With so much focus on the inefficiency of solar panels, few are aware of an even more costly solar technology called “thermal solar.” Like solar panels, the Obama Administration has offered billions in loan guarantees for thermal solar projects across the country.
Also like solar panels, the thermal solar projects are starting to fall apart financially. Even those projects that are ultimately successful will have extremely high costs and produce little environmental benefit.
Unlike solar panels, which turn energy from the sun directly into electricity, thermal solar uses heat to create steam that generates energy. The result is that energy produced using thermal solar is even more expensive than energy produced by solar panels. The Energy Information Administration says the projected average cost per megawatt hour (MWh) of energy for photovoltaic solar (solar PV) in 2016 will be $211. For thermal solar, the EIA notes, the cost is projected at $312.20 per MWh, or nearly 50 percent more. As inefficient as solar panels are, thermal solar is much worse.
Some will argue that in the right places, like the desert, it makes sense. The EIA looks at that as well. It notes that the projected minimum cost for thermal solar will be $192 per MWh, with the maximum reaching $642.50. By way of comparison, solar PV’s minimum cost will be $158.90, and the minimum cost for wind energy will be $82.30. Among the “green” energy sources, thermal solar is by far the worst of all options.
Thermal solar’s high cost and low energy production is already leading the technology to bite its supporters and investors.
Forbes reported yesterday that BrightSource, a company that produces thermal solar energy, pulled its initial public offering abruptly due to “adverse market conditions.” Up to this point, Forbes argued, “BrightSource Energy, which is well capitalized and the recipient of a $1.6 billion federal loan guarantee, seemed a likely candidate to be one of the few solar thermal startups left standing.” Now, that appears to have changed.
There are, however, other thermal solar projects that have received federal loan guarantees:
Aside from the financial problems and the high cost of thermal solar, there is also the environmental cost. Assuming that all goes to plan, thermal solar’s high cost also means it is a very poor way to reduce carbon emissions. For example, the Abengoa Solar Solana project is projected to reduce 544,000 tons of carbon emissions per year. Over a 25-year lifespan of the project, the cost per ton of CO2 reduced would be about $125. Compare that to the cost per metric ton in Europe of about $20 over the last few years, or the projected $30 per ton cost under the upcoming cap and trade system in California. Put simply, in the best circumstance, we’re paying the cost of four or five tons of carbon reduction but only getting the reduction of one ton. The SolarReserve project would spent more than $100 per ton of CO2 reduced.
The high cost and low environmental benefit are two reasons thermal solar projects are on shaky ground. The fact that both BrightSource and Solar Trust have both hit financial difficulties is a testament to those problems.
One could say that given the large sums of taxpayer dollars involved in these projects, thermal solar could end up being an even larger financial mess than Solyndra. It would be more appropriate, however, to say that even if these projects work as promised, the high cost to produce small amounts of environmental benefit mean they are guaranteed to be a significant environmental mess.