Solar Cheaper than Nukes

“When it’s cheaper.”  “When it’s cheaper.”  “When it’s cheaper.”

That’s a familiar and understandable refrain heard from people debating the best time to go ahead with solar power.  But cheaper than what?  Right now it would be cheaper than new nuclear, at least in North Carolina, according to a report co-authored and issued this month by the former chancellor of Duke University, Dr. John  Blackburn.

The Historic Crossover

The report, Solar and Nuclear Costs - The Historic Crossover, was commissioned by North Carolina Waste Awareness and Reduction Network (NC WARN) to highlight the changing economic underpinnings of both solar and nuclear power.  The report’s major finding was that electricity from new solar installations in North Carolina is now cheaper than the electricity that would come from proposed new nuclear plants there.  It also found that the continuing downward trend of solar prices will widen the price gap dramatically as time progresses.

Reasons for the falling cost of solar include manufacturing and installation advances, economies of scale, and increasingly enlightened tax treatment at both federal and state level in the last five years.  Over the same period, design problems and rising cost estimates have led to delays and cancellations of U.S. nuclear projects.  (The average increase in cost estimates for nine such projects is 140%, with some nearly quadrupling or quintupling their original figures).

It’s considered significant that these delays and cancellations have mostly occurred in states with open competition for electricity sales.  States with monopoly power markets - many in the south and southeast - are where utilities are still proposing new nuclear plants.

Who Pays for New Nuclear?

It’s also very telling that the nuclear industry in this country has been unable to raise private capital for new plants in decades, and is trying to shift the financial risk burden to the taxpayer through federal loans and loan guarantees, and to the electricity consumers through the addition of plant planning and financing charges to their electric rates.

While on the subject of tax credits and subsidies, we should make the point that the kilowatt-hour costs shown in the ‘crossover’ graph are all ‘net of subsidies’.  That is, the solar figures reflect the uncapped 30% federal investment tax credit and the 35% North Carolina personal tax credit, applied to solar industry data;  the nuclear figures come from an industry-standard study of price trends and projections, which includes billions of dollars of federal subsidies over the years.  Thus the graph transparently represents net prices to the consumer.

Solar Without Subsidies

When you consider that, within the decade, solar power is expected to be competitive with nuclear power without subsidies, you can understand why the nuclear industry is pushing so hard for more government help, so as to move that crossover point into the future.  But unlike solar, commercial nuclear power is a mature industry.  Even with generous subsidies through the last four decades, it has never lived up to its promise of “electricity too cheap to meter”.  And given that it’s getting more, not less, expensive with each passing year, you can also understand why new nuclear proposals are largely confined to those states with monopoly power markets.  Many states with competitive markets have looked into the near future and are developing their clean energy systems as rapidly as possible.

The line on the graph marked NUCLEAR may be pointing upward, but its prospects are headed the other way.