Air Quality

Published on July 1st, 2014 | by Cynthia Shahan


Residential Solar Cheaper Than Grid Electricity In 25 States By 2015, Utility CEO States

July 1st, 2014 by  

Solar is simply not new. What is new, however, is very cheap solar panels. These low prices incentive renewable energy empowerment. Solar can now succeed using well-merited competitive values.

In fact, solar is cheaper than electricity from the grid for tens or even over a hundred million Americans.

Rooftop solar PV installers

Image Credit: Solar panel installation via shutterstock

Green Car Report’s John Voelcker agrees further expounds on the matter:

Solar power for your home has been around a long time, but for many homeowners, it’s required subsidies, special financing arrangements, and still delivered long payback periods.

That’s changing fast, according to the CEO of a major Texas electric utility.

David Crane, who runs NRG Energy, says that in fully half the states of the union, electricity from residential solar panels will be cost-competitive with that delivered by local electric utilities by next year.

Another important matter is that electric vehicles will enable a more decentralized, self-sufficient energy system. John writes: “Once homes can not only generate but store energy, it’s at least possible they could decouple from the grid entirely–meaning they’re lost to their local utility forever.”

Crane is a rare utility head focused on shifting his company (constructively) toward a solar power future. He acknowledges that customers will increasingly be interested in disconnecting from the grid with their own solar and storage systems (as well as other distributed energy systems). How can NRG Energy keep its business? By leading the way into solar and storage offerings.

“Crane is positioning NRG to be the supplier of solar arrays, fuel cells, and microturbines to power customers in this age of grid obsolescence,” Navigant Research writes. “It’s remarkable to see a utility betting on the grid’s eventual obsolescence, but it’s important to note that within that framework, NRG is still maintaining its core business as a power provider.”

Betting the house on one future often isn’t wise. Crane and NRG Energy aren’t doing that. But many utilities still are when they bet on a future of business as usual.

John closes: “it’s clear that Crane wants NRG Energy to evolve beyond its traditional generation-and-distribution model, even if it cannibalizes existing businesses.”

My note for Crane and others such as him — please do cannibalize all and any business models related to toxic fuel use and fossil fuels. Cannibalize away. Out of sight. Never to see — or worse, smell — again.

The key these days, however, is awareness. Hundreds of millions of people may benefit from cheap solar power, but who knows that?

Of course, here on CleanTechnica, we’ve been making the point for years. Here’s a quote from 2012: “Many decision-makers have yet to catch up with the improvements in the economics of solar power from recent reductions in the cost of the technology, a working paper released by [Bloomberg New Energy Finance] said today.”

And, at that time: “In the past 3 years, solar power has grown four-fold. With this and also largely because of this, solar panel prices have dropped about 75% in that time. If you happened to check solar prices 4 years ago but not since then, that means you’ve got a pretty warped sense of the price of solar.”

The trend has only continued.

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is a Mother, an Organic Farmer, Licensed Acupuncturist, Anthropology Studies, and mother of four unconditionally loving spirits, teachers, and environmentally conscious beings who have lit the way for me for decades.

  • Stan Hlegeris

    Just to make it perfectly clear for Australians: we’re already there, way ahead of the Americans. No matter how you analyse it, electricity produced by a new, full retail price PV system is way cheaper than grid electricity. Because:

    1. The retail price of grid electricity here in Oz is much higher than in the U.S.

    2. The cost of installing solar PV in Oz is way lower, thanks to the bizarrely high “soft costs” (permits and such) which afflict American PV buyers.

  • JamesWimberley

    American consumers get just about the cheapest unsubsidised electricity in the world. (Indian peasants pay less, but they often don’t get the electricity.) Americans also pay above-average solar installation prices because of the Byzantine complexity of local and state regulations and incentive schemes. In other words, solar energy is below residential grid parity for the majority of the world’s population.

    • Ha, good point. 😀

    • Adrian LeCesne

      So you’re saying that the price is reaching grid parity before the application of tax credits or after? Also, what are the these utilities charging the PV operators for maintaining the power lines and backup generation, which otherwise is figured into rate base? Here’s to hoping for a smart gird;)

      • jeffhre

        If I pay $4000 for a system vs $75 a month for grid electricity how do I measure grid parity?

        In 5 years and six months I will have free electricity, based on marginal costs and excluding opportunity costs of the $4000 expenditure. Is that grid parity?

        If I get a 2.9% loan to pay for the $4000 solar system, I will pay $38.44 a month for ten years, with nothing down. Then based on marginal costs, I will have free energy – is that grid parity? I will also get 30% of the cost back from tax benefits, until it is phased out.

        If I install a solar system, with an identical home, that I am planning to build, the panels, inverters, meters, cables and labor would cost about $2500. And the remaining system costs would be incidental to building, permitting and wiring the homes residential electrical supply system.

        I can then amortize the added costs with a 30 year home loan at 3.6%. I would pay $11.37 a month of my total home loan, for my solar system costs, instead of $75 a month to a utility company which has average yearly price increases of 3%. Is that grid parity?

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