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Published on May 21st, 2013 | by Ronald Brakels

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UK Solar Costs Pounded – Largest Solar Farm One Pound Or $1.59 Per Watt

May 21st, 2013 by  


Wymeswold Solar Farm. Image Credit: LarkEnergy

Wymeswold Solar Farm.
Image Credit: LarkEnergy

Seventy years ago during World War II the Wymeswold airfield in Britain was used to help protect the free world from barbarism of a kind unseen in Europe since the middle ages and of a scale unprecedented in history. Never before was so much owed by so many to so few. And today, when we have the ability to damage our world’s environment on a scale never before seen, the old airbase is being used in the struggle to protect us all from the effects of destabilising climate change.

The site near Leicestershire in the English Midlands is now the location of Britain’s largest solar farm. The facility is 34 megawatts in size and will prevent the emission of approximately 170,000 tonnes of CO2 over its lifespan, which is equivalent to shovelling about 58,000 tonnes of coal back into the ground. An exercise that would no doubt make you wonder why you had bothered to take it out of the ground in the first place.

The solar farm cost just over one pound a watt or $54 million. That’s in either Australian or US dollars as they currently both convert into exactly the same number of British pounds. (No doubt a fun day for currency traders.) This gives a cost of $1.59 a watt and according to a report commissioned last year by the British Government’s Department of Energy and Climate Change, it is 20% less than their figure for large scale solar in 2012. The report also investigated three different scenarios; slow, expected, and rapid decline in solar power costs. The rapid decline scenario had an estimate of $1.60 a watt for this year, so Wymeswold solar farm is definitely on the fast track and indicates that costs are falling in an expeditious manner.

While the price per watt is impressively low, the amount of sunshine in the damp Midlands is also very low and on average a solar panel will only receive the equivalent of 2.84 hours of direct sunshine a day. But even under these dreary conditions solar can produce electricity at low cost. If a 5% discount rate is used for the cost of money, a yearly figure of 1% of the capital cost for operations and maintenance, and with an expected lifespan of 36 years, the solar farm will produce electricity for about 11 cents a kilowatt-hour. If the solar farm was located in a sunnier part of England, say Plymouth in the south, it would produce electricity for around 9.5 cents a kilowatt-hour.

Now you might very well say to me, “Mr Author, I spend 15 minutes every second Tuesday memorising the wholesale electricity prices of the world’s nations and so I can confidently state without fear of refutation that the average wholesale electricity price in the UK in 2012 was 7 cents a kilowatt-hour. In light of this, how can you say that 11 cents or even 9.5 cents is cheap?”

That’s a very good question and I’d like to answer it in three ways:

Firstly, overall the British people give a damn about preserving a stable environment for themselves and future generations. They accept the scientific evidence on climate change and are brave enough not to act like frightened children and not retreat into an imaginary world and pretend that things they don’t believe in cannot harm them. If they have to pay a few cents more to protect the world’s damaged environment they will regard it as a small price to pay.

Secondly, the price of solar electricity has dropped dramatically from what it was. Over the past few years fossil fuel companies have gone from scoffing at it to begging governments to protect them from the big mean solar panels. Further falls in price will come and if solar is put on people’s rooftops for $1.59 a watt it will out compete grid electricity from any source in England and in sunnier countries it can produce electricity at below the wholesale price.

And thirdly, solar electricity is cheap compared to some of the competition. The construction of a new nuclear plant in the UK will apparently not proceed without a guaranteed minimum price of 15 cents a kilowatt-hour.

One interesting thing about Britain’s largest solar farm is the speed with which it was constructed. It was built in less than eight weeks. In comparison, if the UK’s new nuclear plant goes ahead it is not expected to start producing electricity until the early 2020s. Another interesting fact about the Wymeswold solar farm is, despite its name, it has absolutely nothing to do with Hogwarts school of Witchcraft and Wizardry.

Solar farms do have competitors other than nuclear in Britain and the main one is rooftop solar, which is currently more expensive to install but has the advantage of competing with retail rather than wholesale electricity prices. It remains to be seen if one or the other will come to dominate in the future or if they will live together in perfect harmony like the melted cheese and biscuit crumbs on my keyboard. (I really should stop eating while rehearsing but Brahms just makes me so hungry.)

One thing is clear, solar power, whether large scale or on people’s roofs, has a bright future ahead of it. In the Australian Territory capital of Darwin, $1.59 a watt solar would produce electricity at two thirds the current wholesale price and it would equal or beat the wholesale price in many of the world’s sunnier cities. But despite this, you may say to me, “Mr Author, why should we bother with solar power when coal is so cheap and clean and good for the environment and global warming is a hoax started by Svante Arrhenius in 1896 to allow future scientists to get more grant money?”

That’s a very interesting question and I’d like to answer it in two ways. First in normal type, and secondly in italics:

You, sir or madame, are nuttier than a lumpy chocolate bar.

You, sir or madame, are nuttier than a lumpy chocolate bar.






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About the Author

lives in Adelaide, South Australia. Now that his secret identity has been revealed he is free to admit he first became interested in renewable energy after environmental mismanagement destroyed his home planet of Krypton. He is keenly interested in solar energy and at completely random intervals will start talking to himself about, "The vast power of earth's yellow sun."



  • P A Khan

    2.65 Million USD per mega watt..correct.

  • P A Khan

    Thanks.. Bob. will do as suggested. Financing at Libor Plus a spread of 4.75% for the 10 Mws project.

    • Bob_Wallace

      I’m not very knowledgeable about Libor. It looks like it is 4.96% this week?

      That would make the rate around 9.7% and explain part of the higher cost.

  • P A Khan

    Bob,I wish to send u a petition filed by a company for tariff determination to the regulatory authority in Pakistan called NEPRA. It is a 10 Mw solar plant. in fact they have asked for 21.5 cents.Any idea how should I send it to you? I know the Capex has been padded up.US $ 2.65 per MW installed.

    • Bob_Wallace

      You can send it to me at bobpublic@gmx.com but I’m not sure I can tell you anything about it.

      Here’s what you can do – calculate the LCOE (levelized cost of electricity) for yourself. Use this page – http://www.nrel.gov/analysis/tech_lcoe.html

      Perhaps the financing is specified in the information you have. Put the interest rate and term in the two boxes for Financial.

      I assume you mean $2.65/W, not MW. If so, that would make Capital Cost ($/kW) 2650.

      Capacity Factor (%) would be 22.9. (5.5 hours/24 hours = 22.9)

      When I’m using the calculator I just enter 0 the next four boxes. Then I add one cent back on to the final cost. One cent/kWh is what the EIA uses for PV solar O&M.

      When I use those numbers I get 9.8 cents plus 1c for O&M or 10.8c/kWh.

      Now there are additional costs not included in a LCOE calculation. There’s real estate cost, transmission costs and some profit for the solar project owner.

      It’s hard for me to see how one would get from 10.8c to 21.5c under normal circumstances. Perhaps you can see what other costs they might be adding in. Even jacking the financing costs up to 10% brings the LCOE to only 16.5c/kWh. Is financing expensive?

      The calculator has another handy feature. You can put in today’s cost of electricity and what you guess the inflation rate will be over the number of years you set at the top. Then you’ll get what the average cost of electricity will be over the 20/how ever many years.

  • P A Khan

    36 years? Most concessions and PPAs with are for 25 years only. So what would be the IRR for a project life of 25 years. An additional point is the 1% O&M costs. seems rather low considering the change of Inverters at least 7 years and at the best 10 years.
    We are going for a technology demonstrator of 15 Mws initially and ramping it up to 200 MWs over the next five years. Expect to get 17 cents/KWH. Average 5.5 hrs of sunshine per day in the Rawalpindi/Islamabad region of Pakistan.
    Your comments please.

    • Bob_Wallace

      Seven to ten years for an inverter?

      End-user inverters have 20 year or longer expected lifetimes.

      36 years for system life is not at all out of line. Even at 36 years the only reason to replace the panels would likely be to install more efficient ones and get more power from the given real estate.

    • Bob_Wallace

      “Expect to get 17 cents/KWH. Average 5.5 hrs of sunshine per day in the Rawalpindi/Islamabad region of Pakistan”

      You must be looking at some expensive hardware. Or expensive financing.

      With 23% capacity, 6%/20Yr financing and a 1c/kWh O&M cost you must be looking at close to $4/watt installed price.

  • sunoba

    You might be interested in my LCOE comparisons for solar projects around the world, now updated to included Wymeswold. Details at http://www.sunoba.blogspot.com

  • James Wimberley

    To put a slight damper on this, there are not that many disused airfields in Southern England available for this sort of large-scale deployment. There is naturally strong local resistance to using productive farmland for the purpose. What’s available in quantity is commercial, industrial and residential rooftops and car parks, but at higher cost.

    • Bob_Wallace

      There is a new flat roof installation system which comes with its own ballast system. No roof penetration needed, just plop down and plug in.

      This should bring down the cost of commercial/industrial rooftop solar.

      While the size of rooftop installations is smaller, which cuts into installation efficiencies, there are gains in having no land development costs, no land costs, few to no neighbor objections, a grid connection just mere feet away….

      How’s SoEng for landfills and brownfields? Those are probably less useful than abandoned air fields. (Although old airfields can be brownfields. Lots of nasty chemicals have been used in the flying business.)

    • Ronald Brak

      It’s not a problem, James. Firstly rooftop solar is not much more expensive than utility scale solar. It is installed for $2.33 a watt in Sydney and under $2 in Germany. But it competes with retail electricity prices instead of wholesale prices, so its actually more cost effective than solar farms. While the UK doesn’t have the roofspace to get all its daytime electricity from rooftop solar like Australia could, there is no requirement for the UK to get all its daytime electricity from rooftops to go carbon neutral. Also, there is always the option of putting solar panels on walls if that turns out to be cheaper than other alternatives.

  • James Hilden-Minton

    What is the average wholesale price weighted tothe time of day that solar power is produced. That would be apples.

    • Ronald Brak

      Good question. Unfortunately I cant give an exact answer but I can say that except for early in the morning in summer, solar PV produces electricity entirely during peak tariff times for consumers. I presume this would mean the wholesale price when solar is producing electricity might average around nine cents. Looking at seasonal electricity demand for the UK I see the sun is still shining during the summer peak and that Britain very roughly uses 17% more electricity in winter than summer. Fortunately wind power is complimentary with solar in the UK and produces more electricity in winter than summer.

      The fact that electricity generated during the day is on average of higher value than electricity generated at night is a very good point and one I should have included in the article,

  • addicted4444

    I think one part you missed out on is the fact that these prices are pretty much already locked in. They aren’t going to deviate much (there are still risks, for example, tons of volcanic activity meaning less than expected sunlight, etc).

    OTOH, a lot of fossil fuels prices are very much up in the air. Throw in a reasonable carbon price, which actually accounts for externalities, and they are almost certainly more expensive. Throw in geopolitical risks, and it gets even worse.

  • Bob_Wallace

    Great job, Ronald.

    Solar is on its way to being too cheap to meter.

    Wait, I shouldn’t say that. Last electricity source we said that about turned out to be too expensive to consider.

  • arne-nl

    Hi Ronald I liked your article. It doesn’t come as a surprise to me, I already was quite aware of solar installation costs in Europe. And the best is yet to come.

    You state: “The construction of a new nuclear plant in the UK will apparently not
    proceed without a guaranteed minimum price of 15 cents a kilowatt-hour.”

    Do you have a source for that? Thanks.

  • jlmur

    Bravo!

  • Russell

    That is surprisingly low, way less than large scale in the us. Wonder what the installed cost is in china, surely less

    • Ronald Brak

      It should definitely be cheaper in China, thanks to their low costs of labour and the cost per kilowatt-hour should be very low thanks to their low cost of capital. Of course this means that whatever they do it for isn’t directly comparable to countries that don’t share these characteristics. But it certainly means that Australian politician Greg Hunt is wrong when he says China will increase its coal consumption by over 50% from current levels.

      • JustSaying

        And don’t be surprised it there is a big push in China to install a lot of panels in order to eats up some of the extra panels it has made and keep those factories open. With China water problem and increasing transportation cost for coal, solar is look a lot better there.

        • Bob_Wallace

          China recently reset its 2015 solar target from 5 GW to 31 GW.

          Some of that is likely to help their solar industry get through this tight spot. A bunch of it seems to be about cutting back on fossil fuel use.

  • geoffderuiter

    I really appreciated the style of writing in this article 🙂 Keep up the good work!
    And, Go solar Go.

    • Ronald Brak

      Thanks! I will.

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