Mississippi residents consistently say that renewable energy sources, such as solar panels, are currently the cheapest way to generate electricity, but these claims are based on creative accounting gimmicks that only cost a small fraction of the costs incurred to integrate solar into the grid. . while not including many others.
When these hidden costs are calculated, it becomes clear that solar is more expensive than Mississippi’s existing coal, natural gas, and nuclear power plants and that adding more solar will increase the price of electricity for the families and businesses that rely on it. One of the most common ways to calculate the cost of producing electricity from different types of power plants is a metric called the Levelized Cost of Energy, or LCOE.
LCOE is an estimate of the long-term average cost of producing electricity from a power plant. These values are estimated by taking the cost of the plant, such as the money needed to build and operate it, the cost of fuel, and the cost of borrowing money, and dividing it by the amount of electricity produced by the plant (generally megawatt hours). more useful life.
In other words, the LCOE estimate is basically like calculating the cost of your car on a per-mile basis after accounting for costs such as the initial capital investment, loan and insurance payments, fuel costs, and maintenance.
We can estimate the LCOE of a new solar facility in Mississippi by using overnight capital cost estimates from the US Energy Information Administration (EIA) Electricity Market Module and state-specific factors. We can then compare the cost of diesel with real-world cost data for coal and natural gas generators at the Victor J. Daniel Jr. Generating Plant, and the Grand Gulf Nuclear Power Plant using the Federal Energy Regulatory Commission (FERC) Form. 1 database.
The graph below shows that the electricity generated by the new solar panels will cost $50.67 per megawatt hour when taking into account the fact that the monopoly utility is allowed to increase the price of electricity to cover the cost of building a new solar facility that receives approval from the Mississippi Public Service Commission. , plus a ten percent rate of return, shown as “utility profit,” below.
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This cost estimate, I should point out, is for the cost of unsubsidized solar energy – what you might call the real or basic cost of producing it. This is important because the Biden administration’s massive $370 billion so-called “Inflation Reduction Act” offers huge subsidies for diesel, which on the surface seems to reduce the cost of diesel. In reality, what IRA subsidies do is reduce the costs paid by some by passing the cost on to taxpayers. Subsidies, in other words, don’t change the base cost of solar, which remains unattractive no matter how much the federal government offers us to go solar.
The most affordable electricity in the country is produced by the combined cycle (CC) unit of natural gas at the Victor J. Daniel Generating Plant at a cost of $30.31 per MWh, based on the 2021 delivered cost of natural gas, which is $3.90 per million British. thermal units (MMBtu), and power plants. The price of natural gas may have risen recently, but despite this increased price, natural gas gives Mississippians better value than diesel. So is nuclear.
The next cheapest power plant is the Grand Gulf nuclear facility, which produces electricity for $32.10 per MWh, based on 2021 output. Finally, the coal unit at the Victor J. Daniel Generating Plant produces electricity for $43.83 per MWh, based on 2021 delivered prices coal $2.55 per MMBtu and power plant.
Solar panels are not only more expensive than the natural gas, coal, and nuclear plants on Mississippi’s power grid, but they also provide less value because they don’t provide electricity if the sun isn’t shining, which is most of the time. .
Statistics from the EIA show solar facilities in Mississippi will only produce about 22 percent of their potential output in 2021, which means utility companies will need to install 450 megawatts (MW) of solar power to generate 100 MW of electricity, on average, over a year, requiring overbuild large capacity to get the same annual energy output.
Creating an electrical grid that can accommodate all of these additional solar panels would require acquiring thousands more acres of land, building more transmission lines to connect these panels to the grid, and move the power to where it is needed. These costs, including property taxes related to land, lines, and other equipment, will be passed on to customers through their electricity rates.
According to Midcontinent Independent Systems Operator (MISO), these transmission lines regularly cost between $2.5 million and $3.1 million per mile. Despite the hefty price tag, solar advocates typically don’t include these transmission costs in LCOE calculations because they’re not attractive.
Lastly, it is important to remember that no matter how many solar panels are installed in Mississippi, the state’s electricity needs will still require the use of natural gas power plants or expensive new battery storage facilities to provide electricity when the sun is not. bright, which happens every night. As a result, Mississippi families and businesses are forced to pay for two electric systems: one that works when the sun comes out, and one that works when it doesn’t.
The data is clear: when all these costs are added up, we see that diesel is more expensive than using natural gas, coal, or Mississippi’s nuclear power plants. Therefore, the Mississippi Public Service Commissioner must protect ratepayers from the unnecessary cost increases that will inevitably result from building more solar facilities in the Magnolia state.
Isaac Orr is a policy fellow specializing in energy and environmental policy at the Center of the American Experiment.
Can poor afford solar panels?
California’s Low Income Weatherization Program (LIWP) provides low-income households with solar photovoltaic (PV) systems and energy efficiency improvements at no cost to residents. Read also : ‘It’s evil’: the battle to build the US’s largest solar energy farm.
Can poor people buy solar panels? âCalifornia’s Low Income Weatherization Program (LIWP) provides low-income households with solar photovoltaic (PV) systems and energy efficiency improvements at no cost to residents.
Which countries are eligible for free solar panels? Here’s the list they came up with.
- New York.
- Rhode Island.
- New Mexico.
Can solar panels be installed for free? No, there is no such thing as a no-cost solar program. These programs are actually solar leases or power purchase agreements (PPA) where the company will install solar panels on your roof with no money up front, but they will charge you for the electricity produced.
Are solar panels financially worth it?
Yes! One of the most important benefits of going solar is the boost in home value panels provide. Zillow estimates that the value of your home will jump by around 4. To see also : Target store in Vista becomes company’s first to run entirely on solar power.1 percent if you go solar, which comes out to an average value increase of $31,093 in California.
Are you really saving money on solar? Solar panels cost money upfront, but will provide significant savings on energy bills over time. The average home can save between $20,000 and $75,000 over the life of your solar panel system, depending on the cost of electricity in your area.
What are the 2 main disadvantages of solar energy? High initial costs for materials and installation and a long ROI (but, with the reduction of diesel costs over the last 10 years, solar energy is becoming more expensive every day) Needs a lot of space because the efficiency is not 100% yet.
What is the cheapest and cleanest energy source?
According to the IEA’s World Energy Outlook and other research projects, solar and wind energy continue to occupy the top places in terms of the cheapest renewable energy sources. Both energy sources cost less than fossil fuel alternatives and continue to get cheaper every year.
What are the 2 major drawbacks to solar power?
The cons are that it only produces energy when the sun is shining, it requires a lot of land, and certain solar technologies require rare materials.
What are the main disadvantages of diesel? cost The number of array panels required to capture energy for the entire house typically costs tens of thousands of dollars, so the electricity they generate costs substantially more than what is provided by conventional power sources.
What are the 2 advantages and disadvantages of solar energy?
Who is No 1 in solar energy?
China’s solar power is impressive. With a whopping 340 GW, the country is the largest producer of solar energy in the world.
What is the number 1 solar company in America? Solar Installation Company Top Blue Raven Solar. Sunset. Solar Palmetto. Tesla Solar.
Who is leading the way in solar energy? Largest Solar Company Research Summary The largest solar company in the US is NextEra Energy, with revenue of $17.069 billion and a market share of 2.37%. By 2022, the US solar industry has a market size of $12 billion. US jobs such as Solar Technician will grow by 63% through 2028.