Electricity enabled by fossil fuels trades at roughly 7-7.5 cents per kilowatt-hour, but just outside L.A. a new plant currently in the works is set to 3.6 cents per kilowatt-hour. Elsewhere, in Dubai, a bid worth a record-breaking US 2.99 cents per kilowatt hour
was accepted. Solar energy is already
cheaper than coal in the world’s second most populated country, India.
All of these prices were made subsidies not included, unlike coal, gas or oil which amount to
$452 billion each year across G20 states.
Last December, Congress extended the federal investment tax credit which gives a tax credit of 30 percent of the value of solar projects. Under the new scheme, the 30 percent solar tax credit will extend through 2019 and then decline gradually to 10 percent in 2022. After 2022 the credit will be eliminated for residential solar installations and will continue at 10 percent for commercial ones.
Meanwhile, fossil fuels will still be subsidized even though the tech is centuries old. Apparently, solar and wind deserve subsidies only for a couple of years until they’ve matured, which if fair in this context, but not in the larger one where fossil fuels still retain enormous subsidies. This is essentially a form of disloyal competition.
Despite this setback, solar energy contractors are already working hard to push the solar energy kilowatt-hour price tag down to the point where it’s least just as cheap as fossil fuels post-2020 — tax credits or not.
That’s a nationwide plan, in the United States, because solar energy is already cheaper without subsidies than subsidized fossil fuels in many sunny places. So far,
30 million Americans enjoy clean solar energy that’s cheaper than their fossil run utility electricity.
Solar energy now cheaper than fossil fuels even without subsidies
Solar and wind are going to push coal out of the market very soon, and natural gas out a couple of decades down the road.