Just to follow up from a discussion on friday…

The article notes that the 2009 average cost in the US is 6.1 to 18.1 cents per kilowatt hour.  It was on this basis that they say that IF power gets down to 15 c per kwh it would be competitive.

What about the cost of electricity in Australia?

Well, according to wikipedia, which may not be accurate but I have no reason to doubt it, its 3-5 cents per kwh.

So whilst solar will become cost competitive with coal in the more expensive parts of the US, in five years, possibly, its going to be quite a while before it competes with either the cheaper parts of the US or most of Australia.

Don’t get me wrong – I’m a big believer in renewable power as being the only long term plan that looks viable – but it will only happen with either:

a. Major government initiatives (eg., subsidies & taxes)

b. Major rises in the cost of extracting coal

If we wait for option b, then the economy is going to be in a bad way by the time it happens.

Michael