Utility-Scale Solar Power To Be Cost Competitive With Natural Gas By 2025

By William Pentland, Contributor. 12/3/13.  Utility-scale solar power is poised to become cost competitive with natural gas by 2025, according to a new report by Lux Research. The report, “Cheap Natural Gas: Fracturing Dreams of a Solar Future,” evaluated the levelized cost of energy (LCOE) for unsubsidized solar, natural gas, and hybrid solar/gas technologies through 2030 under a range of future natural gas price scenarios and across 10 different parts of the world. The bottom-up cost model assumed a 39% decrease in utility-scale system costs by 2030 and a delay in shale gas production due to anti-fracking policies in Europe and high capital costs in South America. The key take-away: the LCOE for unsubsidized utility-scale solar globally will be only about $0.02/kWh above the price of power produced by combined cycle gas turbines by 2025. “On the macroeconomic level, a ‘golden age of gas’ can be a bridge to a renewable future as gas will replace coal until solar becomes cost competitive without subsidies,” said Ed Cahill, an associate at New York City-based Lux Research and the lead author of the report. “On the micro-economic level, solar integrated with natural gas can lower costs and provide stable output.”
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