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Sorry you were downvoted for asking a legitimate question. Other commenters have spoken to the land piece, but not to the actual solar/storage cost side. Most

Sorry you were downvoted for asking a legitimate question. Other commenters have spoken to the land piece, but not to the actual solar/storage cost side. Most of these insanely low bids are produced based on extrapolating the cost decline of solar and storage to the future point where the plants will actually come into operation. If they had to buy everything right now, they might not be able to achieve those costs per kWh, but plants take time to build, so there is an assumption of further declines in acquisition and operating costs over the next several years baked in (in this case, the target date is 2023).

epistasis 8y ago
Excellent point about the install date. Most utility planning happens at longer time scales much longer than one year, as it well should. Prior to the 2000s, the electrical utilities had basically static and unchanging technology, which meant that utilities could use long-established price estimates when determining technologies. No longer is that possible, solar, wind and storage are dropping so fast in costs that it can be hard to keep pace. A California utility recently tried to get bids for a new gas peaker plant, unaware that storage was now cost competitive, because they were using cost estimates that were only a few years old. And the NextEra CEO, quoted in the article above I linked, said way back in 2015 that by 2020, no more gas peaker plants would be built. This is a revolution, where costs are falling faster than even the most enthusiastic boosters were expecting.
sandworm101 8y ago
If these are speculative then I would call them artificially numbers, artificial because they are based on predicted markets rather than real market dynamics. I wonder though if it is safe to predict a continuous drop in panel prices. A few years ago Germany saw prices rise due to increased demand, demand fuels ironically by subsidies. And there is a good chance that the US administration might deliberately cripple the solar market, either by increasing costs or reducing demand (ie the proposed mandate to buy coal/nuclear energy first). Give that unpredictability, these low bids are more business strategy than a reflection of actual costs structures.
- epistasis 8y ago
  These aren't "predicted markets" this is the actual market itself. These are the real bids and contracts. It doesn't get more real than that. If you think that these providers are going to default, well, then that's a bet you can make. But these are the people with skin in the game that are betting real, actual money and the future of their companies.

epistasis 8y ago

Excellent point about the install date. Most utility planning happens at longer time scales much longer than one year, as it well should. Prior to the 2000s, the electrical utilities had basically static and unchanging technology, which meant that utilities could use long-established price estimates when determining technologies. No longer is that possible, solar, wind and storage are dropping so fast in costs that it can be hard to keep pace. A California utility recently tried to get bids for a new gas peaker plant, unaware that storage was now cost competitive, because they were using cost estimates that were only a few years old. And the NextEra CEO, quoted in the article above I linked, said way back in 2015 that by 2020, no more gas peaker plants would be built. This is a revolution, where costs are falling faster than even the most enthusiastic boosters were expecting.

sandworm101 8y ago

If these are speculative then I would call them artificially numbers, artificial because they are based on predicted markets rather than real market dynamics. I wonder though if it is safe to predict a continuous drop in panel prices. A few years ago Germany saw prices rise due to increased demand, demand fuels ironically by subsidies. And there is a good chance that the US administration might deliberately cripple the solar market, either by increasing costs or reducing demand (ie the proposed mandate to buy coal/nuclear energy first). Give that unpredictability, these low bids are more business strategy than a reflection of actual costs structures.

epistasis 8y ago
These aren't "predicted markets" this is the actual market itself. These are the real bids and contracts. It doesn't get more real than that. If you think that these providers are going to default, well, then that's a bet you can make. But these are the people with skin in the game that are betting real, actual money and the future of their companies.