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."
In the meantime, solar power capacity continues to see strong growth. In October, solar power projects led new electric generation capacity installed in the United States, according to the Federal Energy Regulatory Commission's October 2013 Energy Infrastructure Update. An impressive 504 megawatts of solar power capacity came online in October, out of 699 megawatts of total new capacity for the month.
