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Cost per KWh of Photovoltaic Solar Energy

by Yves Maigne, Extract reproduced from Biosphere, France No 1 - April 1990

The photovoltaic effect which was discovered in the mid 19th century is the property certain semi-conductors possess of converting light directly into electricity. Long a laboratory curiosity, the technique was launched with the first satellites. It was their source of energy.

Since the end of the 70s, with prices dropping regularly by 15% to 20% per year, it has come to be used generally for supplying current to remote telecommunications and water pumping stations and for refrigerators in rural clinics. Photovoltaic electricity came to be used to satisfy special needs of developing countries.

At the end of the 70s the oil crises and short term predictions of poverty led to a tremendous interest in the prospects of solar energy. This worldwide fascination led to numerous industrial investments which accumulated the means of production and sales prematurely. These investments were made on the basis of research which was often incomplete and sometimes dangerous.

The numerous failures resulting from these investments gave rise to a feeling of disenchantment in inverse proportion to the initial optimism. The marked interest of almost all the over-rich oil companies did not last. The latest example is the withdrawal of Atlantic Richfield, a shareholder in Arco Solar, the world's leading solar energy company. Amoco is the only one still deeply involved through its subsidiary, Solarex. However, with the market expanding at the rate of 15% to 20% a year, two factors come into play in creating openings for photovoltaics. The first is the political pressure of the ecologists, particularly in West Germany and Switzerland. The second is the desire to demonstrate that there are precise, alternative, foreseeable solutions to the problems posed by centralised generation of electricity in general and nuclear plants in particular.

Cost per KWh

In constant francs one photovoltaic kWh is now one fifteenth the price it was in 1973. It varies between 7 and 20 FF in spite of the reduced production cost of modules, due in part to the replacement of the 0.5 mm cell by a 0.15 mm cell. As a general rule it cannot compete with the price per kWh on the national grid. However, if consumption does not exceed 3 to 4 MWh per year, it can be cheaper. The We cost of a solar system is about 80 to 100 FF, (tax not included) the module part being only one third. It should be mentioned that expected reductions will be slowed down by regular rises in the cost of the other components: aluminium, glass, battery etc. This factor will act against low yield technologies. Given price predictions for 1995, a photovoltaic kWh could cost less than 1.5 FF. This is more expensive than a nuclear kWh but cheaper than some diesel or even gas turbine stations. We cannot rule out the possibility that costs may modify the present perception of electricity producers and numerous installations have already shown the interest and profitability of photovoltaics. Generators of 50 to 70 kWc have been set up in Pakistan and Nepal to supply mountain villages.