Solar and wind generated electricity have reached price levels that are comparable, if not superior, to that of conventional fuels such as coal and natural gas. This is a wonderful and significant event, particularly because they are now price competitive without continued government support.

While continued government support would certainly be a boon to the industry and speed its adoption, the removal of government support would not be a death knell for the alternative energy industry. Unfortunately, the alternative energy industry has been stuck in a boom-and-bust cycle for the previous 44 years, mostly due to intermittent government support for both research and development, and deployment of alternative energy technologies. The fact that these technologies are finally commercially competitive sans government support means that, while the growth of the industry is impacted by government involvement, the industry is certainly not the risky investment it was before.

There is still one major issue to tackle, however. The current intermittent nature of solar and wind electrical power generation means that it is still very expensive for utilities (and individuals, but particularly utilities) to adopt alternative energy technologies wholesale. There are instances of utilities investing in large scale alternative energy power plants, but it is still necessary for utilities to have back-up, on-demand power plants based on coal or gas in order to smooth out the power generation curve. This is a very expensive set up, and so long as alternative energy generation has the intermittency issue, cost will remain a prohibitive barrier to the full-scale implementation of alternative energy around the country.

The solution? Utility-scale battery grids capable of storing and distributing the power generated by solar and wind. This would allow for solar and wind farms to smooth out their energy curve on their own, eliminating the need for expensive, massive back-up power plants.

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Solar and Wind Energy Start to Win on Price vs. Conventional Fuels

According to a study by the investment banking firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 cents. Without subsidies, the firm’s analysis shows, solar costs about 7.2 cents a kilowatt-hour at the low end, with wind at 3.7 cents.