Published on July 10th, 2015 | by Nicholas Brown52
Price of Solar Hits Record Low Again!
July 10th, 2015 by Nicholas Brown
Originally published on Kompulsa (some edits).
NV Energy, a Berkshire Hathaway-owned utility company, has signed a PPA to purchase electricity from the 100 MW Playa Solar 2 power plant at a stunningly low price of $0.0387/kWh!
CleanTechnica just reported on “the world’s cheapest solar” landing in Austin, Texas, with bids under 4 cents/kWh (and the assumed unsubsidized price of solar thus being below 5.71 cents/kWh), and that was incredible news, but it looks like that staggering news wasn’t even the highlight of the month!
Note that 3.87 cents/kWh is approximately 68% cheaper than the national average electricity price. I’s also well below the low levelized cost of electricity of coal, natural gas, or nuclear, according to Lazard. The only electricity generation option that can compete with that is wind energy. Furthermore, it’s much lower than the low of 6 cents/kWh that Lazard was predicting for solar in 2017, even if you add in the expected federal subsidy boost (which brings the price up to 5.53 cents/kWh).
“That’s probably the cheapest PPA I’ve ever seen in the US,” Bloomberg Intelligence utility analyst Kit Konolige said. “It helps a lot that they’re in the Southwest where there’s good sun.”
Certainly. More sunlight translates to more power per solar panel, resulting in a lower cost per kWh.
The growth of the solar industry contributes to the price decline we’ve been seeing over the years. The declining cost of solar PV technology certainly helps too. If solar panels get extremely cheap (and at this rate, that might happen), that makes the idea of purchasing extra solar panels to compensate for cloudy weather (as opposed to energy storage or gas backup) more attractive.
Ian Clover from PV Magazine noted:
“Having paid $0.1377/kWh for renewable energy in 2014, this new, lower price is an encouraging reflection of the rapid decline in solar costs over the past 12 months. Nevada’s Public Utilities Commission, which oversaw the submission of the 20-year, fixed-rate PPA, called the price point ‘very reasonable’ when compared to both existing solar contracts and other fossil-driven generation sources.”
The cost of solar power will continue to decline across the nation as older solar power plants are upgraded or replaced with the newer, cheaper panels from First Solar — the supplier of the solar panels for this record-cheap solar power plant — and other manufacturers. Doing this will help solar power plant owners to stay in the game and compete with not only the fossil fuel plants, but also the renewable ones. The future of solar is glowing!