$29.10

That’s the price of solar power that won the electricity auction in Chile recently – $29/megawatt hour.  Total pricing in the auction, which provides about a third of the country’s capacity, was down 40% from a similar process last year, with renewables winning more than half of the contracts.

For reference, here are the other bids in aggregate:

•  Wind $38/MWh
•  Gas $47/MWh
•  Coal $57/MWh

Unless you are a utility analyst, that’s all a little abstract, so here is a translation to some more familiar reference points:

A typical US household uses 11 MWh/year, (the average globally is 3-4 MWh/household/year).  The solar price in this auction is just under 3c/kwh, versus US wholesale generation costs for gas and coal that are around 4c/kwh.  So, it’s about 30% cheaper for this solar bid in Chile than for coal or gas generation in the US.  The typical US household would save about $400/year with this price differential, assuming constant markups between wholesale generation costs and retail residential prices.

That’s apples and oranges, of course – different climates, different market mechanisms, different regulatory systems, plus it’s just a bid, not yet delivered.  But this bid was even lower than the $29.90 solar deal in Dubai earlier this year.  So, if you are still thinking of solar as the nice, expensive, fringe-y alternative energy source, it’s really time to re-think.

A helpful, more complete article on the auction can be found on Bloomberg, and lots of terrific electricity data can be found at the US Energy Information Administration site.  Oh, what I would have given for this awesome geeky data-packed site back when I was an electrical equipment analyst!

Photo: though it looks like the sun, this mosaic mural is said to depict all of the sacred sites of the Incas, with Machu Picchu at the center. Isn’t it fantastic?!