5 Alternative Energy Sources That Are Cheaper Than Solar
Is solar power "the fuel of the future"? Elon Musk thinks so.
The co-inventor of PayPal, now turned alternative energy rock star, has built two companies -- solar power utility SolarCity (SCTY) and electric car company Tesla (TSLA) -- around the idea that solar-generated electricity is the way to power our cars and save our environment. He's also working on a third company -- SpaceX -- which aims to bring mankind a bit closer to that ultimate clean-energy source, the sun.
But is solar power truly the solution to our energy needs? Not necessarily.
'Free' Power Can Be Awfully Expensive
Last month, alternative energy analyst Gordon Johnson at Axiom Capital crunched the latest numbers out of the U.S. Energy Information Administration, and published a report on his findings.
The upshot: When it comes to "alternative" ways to generate electricity, solar energy is just about the most expensive form of energy you can get.
Calculating the cost of generating a kilowatt hour of electricity by tallying the cost of building a facility, operating it, and paying for the fuel it consumes -- then amortizing all this across all the electricity it's expected to produce in its lifetime -- Johnson points out that solar photovoltaic power costs about 22 cents a kwh. Solar thermal power, where sunbeams are reflected and concentrated on a heat-retaining medium such as salt or graphite to store heat for later use in generating electricity, costs even more -- about 32 cents a kwh.
What forms of energy are cheaper than these? Pretty much any that you might think of.
Motley Fool contributor Rich Smith does not own shares of any solar or electric car company named above. (Go figure.) But The Motley Fool recommends and owns shares of Tesla Motors.