Solar Power Plant vs Investing

There are a number of things that will need to be mathematically worked out, so this is going to be a long post, full of numbers. I do apologize in advance for this, but ask my opponent and readers to work through it. First, we need to isolate all the factors for both a new solar power plant. From those factors, we can then focus on finding out costs, efficiencies, lifespans, and so on. Remember that we are looking at the total starting cost of the facility, the operating costs, and the money that it generates from the sale of electricity. So let us take a look at what we will find. The Solar Power plant that we will look at will be considered large by solar scale, but fairly small compared to Coal or Nuclear. Our setup is looking at a 140 MW plant (I believe the current largest in the US is around 550 MW). Unfortunately, the power-plant grade solar panels are not as readily available to the open public as personal solar panels, so getting exact prices per panel and finding a large number of them to compare prices to find the best deal is not realistically possible. However, it is safe to say that they are a better deal than the smaller home grade ones (otherwise, they'd just use the home grade ones). So what I'll do is use the price and warranties of the home grade ones and I accept the handicap that comes with it. The panels that we'll be using shall be these [1]. They come to $0.95 per watt, so a 140 MW plant will cost $133 million dollars just for the solar panels, a large chunk of change. Let us also note that the panels come with a 25 year warranty and estimate that their efficiency will drop about 0.5% per year [1]. The next thing to look at will be our construction costs. New innovations from Europe have removed nearly all of the labor (replaced with machines that can install in nearly any terrain) [2]. They show that the cost is only about $1 million for a 14 MW system. Expand this out and we find an installation cost of about $10 million for a 140 MW system. That brings our total cost to $143 million. Next we need to look at the land to place all of this. 140 MW for panels that get 146.1 W/m^2 [1], means that we'll need 958,247.8 m^2, or about 0.96 km^2, or 236.8 acres. Let us take a look at how much land goes for when you get away from the city. Looking at [3], we can see that land is selling at about $500 an acre. This means our land cost is going to be about $120 thousand, which comes to less than 0.1% of the total cost (but we need to consider it). Next we need to look at the annual expenses of maintaining this plant. Since the sun does not charge us for sunlight, there is no fuel cost. However, there is still your standard operating costs (maintenance, personnel, etc). Large Photoelectric plants have an O&M cost of $16.70 per kW [4, page 7]. For our large facility, this will come to $2.34 million a year for our O&M. Now, this will be an annual cost, and so subject to rising costs of labor and inflation (3% per year). This ties up the solar power planet rather nicely. Before we start number crunching the solar power plant, let us look at if we took that initial $143 million investment, and stuck it in some bonds or something at 5% per year. Over 25 years, we find that it has grown to $461.2 million. For the sake of fun, let us also look at if we had 10%. That would yield $1,408.5 million, or almost ten times the initial investment. So now that we have a measuring stick, let's take a look at how solar pans out. The electric rate in Arizona can vary from place to place and month to month, but the average $0.1029 per kWh (or $102.9 per MWh) [5]. We can do the math that for 6.5 sun hours (annual average, there will be more in summer and less in winter), the plant will generate 332,150 MWh, which comes to $34.18 million. After the $2.34 million for labor, we find ourselves with $31.84 million. Of course, this money will not just be sitting in a mattress, but it will be invested into the same 5% (or 10% or whatever rate the other one is getting) option that is available. The next year, we find that the solar panels are slightly less efficient (now down to 99.5%), labor is up 3% and electric costs are up 3% and the $34.18 million just made 5%. And we repeat and add for 25 years until the solar panel warranty ends (though the panels will still be good for decades after, we need some concrete ending point). What we find is the solar panels end up making over $1.94 billion over their 25 years. Over four times the amount that the investment would have. But 5% is pretty low, right, so what about 10%? Well, with that, solar would have made (from its profits going into that very fund) $3.795 billion, still well over twice as much as the investment. Where is the balancing point of where the investment finally overcomes solar? With these inflation rates, it is currently at 31.718%, in which case both investments would bring in over $106.35 billion over the 25 years. Of course, if you could find a fund that provided 31.718% annually for 25 years, you could put in $10 a week for 25 years and have $1.6 million by the end of it (sounds like a solid retirement plan). What we can see is that the rates for solar panels has dropped incredibly throughout the years and the labor costs (especially when done in large scale and not fixed to a roof) have dropped due to new technology. Solar is now effective enough that it will be a viable power source in many southern regions and we will continue to see more and more of them appear. Thank you. [1] . http://www.affordable-solar.com... [2] . http://www.technologyreview.com... [3] . http://www.landandfarm.com... [4] . http://www.eia.gov... [5] . http://www.eia.gov...