Spanish solar energy company Solarpack Corp Technologica has just submitted the lowest bid ever to supply electricity to customers in Chile — 2.91 cents per kilowatt-hour. That price is even lower than the 2.99 cents per kilowatt-hour recently recorded at an energy auction in Dubai. The average retail price of electricity in the US is 12 cents per kilowatt-hour.

“Solar power delivers cheapest unsubsidized electricity ever, anywhere, by any technology,” BNEF Chair Michael Liebreich, chairman of Bloomberg New Energy Finance, said on Twitter after this contract was announced.

Carlos Finat, head of the Chilean Renewable Energies Association (ACERA) told Bloomberg that the auction is “a strong warning sign that the energy business continues on the transition path to renewable power and that companies should adapt quickly to this transition process.” In this same auction, the price of electricity from coal was nearly twice as high.

Grid connected solar power in Chile has quadrupled since 2013. Total installed capacity now exceeds 1,000 megawatts — which is the most in South America by a large margin. But Chile is not tapping the brakes on solar power.  Another 2,000 megawatts is under construction and there are over 11,000 megawatts pending that have already received regulatory approval.

“With this auction, we can confirm that we are on the right path” in terms of energy policy, says Chile’s President Michelle Bachelet. “This is good news for Chileans’ pockets, for the environment and also for the economy.”

Chile is ideally suited to the development of solar power because its Atacama desert is “the region with the highest solar radiation on the planet,” according to the Inter-American Development Bank. So much solar is being built there that Northern Chile can’t use it all. The government and local utility companies are pushing to build new transmission lines to bring the available power to other sections of the country and export some of the excess to neighboring nations.

In the US, solar power is now competitive with natural gas and nuclear power and getting cheaper all the time, while the cost from those other suppliers is trending up. One of the biggest advantages of solar power is that it is not subject to large variations in price. Instead, it brings a degree of long term rate stability and predictability that other sources like oil, coal, natural gas, and nuclear cannot offer.

Source: Think Progress