Should Solar Photovoltaics be Deployed Sooner Because of Long Operating Life at Low, Predictable Cost?

Energy Policy

Author:  Zweibel, Ken

Organization:  GW Solar Institute

Report Date: 2010



The research investigates how long-lasting solar PV systems with predictable, low operating costs impacts decisions on solar system deployment. It evaluates whether project lifetime calls for policies to deploy more PV solar sooner.

Key Take-Aways: 

  • A traditional private sector discount rate of 6% or more removes the advantage of PV, even in cases over the full 100 years with very high fuel inflation rates such.
  • The private sector cannot be expected to invest in PV until the technology meets expectations for quicker returns. That will not happen until PV is cheaper than alternatives in the first 20 years, because those are the years that are not discounted as heavily.
  • An accelerated deployment plan for solar energy should focus on the Southwest, where there are many viable sites for PV solar at the current PV prices. Focusing on this region would allow for accelerated cost reduction through added market, and would bring down PV prices in total. PV should be given more access to the best sites and associated transmission.
  • Further studies should be done of all non-fuel options based on the low-discount rate, long-operating life framework. They should include transmission, loan rates that vary by technology, estimated life-cycle externalities (e.g., nuclear issues, international tensions), and more traditional project economics.

Key Facts: 

  • If designed for long life, PV systems could last for 100 years, still operating at between 50% and 80% of their initial output in the 100th year. The operating costs for such systems would be minimal, about one cent per kWh.
  • Assuming a 0% discount rate, the levelized cost of energy for solar PV systems were found to become as cheap, or cheaper, than the levelized cost of energy for systems that depend on fuel, despite zero fuel inflation, falling to $0.08/kWh in operating year 43.
  • Assuming a 0% discount rate, and a 3% fuel inflation rate, the levelized cost of solar PV systems are found to be cheaper than the levelized cost of most systems that depend on fuel, falling below $0.09/kWh in operating year 52.

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