Stories
Slash Boxes
Comments

SoylentNews is people

posted by martyb on Thursday October 11 2018, @11:59AM   Printer-friendly
from the Betteridge-says-"No" dept.

Arthur T Knackerbracket has found the following story:

In recent years, massive solar projects proposed for the Middle East have grabbed headlines with extremely low prices. Developers have announced agreements to sell their solar energy for as low as 2.34¢ per kilowatt-hour (kWh)—lower than the US' lowest prices and much lower than the average 6¢ per kilowatt-hour that the US lauded last September.

What they learned was that the numbers posted in four of the most recent Middle East solar projects were likely real, with some reasonable help from favorable government policies. Still, the numbers seem real for the region; not all cost reductions are likely to transfer to other parts of the world.

[...] The researchers primarily looked at four solar installations and their accompanying Power Purchase Agreements (PPAs). While most solar developers might not disclose what it actually costs to buy, install, and connect a solar energy plant, the PPA can be used to reverse-engineer what the costs to install a project are—in some cases. If there are significant hidden subsidies or the developer doesn't care that a PPA price is below cost, then the PPA doesn't tell us a lot.

Two of the four solar installations that the researchers looked at are located at Mohammed Bin Rashid al Maktoum Solar Park (MBR Solar Park). Phase II of the MBR Solar Park is a 200MW installation that was announced in 2015 and secured a PPA for 5.84¢ per kWh. Phase III, announced in June 2017, will add another 800MW to the park and will sell its electricity for 2.99¢ per kWh. Additionally, a May 2017 project in Abu Dhabi called Sweihan will build out 1,177MW and sell that electricity for 2.94¢ per kWh. Finally, Sakaka solar park in Northern Saudi Arabia was announced in March 2018 with a PPA price of 2.34¢ per kWh.

The researchers' paper, published this week in Nature, shows that five things caused these low prices. First, the cost of solar panels has obviously been tumbling, especially after the Chinese government recently cancelled a subsidy program for solar panels in that country, causing demand in China to drop.

The cost of labor is another factor. "With local contractors assuming most construction duties, and reported wages for construction work and even some skilled trades reported as less than US $5 by local sources, we believe that a reduction in labor costs of 50 percent relative to the US benchmark is a reasonable and perhaps even a conservative estimate," the researchers write. That's not necessarily something other countries should want to replicate: well-paying construction jobs are part and parcel of the benefit of solar energy.

The other three factors that lead to extremely low solar prices in the Middle East are easy financing on low interest rates, low taxes, and "low, but positive, profit margins," the researchers write. None of those factors are guaranteed for solar projects in other parts of the world, but creating an environment where all three exist is not a possibility exclusive to the Middle East.

-- submitted from IRC


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 2) by bob_super on Thursday October 11 2018, @04:56PM (1 child)

    by bob_super (1357) on Thursday October 11 2018, @04:56PM (#747510)

    > the cost of solar panels has obviously been tumbling, especially after the Chinese government recently cancelled
    > a subsidy program for solar panels in that country, causing demand in China to drop

    Yay ! Cheap panels for every roof !

    > The cost of labor is another factor

    Oh ... Right. The installer's margin is 3/4 of the price around here. We should import roof sections with pre-installed panels... (patent pending)

    Starting Score:    1  point
    Karma-Bonus Modifier   +1  

    Total Score:   2  
  • (Score: 0) by Anonymous Coward on Thursday October 11 2018, @07:12PM

    by Anonymous Coward on Thursday October 11 2018, @07:12PM (#747587)

    Topologically, solar panels look like drywall. Maybe they can modify that drywall-hanging robot to do the installs and cut that labor margin down to 1/2 (that other half is for administrative overhead, of course).