How do they figure the cost of solar energy electrolysis?

Question

I've been reading through this article

http://www.nap.edu/openbook.php?record_id=10922&page=103

They cite the current cost of solar in the range of $3-$6 per peak-watt. And they give other figures for the conversion of Solar to Hydrogen.

What I don't understand is that the sun shines all day and I don't pay a dime. So how can there be a 'cost' for solar power? Even if you have to pay for photo-voltaics, that cost will be ever reduced by the energy savings.

Can someone explain how there's a cost for solar and furthermore solar to hydrogen electrolysis?

Answer 1

The cost you're speaking of is the cost per watt of output for the solar panels themselves,  it has nothing to do with the cost of the sunshine, or the power it produces. Getting free electricity seems to get lost on people, all they look at is the up front cost and give no account to the virtual lack of an electric bill afterwards. These are the same people who also wouldn't bat an eye for a $70K kitchen, or a $30K bathroom, go figure.

Answer 2

Well you have to pay to have the panels installed.  If you break down the cost into monthly payments, you can further break it down into cost per second.  Then figure out how much energy you're getting from the sun at peak hours, and you can calculate cost per peak-watt.