“But messaging isn’t the problem. The economics, the numbers, are. If solar is truly affordable, reliable, and resilient, the suppliers should say so plainly: in cents per kWh, free of explicit subsidies and mandates.” – David Bergeron, SunDanzer (below)
I just returned from the Intersolar & Energy Storage North America conference in San Diego where the keynote address focused on how the long-duration storage industry can move forward under the headwinds of the current administration. Their strategy? Better messaging, shifting from climate-change arguments to affordability, reliability, and resilience.
But messaging isn’t the problem. The economics, the numbers, are. If solar is truly affordable, reliable, and resilient, the suppliers should say so plainly: in cents per kWh, free of explicit subsidies and mandates.
Cost and reliability have always been the problem with solar. The price of solar has fallen greatly in the past 30 years, and battery prices are falling, too, so there is hope that solar with batteries can become economically viable in more and more applications. But where is it viable today? That is the question the industry should be answering—clearly, directly, and in dollars and cents.
At Intersolar, I went to a few vendors promoting residential solar-and-battery systems and asked a simple question: “If I go completely solar with battery backup, what is my approximate cost of energy (cents/kWh), assuming normal amortization and maintenance?” No one I spoke to could answer that basic, simple question.
This is surprising, if not stunning. It should be the most important number in the industry. These vendors promoting solar against competing energy sources—gas, propane, coal, nuclear, and others—should know their cost for comparison. Even if solar is more expensive, some might choose it for the sake of independence; that’s fair. But if the industry cannot state its delivered cost of electricity, it is not ready to claim “affordability.”
As a residential customer, I can buy reliable electricity from many utilities for 10–15 cents/kWh (25–50 cents in California). So what is the delivered cost of residential solar with battery backup? My simple calculation indicates it might be 15–30 cents/kWh for residential systems in a sunny region, depending on the size of the battery. But that system would still not be as reliable as grid power. You can add a backup generator, but the cost per kWh will increase another 10 cents or so.
Even at 25–40 cents/kWh, solar can make sense in some places—and this is where the industry should focus: the markets where the numbers work without heroic assumptions. But as for most Americans in most places (excluding blue-states Hawaii, California, Massachusetts, Rhode Island, and Connecticut), home solar is approximately double the cost of grid electricity–and with a lot less transaction cost and risk.
For utility-scale systems, the same price-signal test applies. If solar were truly affordable, someone could offer a fixed price to a utility that the utility would happily purchase without government subsidies or mandates. This should be the goal of the on-grid solar industry: a competitive price with no subsidy (no Investment Tax Credit, in particular). They claim they are there, but the most honest referee is procurement. If solar were truly a better value to utilities—delivered, firmed, and reliable — utilities would freely choose it. There is a reason that most new data centers are opting for natural gas power rather than solar.
“Affordability” cannot be a slogan. It must be a price. The industry should publish all-in, delivered cents-per-kWh ranges under standard assumptions—financing, maintenance, replacement, and reliability—and stand behind them. If solar is competitive, the market will validate it. If it is not, no amount of messaging will change the arithmetic.
“Reliability” is another word I heard at the conference used to describe solar. I agree that with enough battery capacity, solar can be considered reliable 24/7 power—but at what cost? Solar is fundamentally intermittent and can only be made reliable with significant battery expense. That is not an argument against solar. It is an argument for honesty in the price signal.
Conclusion
So when the solar lobby comes to town claiming solar is affordable, reliable, and resilient, a simple question should follow: What is the delivered cost per kWh, and how much of that price depends on subsidies, mandates, or special rate structures? If the answer is unclear, the claim is marketing, not economics.
The ITC is ending, and net-metering subsidies are waning in many key states. The training wheels are coming off. It’s time for solar to compete on price. It can in some places, and as time and technology advance—especially with energy storage—solar might one day be a significant energy source. But it needs to focus on reducing cost and proving it in the only language the market understands: price signals. The political winds that blow solar to and fro would calm if solar were economical. That is a better path to success.
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David Bergeron is a solar technologist and founder/CEO of SunDanzer, a free-market, off-grid solar company based in Tucson, Arizona. Bergeron’s letter, “End DOE’s Loans/Grants Now!” to Jigar Shah, formerly director of the $400 billion Loan Programs Office, is a rare example of a free-market business leader putting principle first.