Solar is Cheapest Energy in Some Part of World
In the last year, according to Naam, we’ve seen crossover in the solar power market. In the sunniest parts of the world, unsubsidized solar is becoming the cheapest form of energy.
In the US, natural gas is the cheapest energy at around five or six cents per kilowatt-hour (kWh). A deal in Palo Alto, California late last fall was signed for 3.6 cents per kWh (5.1 cents removing subsidies, according to Naam). A deal signed in India was less than the price of coal there. No subsidies. In Chile, solar bids won a dozen auctions, one of which was the lowest we had yet seen at 2.9 cents a kWh.
“Now, that was not just the cheapest price for solar ever assigned, that was the cheapest unsubsidized contract for electricity of any sort on planet Earth with any technology ever in history,” Naam says.
That record lasted for about a month, when a deal in Dubai was signed for 2.4 cents a kWh—less than half US natural gas prices and lower than natural gas in the Middle East or Africa.
“And it wasn’t just one company with an unusually aggressive bid,” Naam says. “There were four companies that came with bids of less than three cents in this auction.”