by Stephen Lacey
January 13, 2016

What happens when you put a lot of solar and wind on the grid all at once? It may knock out some dirty fossil generation, but it could also knock itself out -- economically speaking, at least.

That's due to the "value deflation effect." Without storage, a resource like solar needs to dump all its generation on the grid when the sun is out. With enough PV on the grid, that could depress wholesale prices during the middle of the day and cut the revenue that solar projects earn. Under that scenario, economists warn that every incremental solar system added to the grid is worth less than the previous one.

In this episode of the Interchange, we'll talk about this phenomenon with Jamie Mandel of the Rocky Mountain Institute. He'll describe why he thinks the assumptions underpinning this analysis are too simplistic. 

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Recommended reading:

3 Ways Renewable Energy Can Grow in a 21st Century Grid

The Interchange: How Cheap Can Solar Get?

The Economic Limitations of Wind and Solar