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I'm confused why you're confused. You pay for energy, not for power. You wouldn't pay the same for a kW delivered for 1 hour as you would for a kW delivered for

by phaemon 10y ago

I'm confused why you're confused. You pay for energy, not for power. You wouldn't pay the same for a kW delivered for 1 hour as you would for a kW delivered for a whole year, right?

jessaustin 10y ago
When you buy solar panels, or build what TFA called "a solar plant capable of generating at least 350 megawatts" (note the units) you certainly are paying for power. Quoting an energy price hides all sorts of assumptions about finance, equipment longevity, and maintenance costs, so it's clear that doing so is just an excuse to say "cheapest solar on record".
- yessql 10y ago
  The people who build the power plant pay for MW of solar panels. The people who buy the energy from the power plant pay for kWh. Notice that this an interesting article because the plant is going to have a power purchase agreement price of under 2.5 cents per kWh. We don't know what the equipment costs per Watt.
- Someone 10y ago
  It's IAAS (infrastructure as a service (a term I just made up, but I think it is appropriate)) Governments nowadays don't buy a solar plant, they put out a tender "we're willing to buy X GWh of solar power a year for Y years. Solar panels can be placed in area A, and must be removed afterwards. Please quote us a price per kWh." Advantage of that for the buyer is that, if they get a offer that is too good to be true, they haven't paid the full sum when the seller goes bankrupt. Also, because the seller has to operate and maintain what he sells, he will think harder about maintenance costs, ease of removal, etc. Another example of this is the recent auction for a sea-based wind farm in the Netherlands (http://www.offshorewind.biz/2016/07/06/borssele-12-worlds-cheapest-offshore-wind-farm/ http://www.offshorewind.biz/2016/07/06/borssele-12-worlds-ch..., 7.27 eurocents/kWh) Risk for the buyer is that he commits to buy a fixed amount of power at a fixed price over the lifetime of the plant. Worst-case for the buyer, we develop cheap fusion next year, so that electricity prices drop to zero.

by phaemon 10y ago

I'm confused why you're confused. You pay for energy, not for power. You wouldn't pay the same for a kW delivered for 1 hour as you would for a kW delivered for a whole year, right?

jessaustin 10y ago

When you buy solar panels, or build what TFA called "a solar plant capable of generating at least 350 megawatts" (note the units) you certainly are paying for power. Quoting an energy price hides all sorts of assumptions about finance, equipment longevity, and maintenance costs, so it's clear that doing so is just an excuse to say "cheapest solar on record".

yessql 10y ago
The people who build the power plant pay for MW of solar panels. The people who buy the energy from the power plant pay for kWh. Notice that this an interesting article because the plant is going to have a power purchase agreement price of under 2.5 cents per kWh. We don't know what the equipment costs per Watt.
Someone 10y ago
It's IAAS (infrastructure as a service (a term I just made up, but I think it is appropriate)) Governments nowadays don't buy a solar plant, they put out a tender "we're willing to buy X GWh of solar power a year for Y years. Solar panels can be placed in area A, and must be removed afterwards. Please quote us a price per kWh." Advantage of that for the buyer is that, if they get a offer that is too good to be true, they haven't paid the full sum when the seller goes bankrupt. Also, because the seller has to operate and maintain what he sells, he will think harder about maintenance costs, ease of removal, etc. Another example of this is the recent auction for a sea-based wind farm in the Netherlands (http://www.offshorewind.biz/2016/07/06/borssele-12-worlds-cheapest-offshore-wind-farm/ http://www.offshorewind.biz/2016/07/06/borssele-12-worlds-ch..., 7.27 eurocents/kWh) Risk for the buyer is that he commits to buy a fixed amount of power at a fixed price over the lifetime of the plant. Worst-case for the buyer, we develop cheap fusion next year, so that electricity prices drop to zero.