Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

And the Cheapest Electricity in America Is … Solar

Business

A Nevada utility and a solar developer have just struck a deal for solar electricity at a price that stands out compared not just to other solar deals, but also to just about any other option for new electricity. Here’s what it and other recent deals say about the future of solar.

Costs for large-scale solar projects dropped by 7 percent last year, and are down by way more than half since 2009. Photo credit: John Rogers

Bloomberg’s story on the Nevada deal opens with this (emphasis added):

Warren Buffet’s Nevada utility has lined up what may be the cheapest electricity in the U.S., and it’s from a solar farm.

“Cheapest” and “solar” aren’t words some folks might expect to see together in something coming out of a financial outfit like Bloomberg. But folks who have been paying attention to solar’s incredible recent price drops in recent years know that the times they are a-changin’.

Best deal in town NV Energy, part of Buffet’s Berkshire Hathaway company, is buying output from a project being developed by solar photovoltaic (PV) manufacturer First Solar at a price of 3.87 cents per kilowatt-hour (kWh). That’s probably a lower price than you’d get from just about any other source out there, except for wind or energy efficiency.

Utility leaders need to keep signing the contracts that keep getting us to ever-greater scales and ever-lower prices on solar. Photo credit: Sarah Swenty/USFWS

No doubt about it: this power purchase agreement (PPA) is a deal. A utility analyst at Bloomberg says it’s “probably the cheapest PPA I’ve ever seen in the U.S.” Note the lack of qualifiers: no “solar,” no “renewable energy.” Just “cheapest.”

Read page 1

And it’s clear that this deal, for 100 megawatts (enough for more than 15,000 households’ worth of electricity), isn’t a one-off. It’s part of a suite of recent deals that testify to how far solar prices have dropped:

  • Another 100-megawatt NV Energy agreement in the same utility proposal, involving a project developed by PV manufacturer SunPower, came in at 4.6 cents/kWh.
  • Just a week earlier, Austin Energy signed a deal for solar at under 4 cents/kWh.

On the solar resource issue, you can remind the naysayers that solar is actually much more widespread than they might think. Some might dismiss these deals by pointing to the sunniness of the states in question or the incentives (federal or state) that are buying down the cost. Don’t let ‘em.

On incentives, you can invite them to do the math on what it would cost even without the federal tax credit, for example (still under 6 cents for the lowest-cost ones). And have them look to see what solar is achieving elsewhere—5.85 cents/kWh in Dubai, for example. Or just get them to do the math on what fossil fuels like coal really cost.

Keep making it happen

And, while the sun might not be getting brighter, the future of solar certainly is. Costs for large-scale solar projects dropped by 7 percent last year, and are down by way more than half since 2009.

Even more importantly, maybe, is the fact that a big chunk of cost reductions depend not on dropping the costs of solar panels (which are way down already), but on building up local capacity to install (or approve) such systems. That build-up comes only with experience and installations. That price trajectory could lead some to think about waiting till prices come down even more, but that would be a mistake. Solar may keep getting better, but it’s a good deal now, and even more drops in costs aren’t guaranteed. (Neither is the future of the very successful federal tax credit.)

Photo credit: UCS, Solar Power on the Rise
We also need utility leaders to keep signing the contracts that keep getting us to ever-greater scales and ever-lower prices. These contracts are a driving force for the fierce competition in the solar industry.

So go forth—sign, build, thrive. And then repeat, repeat, repeat.

YOU MIGHT ALSO LIKE

‘Renewables Are Cheapest Energy Option’ When Fossil Fuel Subsidies Are Removed, Says REN21

Belize Joins Ten Island Challenge to Transition to 100% Renewable Energy

4 Ways the U.S. Can Rapidly Reduce Carbon Emissions and Grow the Economy

EcoWatch Daily Newsletter

A protest against the name of the Washington Redskins in Minneapolis, Minnesota on Nov. 2, 2014. Fibonacci Blue / CC BY 2.0

The Washington Redskins will retire their controversial name and logo, the National Football League (NFL) team announced Monday.

Read More Show Less
The survival tools northern fish have used for millennia could be a disadvantage as environmental conditions warm and more fast-paced species move in. Istvan Banyai / Wikimedia Commons / CC by 3.0

By Alyssa Murdoch, Chrystal Mantyka-Pringle and Sapna Sharma

Summer has finally arrived in the northern reaches of Canada and Alaska, liberating hundreds of thousands of northern stream fish from their wintering habitats.

Read More Show Less
A mother walks her children through a fountain on a warm summer day on July 12, 2020 in Hoboken, New Jersey. Gary Hershorn / Getty Images

A heat wave that set in over the South and Southwest left much of the U.S. blanketed in record-breaking triple digit temperatures over the weekend. The widespread and intense heat wave will last for weeks, making the magnitude and duration of its heat impressive, according to The Washington Post.

Read More Show Less
If you get a call from a number you don't recognize, don't hit decline — it might be a contact tracer calling to let you know that someone you've been near has tested positive for the coronavirus. blackCAT / Getty Images

By Joni Sweet

If you get a call from a number you don't recognize, don't hit decline — it might be a contact tracer calling to let you know that someone you've been near has tested positive for the coronavirus.

Read More Show Less
Aerial view of burnt areas of the Amazon rainforest, near Porto Velho, Rondonia state, Brazil, on Aug. 24, 2019. CARLOS FABAL / AFP via Getty Images

NASA scientists say that warmer than average surface sea temperatures in the North Atlantic raise the concern for a more active hurricane season, as well as for wildfires in the Amazon thousands of miles away, according to Newsweek.

Read More Show Less
A baby receives limited treatment at a hospital in Yemen on June 27, 2020. Mohammed Hamoud / Anadolu Agency / Getty Images

By Andrea Germanos

Oxfam International warned Thursday that up to 12,000 people could die each day by the end of the year as a result of hunger linked to the coronavirus pandemic—a daily death toll surpassing the daily mortality rate from Covid-19 itself.

Read More Show Less

Trending

The 2006 oil spill was the largest incident in Philippine history and damaged 1,600 acres of mangrove forests. Shubert Ciencia / Flickr / CC BY 2.0

By Jun N. Aguirre

An oil spill on July 3 threatens a mangrove forest on the Philippine island of Guimaras, an area only just recovering from the country's largest spill in 2006.

Read More Show Less