New Record Set for World's Cheapest Solar, Now Undercutting Coal (bloomberg.com)

Anna Hirtenstein, reporting for Bloomberg: Solar power set another record-low price as renewable energy developers working in the United Arab Emirates shrugged off financial turmoil in the industry to promise projects costs that undercut even coal-fired generators. Developers bid as little as 2.99 cents a kilowatt-hour to develop 800 megawatts of solar-power projects for the Dubai Electricity and Water Authority, the utility for the Persian Gulf emirate. That's 15 percent lower than the previous record set in Mexico last month, according to Bloomberg New Energy Finance. The lowest priced solar power has plunged almost 50 percent in the past year. Saudi Arabia's Acwa Power International set a record in January 2015 by offering to build a portion of the same Dubai solar park for power priced at 5.85 cents per kilowatt-hour. Records were subsequently set in Peru and Mexico before Dubai reclaimed its mantel as purveyor of the world's cheapest solar power. "This bid tells us that some bidders are willing to risk a lot for the prestige of being the cheapest solar developer," said Jenny Chase, head of solar analysis at BNEF. "Nobody knows how it's meant to work."

Comments

Re:Except at night.

[CoolCash]

It doesn't rain in Dubai. Also these solar plants generally use molten sodium to store the energy, which then use it to create steam to run generators.

"Nobody knows how it's meant to work."

[turkeydance]

somebody should trademark that.

loss-lead, loss-follow, or loss-get-out-of-the-way

[Pseudonymous Powers]

"This bid tells us that some bidders are willing to risk a lot for the prestige of being the cheapest solar developer," said Jenny Chase, head of solar analysis at BNEF. "Nobody knows how it's meant to work."

Well, I'm neither an economist nor an... electrician? But I have bought a lot of printers that I palmed off on the thrift store people after the original ink cartridge ran out, because it was cheaper to just buy a new one. So I'll take a shot.

The low bidders are selling their electricity for less than it costs to produce because, at some point in the future, they hope to charge a higher price for it, after all of their competitors have had to exit the industry, and, due to inertial effects, would find it difficult to re-enter.

No other industry does this, of course. Oh, wait, almost every other industry does this now.

power plants

[phantomfive]

Note that these prices are for solar power plants, not for household solar. Here's a comparison with prices for some other types of electricity generation.
Still solar plants have been popping up all over, and this will only encourage more of them, which is a good thing because coal pollution sucks.

Re:Except at night.

[danbob999]

Until we get more solar power than our day-time consumption your point is moot. Night/rain isn't a problem when 99% of your energy comes from fossils fuels which must be the case in UAE. They'll simply burn less coal/oil/gas when it's sunny. And on average, that means 3/kWh which is fantastic.

Re:Cloudy == 99% less energy. Eyes perceive expone

[mspohr]

My solar panels would beg to differ. Very cloudy days production goes down but I still get 25-50% of full sun days.