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The price of a kWh

Everybody knows that power from solar panels still is not competitive to power “from the plug point” With increasing fuel prices and decreasing costs of solar panels, these prices will meet each other more and more in the future.

When there is no electricity available at all, the situation is different. Both the investment in solar power as the installation of a power grid to the remote site will be high. In many cases it will appear that solar power will be economically most viable, due to the relatively low power demand.

From the figure this becomes visual clear. At low power demand the price of electricity from a solar power system will be lower than in case of grid extension, even at relatively short distances. Per location this graph will be different. The curves will depend on many local factors, like the landscape, the level of salaries, material costs.

Another comparison is the price of solar power and power from a generator. In this case, solar power does not need to compete with cheap electricity from the mains, but with expensive power from the generator. With the current fuel prices the competition becomes more and more fair: A kWh from a diesel generator approaches the $1.00 from below. A kWh from a solar power system approaches the $1.00 from above. In some situations, solar power is already cheaper than a diesel generator.

Below an example is elaborated for the Cambodian situation.

At interest of 6%, 1900 hours full sunshine and system efficiency of 60%, the 100Wp solar power system will provide 114kWh annually. The average kWh-price will be $122,26 / 114 = $1,07.

The calculation of the kWh-price from a generator works in a comparable way. Let’s consider a 25kVA-machine, able to supply 20-25kW maximal, but rarely does, because this power is not always needed. Usually it operates in partial load. Compare it to a coach able to carry 50 passengers, which is transporting only 10 persons. The efficiency of this bus is lower compared to a full loaded situation.