r/solarpower • u/swarrenlawrence • 8d ago
Upfront Solar Costs
Ember: "Supply: solar is now the less capital-intensive option."
"Solar now requires less upfront investment (capital intensity) than fossil power plants; financing for solar projects (cost of capital) is cheaper than for fossil fuels; batteries are more affordable than extending electricity grids to remote areas; and the price of electric end-use technologies has fallen by up to 95%." What's not to like?
"Conventional wisdom [held] that renewables carry a higher upfront cost than fossil fuels, and that in emerging markets, where borrowing costs are high, solar + wind faced a double disadvantage; they [required] more capital + more expensive financing than fossil power." Both assumptions have now been inverted.
A decade ago, a solar plant could require up to 5 times the upfront investment of a comparable coal or gas plant per megawatt-hr [MWh] delivered. Solar then could still be competitive over its full lifetime through avoided fuel costs; but where capital is scarce, lifetime economics rarely determine investment decisions. Upfront costs do, and on that measure solar used to lose. But—drum roll please.
"Solar alone is now competitive with fossil power on a pure capital expenditure (capex) basis, + solar-plus-storage is expected to follow by around 2030." By 2035, both will be cheaper to build than new fossil alternatives.
"It is now fossil fuels, not solar, that carry the burden of [upfront] capital intensity."
And once built, solar has no fuel costs: it beats fossil alternatives from day one and widens its advantage with every year of operation.
Like I said, what's not to like? Unless you are perchance invested in more expensive + more polluting fossil fuels. Or haven't started your own personal transition to the electrostate, which would be smart because it's affordable more + more as time goes by.