Price per watt
Encyclopedia
Price per watt, or $/W is a common way to compare the capital cost
s 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.
Modern coal power plants are generally the least expensive sources of electricity by this measure, at around $2.10 a watt. Large hydroelectric systems can be even less expensive by this measure; the Three Gorges Dam
is reported to have cost ¥180 billion (US$26 billion), about $1 a watt, but actual costs are widely believed to be much higher. Solar panels are currently selling for as low as just over $1 a watt in industrial quantities, but the "balance of system" costs put the systems closer to $4 to $5 a watt. Large wind turbine
s are around $8 a watt and falling. Natural gas
-fired peaking power plant
s are around $6 a watt.
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, while a solar panel has no fuel input at all. Maintenance, replacement, fuel costs and capacity factor
all effect the cents per kilowatt hour
of the power plant's delivered electricity.
Capital cost
Capital costs are costs incurred on the purchase of land, buildings, construction and equipment to be used in the production of goods or the rendering of services, in other words, the total cost needed to bring a project to a commercially operable status. However, capital costs are not limited to...
s of various forms of electricity generation
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...
. It refers to the number of dollars one would have to spend to buy a machine capable of producing one watt
Watt
The watt is a derived unit of power in the International System of Units , named after the Scottish engineer James Watt . The unit, defined as one joule per second, measures the rate of energy conversion.-Definition:...
of electricity. It is calculated by dividing the total project capital cost
Capital cost
Capital costs are costs incurred on the purchase of land, buildings, construction and equipment to be used in the production of goods or the rendering of services, in other words, the total cost needed to bring a project to a commercially operable status. However, capital costs are not limited to...
by the amount of peak power
Watt-peak
Watt-peak is a measure of the nominal power of a photovoltaic solar energy device under laboratory illumination conditions. Related units such as kilowatt-peak or kilowatts-peak and megawatt-peak are also used, and in the context of domestic installations kWp is the most common unit encountered...
(watts-peak, or "Wp") it can produce.
Modern coal power plants are generally the least expensive sources of electricity by this measure, at around $2.10 a watt. Large hydroelectric systems can be even less expensive by this measure; the Three Gorges Dam
Three Gorges Dam
The Three Gorges Dam is a hydroelectric dam that spans the Yangtze River by the town of Sandouping, located in the Yiling District of Yichang, in Hubei province, China...
is reported to have cost ¥180 billion (US$26 billion), about $1 a watt, but actual costs are widely believed to be much higher. Solar panels are currently selling for as low as just over $1 a watt in industrial quantities, but the "balance of system" costs put the systems closer to $4 to $5 a watt. Large wind turbine
Wind turbine
A wind turbine is a device that converts kinetic energy from the wind into mechanical energy. If the mechanical energy is used to produce electricity, the device may be called a wind generator or wind charger. If the mechanical energy is used to drive machinery, such as for grinding grain or...
s are around $8 a watt and falling. Natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
-fired peaking power plant
Peaking power plant
Peaking power plants, also known as peaker plants, and occasionally just "peakers," are power plants that generally run only when there is a high demand, known as peak demand, for electricity.-Peak hours:...
s are around $6 a watt.
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, while a solar panel has no fuel input at all. Maintenance, replacement, fuel costs and capacity factor
Capacity factor
The net capacity factor or load factor of a power plant is the ratio of the actual output of a power plant over a period of time and its potential output if it had operated at full nameplate capacity the entire time...
all effect the cents per kilowatt hour
Cost of electricity by source
The cost of electricity generated by different sources measures the cost of generating electricity including initial capital, return on investment, as well as the costs of continuous operation, fuel, and maintenance...
of the power plant's delivered electricity.