Here Comes the Sun: Solar Power Parity With Fossil Fuels

Abstract:     
There is wide agreement across the political spectrum that the United States should develop domestic, renewable sources of energy. There are many ways to describe the challenges of a transition from a fossil fuel economy to one fueled by atoms, the sun, or the wind, but in a nutshell, the problem is said to be cost: the basic reason the United States continues overwhelmingly to rely on fossil fuels is that they are comparatively cheap, and alternative energy is relatively expensive.

Or so it seems. This Article is intended to encourage more open discussion about real energy costs. To keep the discussion short and focused, we concentrate on solar energy. We look at solar energy through the lens of some simple and conservative assumptions about the cost of one input — water, and the cost of one externality — carbon.

Our goal is to illustrate the kind of analysis that would move public discussion and policies towards “truer” energy cost assessments. The bottom line: fundamental shifts in energy sources from fossil fuels (or at least coal and oil) to large-scale commercial solar may be closer than suggested by headlines and widely held popular and political beliefs.

Number of Pages in PDF File: 35

Keywords: energy costs, solar power, renewable energy, regulated markets, energy policy

Accepted Paper Series