Quantcast
Business

And the Cheapest Electricity in America Is … Solar

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

Show Comments ()

EcoWatch Daily Newsletter

Sponsored
Science
The Ross Ice Shelf at the Bay of Whales. Michael Van Woert, NOAA

Scientists Study Ice Shelf by Listening to Its Changing Sounds

By Marlene Cimons

Researchers monitoring vibrations from Antarctica's Ross Ice Shelf were flabbergasted not long ago to hear something unexpected—the ice was "singing" to them. "We were stunned by a rich variety of time-varying tones that make up this newly described sort of signal," said Rick Aster, professor of geosciences at Colorado State University, one of the scientists involved in the study.

Keep reading... Show less
Politics
DSLRVideo.com / Flicker / CC BY-SA 2.0

'Go Out and Vote' Patagonia Endorses Candidates For First Time in Its History

Outdoor brand Patagonia is endorsing candidates for the first time in its history in an effort to protect the country's at-risk public lands and waters.

The civic-minded retailer is backing two Democrats in two crucial Senate races: the re-election of Sen. Jon Tester of Montana; and Rep. Jacky Rosen, who is trying to unseat Republican Sen. Dean Heller in Nevada.

Keep reading... Show less
Animals
Desert Bighorn Sheep in Joshua Tree National Park. Kjaergaard / CC BY 3.0

Leaked Trump Administration Memo: Keep Public in Dark About How Endangered Species Decisions Are Made

In a Trump administration memorandum leaked to the Center for Biological Diversity, the U.S. Fish and Wildlife Service is directing its staff to withhold, or delay releasing, certain public records about how the Endangered Species Act is carried out. That includes records where the advice of career wildlife scientists may be overridden by political appointees in the Trump administration.

Keep reading... Show less
Popular
Disposable diapers add staggering amounts of waste to landfills. Pxhere

Dirty Diapers Could Be Recycled Into Fabrics, Furniture Under P&G Joint Venture

Disposal diapers can take an estimated 500 years to decompose. That means if Henry VIII wore disposables, they'd probably still be around today.

Although throwaway nappies are undoubtedly convenient, these mostly-synthetic items cause never-ending steams of waste that will take centuries to disappear.

Keep reading... Show less
Sponsored
Popular
The swelling barrier lake after a landslide forced evacuations along the Yarlung Zangbo River. YouTube screenshot / CCTV+

6,000 Evacuated After Tibet Landslide

Six thousand people have been evacuated after a landslide in Tibet Wednesday blocked a river that flows downstream into India, creating a lake that could cause major flooding in the subcontinent once the debris is cleared, The Associated Press reported.

Chinese emergency officials announced the evacuations Thursday. The landslide impacted a village in Menling County, but no one was killed or injured, Chinese officials said.

Keep reading... Show less
Climate
Pexels

Carbon Capture: What We Don’t Talk About When We Talk About Climate Change

By Daniel Ross

The latest Intergovernmental Panel on Climate Change (IPCC) report lays out a rather grim set of observations, predictions and warnings. Perhaps the biggest takeaway? That the world cannot warm more than 1.5 degrees Celsius (1.5°C) over pre-industrial levels without significant impacts.

Keep reading... Show less
Sponsored
Climate
Fossil-fueled power plant. glasseyes view...up&away / Flickr / CC BY-SA 2.0

Trump Team Again Asks SCOTUS to Stop Youth Climate Case as Trial Nears

Once again, the Trump administration has asked the U.S. Supreme Court to halt a groundbreaking constitutional climate lawsuit brought by 21 youth plaintiffs, just over a week before the case heads to trial in Eugene, Oregon.

On Thursday, the Department of Justice filed a second "writ of mandamus" petition— an uncommonly used legal maneuver—and application for stay with the high court.

Keep reading... Show less
Health
Mark Miller Photos / Photolibrary / Getty Images

Trump White House Pushes to Let Minors Spray Brain-Damaging Pesticides on Farms

The White House's just-released list of planned environmental and public health rollbacks includes letting high-school-age kids spray brain-damaging pesticides on commercial farms.

Keep reading... Show less
Sponsored

mail-copy

The best of EcoWatch, right in your inbox. Sign up for our email newsletter!