Published on July 19th, 2015 | by Joshua S Hill18
First Solar–Funded Study: Utility-Scale Solar Much More Cost Competitive Than Rooftop Solar
July 19th, 2015 by Joshua S Hill
Originally published on Solar Love.
A new study has concluded that utility-scale solar PV systems across the US are “significantly” more cost effective than rooftop solar PV systems.
Specifically, the study, conducted by economists at global consulting firm The Brattle Group, found that utility-scale solar PV systems were more cost effective at achieving the economic and policy benefits of PV solar than rooftop or residential-scale solar was.
The study, Comparative Generation Costs of Utility-Scale and Residential-Scale PV in Xcel Energy Colorado’s Service Area, published Monday, is the first of its kind to study a “solar on solar” comparison.
“Over the last decade, solar energy costs for both rooftop and bulk-power applications have come down dramatically,” said Dr. Peter Fox-Penner, Brattle principal and co-author of the study. “But utility-scale solar will remain substantially less expensive per kWh generated than rooftop PV. In addition, utility-scale PV allows everyone access to solar power. From the standpoint of cost, equity, and environmental benefits, large-scale solar is a crucial resource.”
The study yielded two key findings:
- The generation cost of energy from 300 MW of utility-scale PV solar is roughly ½ the cost per kWh of the output from an equivalent 300 MW of 5kW residential-scale systems when deployed on the Xcel Energy Colorado system, and utility-scale solar remains more cost effective in all scenarios considered in the study.
- In that same setting, 300 MW of PV solar deployed in a utility-scale configuration also avoids approximately 50% more carbon emissions than an equivalent amount of residential-scale PV solar.
The Brattle Group also summarised the results of their comparison in a handy infographic:
The report itself was commissioned by American thin-film photovoltaic manufacturer and utility0scale developer First Solar with support from Edison Electric Institute, while Xcel Energy Colorado provided data and technical support. Specifically, the report examined the comparative customer-paid costs of generating power from equal amounts of utility-scale and residential/rooftop-scale solar PV panels in the Xcel Energy Colorado system.
A reference case and five separate scenarios with varying degrees of investment tax credit, PV cost, inflation, and financing parameters were used to yield the report’s results.
The specifics of the study’s findings, which imagined a 2019 Xcel Energy Colorado system, are as follows:
- utility-scale PV power costs ranged from $66/MWh to $117/MWh (6.6¢/kWh to 11.7¢/kWh) across the five scenarios
- residential-scale PV power costs were well up, ranging from $123/MWh to $193/MWh (12.3¢/kWh to 19.3¢/kWh) for a typical residential-scale system owned by the customer
- the costs for leased residential-scale systems were even larger and between $140/MWh and $237/MWh (14.0¢/kWh to 23.7¢/kWh)
- the generation cost difference between the utility- and residential-scale systems owned by the customer ranged from 6.7¢/kWh to 9.2¢/kWh solar across the scenarios
The authors of the report put these figures into perspective, including the national average for retail all-in residential electric rates in 2014, which were 12.5¢/kWh.