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Comment by alexnewman | Hacker News Reader

Alas only at 0% interest rates. When you factor in 5% rates they are below again

Source for this? I would think inflation in construction and maintenance costs for traditional generation would still keep it more expensive.

says me. i invest heavily here and do own maths. look to capital vs op costs of renewable

I have, what you may be missing is current interest rates are linked to high inflation rates which drive up the long term costs of fossil fuels. If inflation drops and interest rates drop you can refinance your renewables.

The calculation depends on how good the specific location is for wind/solar but outside of unusually poor areas, like the UK, solar is easily the cheapest option.

there might be privileged financing somewhere i'm not aware of but it's a tough space rn. had breakfast with someone who's been in financing and constructing these for a long time and he's still working on it but much tougher.

if you want a public markets proxy, look at invesco's solar etf; down by around half. sedg is down 75%

existing infrastructure is more maintenance than construction

For renewables, most of the cost is up front, then they're cheap to run because they don't need fuel. (High capex, low opex.) Fossil fuel plants have more of a mix of upfront and operating costs. High interest rates make it expensive to borrow the upfront cost of renewables.

I did some googling about this issue. Roughly I searched: natural gas/solar/wind construction cost per MW in United States

I found: Natural gas: ~1200 USD/kW, Solar: ~1500 USD/kW, Wind: ~1500 USD/kW

Let us say that solar and wind is about 25% more expensive to build. All types have high up front costs, so interest rates will affect nearly equally. However, operations for solar and wind must be way cheaper over 10/20/30 year time frame. To be fair, I never read anything about maintenance costs for solar and wind. It certainly isn't zero, as the wind turbine will need periodic servicing, and the solar panels need to be cleaned.

> To be fair, I never read anything about maintenance costs for solar and wind.

Indeed. Those costs are never counted (e.g. how do you service and repair offshore wind farms in the middle of the North Sea). As the costs of decommissioning and replacements are never counted either. Neither are the costs of overprovisioning required for renewables.

Of course these costs are counted. You do realise these are companies running these North Sea windfarms and selling the electricity to the grid? Do you think they suddenly go, "Oh, we forgot about maintenance costs! We're losing money now!"

They sell to the grid at a price that makes them a profit. How did you think this all worked?

Lazard has a nice chart on this in their annual LCOE report.

This link is to one from a couple of years ago that I found on the web, but you can look up the latest one in their PDF:

https://reneweconomy.com.au/wp-content/uploads/2021/11/lazar...

Some things are affected more than others, especially nuclear, but it doesn't really swap relative positions to any great degree.

there is another important metric that most of these cost calculations ignore - the cost of reliability. Renewable generators create this problem due the variable and uncertain nature of their fuel. The cost of dealing with this is not paid by them.

On the other hand fossil fuel costs are risky, and if we plan to steer away from the worst climate disaster using policy tools, the cheap fuel will be gone within a plan't lifetime.

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