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Price per watt

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Title: Price per watt  
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Subject: Power optimizer, Photovoltaic power station, Growth of photovoltaics, Renewable energy
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Price per watt

See also: Cost of electricity by source for a comparison of prices per watt by generation source

Price per watt history for silicon photovoltaic cells since 1977

Price per watt, or $/W is a common way to compare the capital costs of various forms of electricity generation. It refers to the number of dollars one would have to spend to buy a machine capable of producing one watt of electricity. It is calculated by dividing the total project capital cost by the amount of peak power (watts-peak, or "Wp") it can produce.

INSTALLATION COSTS: [2] Solar panels are currently selling for as low as US$0.70 per watt (7-April-2012) in industrial quantities; the balance of system costs (inverters, racks, wiring, marketing) made the median price in 2011 of large (>100 kW) systems $2.60/watt in Germany and $4.87/watt in the US.[3] The price difference between German and US photovoltaic systems was analyzed in 2013 by Lawrence Berkeley National Laboratory.[4] Large wind turbines cost about $2 a watt.[5] Natural gas-fired peaking power plants are around $1 per watt ($1,000/kW) of electrical capacity.[6]

CAPACITY FACTOR: Capacity factor is actual power produced yearly, relative to what would be produced if the system produced full power all year long. The cost of electricity produced depends also upon how much energy each installed watt produces over the course of a year. Coal, gas and nuclear plants require downtime for maintenance; nuclear plants have to shutdown for refueling; dams do not always have enough water; wind does not blow steadily; and the sun does not shine 24 hours per day. When comparing price per watt, capacity factor should be considered in the overall cost comparison. For instance; if cost of solar is $1 per watt, when including average capacity factor of approximately 20%, this cost rises to $5 per watt when compared to a source that produces energy consistently.

Wind: In 2012, the US had 60 GW of installed wind capacity.[7] If maximum power had been produced 24 hours daily, all year long, 525,600 (60 x 24 x 365) GW hours of energy would have been made. Actually, 140,000 GWh were produced,[8] so capacity factor of US wind power was 27% (140/525).

Solar: In the US, photovoltaic (PV) panels will see an average of 4–5 hours per day[9] of full sun, so the effective capacity of solar power generation is 4.5/24, or about 20%. In 2011, statistics[10] showed that US installed solar power, PV and thermal, totaled 4.9 GW, which produced 7454 GWh of energy. If the sun were always overhead, the installed capacity of 4.9 GW would have produced 4.9 x 24 x 365=42924 GW hours, so the actual production was 18%.

Note that the capital costs are not the only determinant of the cost of the electricity produced. A coal plant needs to burn coal to produce power (a limited resource). Maintenance, replacement, fuel costs and capacity factor all affect the cents per kilowatt hour of the power plant's delivered electricity. Also, liability, the harms done by that mode of power generation, are not included. "Externality and insurance costs of energy sources" became in the 2010s recognized as equivalent to fuel costs as a decision factor, driving such decisions as Japan's decision to phase out nuclear power in 2012, and the shift off coal as the dominant form of electricity generation in the US. (See the section "Externality and insurance costs of energy sources" in the article cost of electricity by source which deals with these issues in depth.).

Because of differing accounting treatment of liabilities and fuel pricing, the cost of electricity by source can vary widely even for the same type of source.

Electricity pricing is also highly regulated most places in the world, and the ability to recover costs can likewise affect the decision on what type of plant to build. A preference for cheaper dirtier fuels would be expected, for instance, if the cost of more expensive fuels could not be recovered by the power plant operator.


  1. ^ John Markoff, "Start-Up Sells Solar Panels at Lower-Than-Usual Cost", New York Times, 18 December 2007
  2. ^ "Three Gorges dam wall completed", BBC News, 20 May 2006
  3. ^ "Photovoltaic pricing trends"
  4. ^ "Why are residential PV prices so much lower in Germany than in the US?" [1]
  5. ^ "How much do wind turbines cost?
  6. ^ "Updated Capital Cost Estimates for Utility Scale Electricity Generating Plants
  7. ^ "Wind powering America: Installed US wind capacity and wind project locations". 
  8. ^ Electric power monthly . 
  9. ^ "Average solar radiation"
  10. ^ "Solar power in the US"
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