In fact Solar
causes Merit Order Effect which amounts to a wealth transfer from old outdated dirty polluters to all consumers.
A Fraunhofer Institute study found that thanks to
the merit order effect, solar PV reduces average German wholesale electricity prices around 10 percent and peak prices up to 40 percent.
What's behind this is something called the «
merit order effect.»
But coal and natural gas are suffering reductions in capacity factor as more fuel - free generation gets added to
the merit order effect.
The article discusses a proposal by The Essential Service Commission of South Australian (ESCOSA), to lower electricity prices, «by an average of $ 160 per household»; and ascribes the lower costs to the «
Merit Order Effect» of SA's plentiful renewables.
Welcome to
the merit order effect.
O'Mahoney, Amy and Denny, Eleanor (2011):
The Merit Order Effect of Wind Generation on the Irish Electricity Market.
(On the other hand, once wind or solar generation capacity is built, it tends to get used whenever it is available — something referred to as the «
merit order effect.»)
Yes, there is
a merit order effect with solar and no it does not drive the average cost of electricity.