Hazelwood owner insists solar costs will not fall

This below, is the graph that worries GDF Suez. It shows solar PV costs falling by more than half over the coming decades. Most solar analysts, however, would suggest that this is a very conservative estimate, noting that some solar systems are being built in the US at little more than $60/MWh, which after adding back in a tax benefit, would place the cost of the technology in 2014 within 5-10 per cent of BREE’s estimates for 2050.

As we have noted, solar module manufacturers are still recording manufacturing cost reductions of around 20 per cent per year. This has allowed them to record positive margins – in the teens – and will allow them to reduce prices in the future.

The cost of modules is also just one part of the equation. The so-called soft costs are the main target of the US Department of Energy’s Sunshot program. These costs – for associated materials such as inverters, mounting, finance, installation and maintenance – will likely come down in coming years to the point where solar PV is cheaper to install at utility level than coal-fired power stations. It already is for consumers, but the big coal producers don’t want you to know that.

GDF Suez’ submssion is also notable for urging the RET review panel to assume the most negative forecasts for future demand. This would help in getting a revised “real” 20 per cent target that would result in as few large scale projects being built as possible.

GDF says it wants only forecasts used by the Australian Energy Market Operator to be considered, and even these adjusted for a more “bearish” view. “Other sources have a proven upward bias,” it notes.