I have a difficult time believing that suddenly, as if overnight, solar is able to compete with coal, even if you take into account the subsidizing of coal/oil/NG vs. solar.
The question is, how much of this deal is government subsidy? If Macho Springs was not subsidized, how much would they have to sell the power for?
If they are heavily subsidized, the cost of that power is much higher than advertised, and the tax payer is picking up the difference, either via higher taxes, or through inflation (caused by government debt or QE), which is a tax on those who can least afford to be taxed: the poor.
The post seems to compare the price of this wholesale deal to the retail price of coal-generated electricity. The post also seems to assume that the price is indicative of the cost of production.
The price of wholesale electricity in the Southwest is typically around $40/MWh, this is priced at $60/MWh. That's still less than prices in some other parts of the country, wholesale prices in the NE can be $100+ /MWh in winter months and it's an impressive technical achievement to get to even 150% of coal price parity, but all the same it's not actually cheaper.
You will see people comment that the problem with solar is that you only have a 25 per cent capacity factor. And as a former utility guy, my response to that is when you have a demand curve that looks like a sine wave, something in the system has to have a capacity factor of 25 per cent. You don’t have square blocks of usage. So the question is not whether you have a 25 per cent capacity factor, it’s who can deliver the most cost-effective energy at a 25 per cent capacity factor. And when you look at it on that basis, even at relatively low natural gas prices we are competitive in peak portion of the curve.
The question is, how much of this deal is government subsidy? If Macho Springs was not subsidized, how much would they have to sell the power for?
If they are heavily subsidized, the cost of that power is much higher than advertised, and the tax payer is picking up the difference, either via higher taxes, or through inflation (caused by government debt or QE), which is a tax on those who can least afford to be taxed: the poor.