At 2.6 cents / kwh, new solar in the SW of the US is
- One third the cost of building new coal.
- Half the cost of building new natural gas power.
- One third the cost of building new coal.
- Half the cost of building new natural gas power.
4. It gets better. Natural gas powerplants in the US have an average *operating cost* of around 3 cents / kwh. At these solar prices, natural gas plants will just sit idle during daylight hours, waiting for evening to kick in. As a result, their evening costs will be *higher*.
5. Evening gas prices will compete with the cost of stored power coming out of batteries. And that, too, will eat natural gas market share over time. More on that another day.
6. And don't even talk about coal. We already new solar was on track to get cheaper than operating *existing* coal plants. (See, for instance, vox.com/energy-and-env…) This is just another nail in the coffin.
7. To be clear, these are new record low prices (not average prices), in the very sunny southwest, and won't be producing power until 2021. Those caveats aside, what's clear is that coal is screwed, and natural gas will lose market share to solar in sunny areas. Future's bright.
