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A less obvious competitor

Who is it?  The utilities of course.  Well not exactly the utilities, 
but the big generators.

  • Hoover Dam
  • Tennessee Valley Authority
  • Millstone Nuclear
  • Xcel Energy NRG
  • Florida Power & Light
  • the list goes on...

Yes, we have to consider them the competition.  But that doesn't mean we're casting Solar & Thermal as David to their Goliath.  No, they call the tune, we're just coming to the party to enjoy the festivities, and the hors d'oeuvres table.

Let's face it, these behemoths burn tons of fuel every second, every minute, every hour, every day.  They've had decades to fine tune their operations to squeeze every penny out of a BTU, but, as the resources they consume become scarce, they are forced to pay more, and pass that cost along to their customers; you and me.

So why are they competition?  Because their external costs have risen so much over the years, that the unit cost of their product is getting closer to the unit cost of our product.

In 2001, the spot price of a MWHr was about $50.  The peak demand price on contracts was occasionally as high as $100-$150, but we'll stick with $50.  That equated to $0.05 per kWHr for generation to most consumers of electricity.  When you added the distribution charges the price tag was about $0.10

Today in 2006 the spot price of a MWHr is above $70 (curiously and coincidently close to the price of a barrel of oil).  Tack on distribution, and other FERC charges for conservation, tax etc, and my bill is $0.162 per kWHr

Here's where it gets really interesting.  The basic STS system costs $2.00/Watt, and over the first 20 years of it's lifetime, produces some quantity of electricity ( say 23.25 kWHr/Watt ).  That lets us immediately compute the cost of the electricity that the system will produce for the next 20 years.  It comes out to $0.086 per kWHr or $86/MWHr in utility terms.

Yes, because of the increased cost of fuel over the past 5 years, the price of regular electricity has risen halfway to the cost of solar electricity.  And let's not forget that the cost of that solar electricity is fixed for the next 20 years.

Unfortunately, there is just no possible way that we can produce the volume of energy that the gorillas produce in the immediate future; we can reasonably conclude that we can find customers for all of our production for the foreseeable future.  If you came across a gas station that was still selling gas for $1.50 a gallon, wouldn't you fill up there?




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Updated: 09/11/10 21:05