By Cole Lennon
Economists have long been bickering over whether nuclear or solar power would win out and become the designated energy of the future. The fight, apparently, is already being called. Solar is the declared winner. The battle for nuclear vs. solar looks set to finish.
Solar energy makes much more sense from an economic standpoint because it has a superior estimated return on investment. The estimated return on investment (EROI) for nuclear is hardly agreed upon, but standard estimates range from 5:1 to a 15:1 return. The mean estimate in recent research is 14:1, providing a huge boost on average to those who opted to invest. In 2010, this return exceeded shale, ethanol, biodiesel, and solar. Many issues, however, lurk beneath these numbers that solar will use to its advantage.
The first issue concerns both cost and scalability. Installing one nuclear plant is estimated to cost about $10 billion. This large cost can only be met by extraordinarily large companies and titanic subsidies for smaller companies. Solar projects win out in terms of cost and scale. Standard projects for houses only cost thousands of dollars, not billions. It is far less costly and more easily scalable to build new sets of solar panels instead of an entire new nuclear plant.
A second issue is the amount of growth in each industry. Nuclear usage has been flat and is set to decline in rich countries. This trend did not start suddenly either. Nuclear’s operable worldwide capacity has been hovering around 350 GWe (gigawatts of electricity) since 1994. Costs of actually making nuclear energy today are also extraordinarily variable, as many are unsure of the future of this energy source.
Solar energy today is experiencing incredible growth. Photovoltaic solar—one of two major types, and the kind requiring solar panels—grew 38% last year and is now at worldwide capacity of 138 GWe. This growth does not show signs of stopping either. China alone invested to make 13 GWe more of solar in 2013. Worldwide investment in solar was also over $113 billion in 2013, more than any other power source. Solar energy, like most energy sources, still takes over a year for production to reach full capacity, but this boom in solar is eclipsing nuclear power’s stagnation.
Stop the fight. This one’s over. Solar has won this one handily.