Clean Power

Published on November 11th, 2015 | by Jake Richardson


Solar Cheapest Electricity Option In Chile

November 11th, 2015 by  

Originally published on Solar Love.

According to a report from Deutsche Bank, electricity generated by solar power is the cheapest in Chile now. In fact, both solar and wind power there make electricity more cheaply than fossil fuels do.


Deutsche Bank Equity Research North America conducted an analysis by examining PV solar projects in Chile. The research showed solar had become the cheapest form of electricity generation. For example, coal power had rates of US$85/MWh but for recent solar PV farms the rate was $65 to $68/MWh. Obviously, this is quite a difference.

A concentrating solar power project came in at $97/MWh, but it also had storage. It would have been interesting to see what the rate was for one without storage, for the sake of comparison, and what form of storage is being used.

$0.52/W is the price for PV modules, but that cost drops to less than 50 cents for larger projects. Still, Chile could experience one gigawatt of solar installations this year and has about 2 GW under construction. It has been said that Chile doesn’t have a renewable energy problem, it has a transmission problem, because the grid was not built in parallel to the new renewable energy installations.

The thing is, technology projects often have snags that crop up and seem like deal-breakers, until they are they dealt with. Why would Chile’s transition to renewable energy be completely smooth?

It’s not realistic to expect that it would be – first renewables were considered by some to be far too expensive, then there was no energy storage – but now that’s being addressed. Grids are outdated, but they can be revamped or expanded too. In point of fact, one might argue that the momentum generated by the various succcess of renewable energy is driving technological change in related industries.

If solar power electricity is already cheaper than fossil fuel electricity, how much cheaper will it be in five years there? Chile hasn’t even been at it that long, and already has surpassed grid parity. This achievement is an example to us all.

Image Credit: Aaron Bornstein, Wiki Commons

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About the Author

Hello, I have been writing online for some time, and enjoy the outdoors. If you like, you can follow me on Google Plus.

  • Larry

    Looks like a fantastic emerging market for Elon Musk and the Powerwall storage systems

  • Michael G

    Island by island, and country by country, solar wins as the price gets cheaper.

  • JamesWimberley

    CSP storage is usually hot salt. It is easy to add because a CSP plant starts with heat: the receiver transfers heat energy to a working fluid (such as steam), which can be fed either into a turbine or a reversible heat exchanger in a hot salt reservoir. So adding storage costs much less for CSP than for renewables that generate electricity directly.

  • Harry Johnson

    Chile is blessed with some of the best solar resources in the world. Coupled with Brazil’s hydro, they could power the entire continent. Concentrated solar with thermal storage is the answer and the Fresnel system is particularly promising.

    • Frank

      No I didn’t do the math, but I’ve see the size of the square required to be covered in solar pannels to power the entire world, and not just electricity, and I’d be willing to bet that if you covered Chile in solar pannels, you could power the entire planet several times over. I think you were thinking in a more practical sense.

    • JamesWimberley

      Brazil’s hydro capacity is large, but used domestically. New big dams would have to be in the Amazon rainforest, and very destructive. The Belo Monte dam on the Xingu has faced major opposition and it may very well be the last. Wind and solar are now cheaper, can be built much faster, and are sited near the centres of population on the Atlantic façade.

    • AltairIV

      That big red blob is, of course, the Atacama desert, 100,000 square kilometers of the driest, most desolate land on earth. Some locations within it have never had any reported rainfall. Not a whole lot of plant or animal life either. It is, in other words, pretty much the *perfect* location for large solar installations.

  • Nolan Thiessen

    Great news! The only way we’ll see a transformation to a low carbon grid is by having renewables beat fossil fuels in cost. Governments, businesses, and the general public are concerned about one thing and one thing only – cost. Businesses look to externalize all costs whereas governments aren’t willing to stand up to internalize the costs. People can’t see beyond their utility bill.

    • Frank

      It’s like gravity! Humanity has been very adept at exploiting new forms of energy, once the price and availability were good. At this point, at least in Chile, I think solar has become inevitable. It’s not a question of whether, but how.

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