The owner of one of Australia’s dirtiest coal-fired power plants has argued that the cost of solar PV is unlikely to fall in future years, due to falling profitability of manufacturers.
In a submission to the federal government’s RET Review panel, the owner of Victoria’s Hazelwood brown coal generator, GDF Suez, says solar PV is unlikely to reduce costs because many panel manufacturers continue to lose money.
The prediction is at odds with estimates from the Bureau of Resource and Energy Economics’ most recent technology cost assessment, which show solar PV costs falling by more than half over the coming decades.
“Caution is required when using the stated learning curves, particularly in relation to PV technology,” GDF Suez says in its submission.
“PV manufacturers struggle to remain profitable (including China) and the current situation is unlikely to be sustainable. Sensitivity around the BREE learning curve for PVs should also be tested at much reduced, or perhaps static, learning curve.”
The BREE estimates, however, would be considered conservative by many analysts, who note that some PV systems are being built in the US at little more than $60/MWh, which would put the cost of the technology in 2014 within 5-10 per cent of BREE’s estimates for 2050.
Solar module manufacturers are still recording manufacturing cost reductions of around 20 per cent per year – a situation that has allowed them to record positive margins – in the teens – and will allow them to reduce prices in the future.
The cost of modules is also just one part of the equation. The so-called soft costs of solar PV – for associated materials like inverters, mounting, finance, installation and maintenance – are also likely to drop soon, to the point where PV is cheaper to install at utility level than coal-fired power stations.
© 2014 Solar Choice Pty Ltd