A very interesting and controversial study emerged recently, comparing nuclear and solar costs no less. The study focused on the costs of electricity in North Carolina (US), describes the solar photovoltaic (PV) business, summarizing its history of sharply declining prices, along with the very different path taken in recent years by nuclear power, whose costs have been steadily rising.
A very interesting and controversial study emerged recently, comparing nuclear and solar costs no less.
The study, "Solar and Nuclear Costs â€“ The Historic Crossover", was prepared by John O. Blackburn and Sam Cunningham for NC Warn, a climate change nonprofit watchdog. The paper, focused on the costs of electricity in North Carolina (US), describes the solar photovoltaic (PV) business, summarizing its history of sharply declining prices, along with the very different path taken in recent years by nuclear power, whose costs have been steadily rising.
The conclusion is that as of 2010, North Carolina is witnessing a historic crossover between the price of nuclear power and that of solar PV. The crossover is said to be happening at 0.16 $/kWh. It is important to note that these costs are calculated as net figures after subsidies. Where do the numbers come from? The study collected figures from local solar industry sources, to come up with a "capital cost" for solar PV electricity, and relied on a study on nuclear price trends by Mark Cooper's, "The Economics of Nuclear Reactors: Renaissance or Relapse?", for a comparison with nuclear power. The "net prices" are then obtained by deducting from those "capital costs" whatever forms of subsidies, rebates and tax credits are available in the US. This means the conclusions of such study are not about a Levelized Cost Of Electricity (LCOE) comparison, but rather about the final cost to consumers, given the existing incentives. A lot of discussion could be triggered by this method alone, as its results are heavily dependent on the local level of support to either technology. Nonetheless, there is much more interesting data from this paper than just its controversial conclusions. Capital costs of both sources of energy (before subsidies, a sort of levelized cost) are indeed discussed, but what is even more interesting (and as yet most unnoticed by the media) is the scale of the comparison. Weâ€™ll see why.
The figures shown for solar energy are explained in the report's appendix, and calculated for a very small 3kW (peak) PV system with the following parameters: $6,000/kW installed cost, 6% borrowing rate, 25-year amortization period, 18% capacity factor (meaning 1,560 kWh/kWp per year), and a 15% derating factor to account for system losses. From these values, a capital cost of 35Â¢/kWh results as the current electricity price of a residential PV installation. Then, by taking into account the 30% and 35% Federal and state tax credits (yielding a net system cost of $8,190 from the original $18.000), the authors calculate a net production cost of 15.9Â¢/kWh.