We want to estimate the cost of electricity in a highly favorable site for solar power like the US southwest. Assume capital costs have continued to fall and are now at $1000 per kW. This would be a big government project with a very low CCF of 0.06 and the FOM is $5/kWyr. Assume that the installation will be a tracking system with capacity factor of 0.37.

a) What is the levelized cost of energy (LCOE)?

We can use solar power directly to produce other energy sources like hydrogen. Recent reports estimate that hydrogen produced at large scales via electrolysis would cost $4.30 per kg, with $3.50 per kg of that cost coming from electricity. However, that electricity is produced at a rate of $.065/kWh, which is a very high cost.

b) How much would the electricity part of the cost be with our cheaper solar power found in Problem 4? Give your answer in $ per kg of H2.

Solar power can be great source of energy for hydrogen (H2) production. However, unfortunately, the intermittent nature of solar power will mean that the hydrogen plant's hardware will be left idle more often. This means that fixed costs will contribute more to the cost of hydrogen.

c) The original estimate had fixed costs at $0.8 per kg when the plant had 90% utilization. Now that it only has 37% utilization, what are the fixed costs in $ per kg?

d) Using the new fixed and variable costs that you determined in Part b and c, what is the total cost of hydrogen produced by solar power? Answer in $ per Gigajoules.

e) Why doesn’t the use of solar power for hydrogen production actually represent a huge cost savings opportunity?