The best of EcoWatch, right in your inbox. Sign up for our email newsletter!
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.
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.
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.”
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.)
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
EcoWatch Daily Newsletter
By Brian Barth
Late fall, after the last crops have been harvested, is a time to rest and reflect on the successes and challenges of the gardening year. But for those whose need to putter around in the garden doesn't end when cold weather comes, there's surely a few lingering chores. Get them done now and you'll be ahead of the game in spring.
By Bailey Hopp
If you had to choose a diamond for your engagement ring from below or above the ground, which would you pick … and why would you pick it? This is the main question consumers are facing when picking out their diamond engagement ring today. With a dramatic increase in demand for conflict-free lab-grown diamonds, the diamond industry is shifting right before our eyes.
(R) The measles virus pictured under a microscope. PHIL / CDC
The Pacific Island nation of Samoa declared a state of emergency this week, closed all of its schools and limited the number of public gatherings allowed after a measles outbreak has swept across the country of just 200,000 people, according to Reuters.
By Alison Cagle
Rising above the Arizona desert, the Santa Rita Mountains cradle 10,000 years of Indigenous history. The Tohono O'odham Nation, Pascua Yaqui Tribe, and Hopi Tribe, among numerous other tribes, have worshipped, foraged, hunted and laid their ancestors to rest in the mountains for generations.
Native Americans are disproportionately without access to clean water, according to a new report, "Closing the Water Access Gap in the United States: A National Action Plan," to be released this afternoon, which shows that more than two million Americans do not have access to access to running water, indoor plumbing or wastewater services.
By Nanticha Ocharoenchai
In the Czech Republic, horses have become the knights in shining armor. A study published in the Journal for Nature Conservation suggests that returning feral horses to grasslands in Podyjí National Park could help boost the numbers of several threatened butterfly species.