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Published on July 12th, 2016 | by Susan Kraemer

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Solar Already Beating Gas On Price, & More — Why Natural Gas Is The Next Fossil Fuel To Go

July 12th, 2016 by  


Secrecy about the price that California utilities pay for natural gas contracts is a new sign that PV has now passed market price parity at wholesale (as well as at retail: for rooftop customers).

keep it in the ground

Image Credit: Ilias Bartolini  via Flickr

The utility-scale solar industry used to have to compete against a “Market Price Referent” (MPR: the cost of an average natural gas contract). The idea was that, if a solar PPA could be priced at the same or less than a typical natural gas PPA, then it was considered competitive. Utilities in California are required by regulators to choose the cheapest option in contracting for electricity.

The MPR back then, in California, was 9 cents a kWh. Beating that price with 2009-era solar was a struggle, but prices dropped so fast as more solar was deployed that, if the MPR were still being used, it would appear that solar would simply beat gas on price.

Now that solar PPAs are being signed at less than half that old MPR, all of a sudden it is quite difficult to find any MPR or any gas PPAs to compare prices. MPR figures are no longer used in comparing solar to natural gas.

→ Related: Renewables = 99% Of New Electricity Capacity In Q1 2016 In USA (CleanTechnica Electricity Reports)

Solar at 4 Cents per kWh Beats Gas

In the US, First Solar, SunPower, and several other key utility-scale players have been building utility-scale solar in the 4 cent range since 2015. Even smaller municipal utilities have been able to procure solar at 4 cents a kilowatt-hour (for example, the city utilities of Austin and Palo Alto).

To be fair, comparing solar PPAs to natural gas PPAs is comparing apples to oranges.

When a utility signs a Power Purchase Agreement (PPA) for a renewable source like solar that has no fuel cost, the utility simply pays a pre-agreed rate per kilowatt-hour for the next 25 years.

The way that gas contracts are paid is completely different.

Mike Jacobs, who leads regulatory reform of electricity markets as senior energy analyst at the Union of Concerned Scientists, had a good analogy. He likened payment of a natural gas contract to the way you rent a car, where you pay one daily rate to have the car available to you, but on top of that, you also buy gas to run the car every day.

“The same way as cars are rented, in fossil fuel contracts, there is the set daily rate for the machine, and on top of that there is an unknown variable: the price of natural gas over the 20 year contract,” Jacobs told CleanTechnica. “Because of the unpredictable aspect of natural gas prices, that fuel cost is usually reimbursed after the fact by ratepayers.”

This after-the-fact reimbursement by ratepayers of the final actually-paid natural gas prices is a very murky area of natural gas contracts. Essentially, the utilities ask regulators for reimbursement by ratepayers, but as a part of a bundle that is part of a much larger reimbursement package. Insiders say that it is not easy to discern what actual price was paid for natural gas.

As a result, it is easy to obfuscate the total cost ratepayers pay for natural gas–fired electricity.

Nancy LaPlaca, principal of energy consultancy LaPlaca & Associates, told CleanTechnica: “If we don’t have someone really looking at this stuff, it’s very easy for the utility to hide a lot of costs and to stick it in rate base, because rate bases are extremely complex. Frankly, I don’t think anybody really even knows what’s in there.”

After many inquiries of the three utilities and the California Public Utility Commission, I discovered that the “machine” cost is also not public. At first, I was told that there is a three-year privacy protection, but even older gas contracts turned out not to be publicly available, unlike solar PPAs which frequently are public the week they are signed.

With natural gas, the “machine” price might now actually be higher overall than solar; but on top of that, there is no certainty that the daily varying price of each gas BTU will stay at today’s rock-bottom price. Natural gas fuel currently goes for under $3 per million BTU. This results in per-kWh rates — for fuel — of under 3 cents — not including the fixed cost.

But the combined (fixed and variable) price of gas can be inferred by the reaction of utilities to the new solar prices.

“Utilities figure that just for the next hour, natural gas is two to three cents, and that’s just for fuel only: that’s with no payment for the machine,” Jacobs said.

“So when you walk in the door and say 3 cents/kWh for your PV — and that is the guaranteed rate for 20 years! To a utility, you don’t understand how big a deal that is.”

Underground natural gas storage

Image Credit: EIA

Another consideration for utilities, as they compare solar or gas contracts, is the newly revealed risk of gas leaks from pipelines or underground storage.

Gas Leaks a PR Nightmare

Gas-fired electricity has two economic risks: the unknown future fuel cost compared to one-price solar, and the risks when storing large volumes of natural gas underground near population centers.

Aliso Canyon woke the general public to a nightmare scenario. Because natural gas–fired power plants are near cities, the fuel is stored in close proximity to large population centers. Natural gas must be contained in gigantic caverns under the ground.

When Aliso Canyon blew a leak in 2015, which peaked at more than 60,000 kilograms per hour, more than 8,000 residents had to be relocated for their immediate safety at SoCalGas’ expense. Residents have sued. The relocation cost is now estimated to top $665 million.

Barium sulfate and other metals — used in well drilling and forced down wells to stop leaks — have contaminated curtains, sofas, bedding, and carpets in the homes in the area. So there will be more cleanup costs in addition to the relocation costs.

Storing large volumes of natural gas underground close to population centers is unavoidable if you choose to burn gas to make electricity.

When the population of Southern California was much lower, natural gas was stored in large holding tanks. But by the early 1940s, SoCalGas had to switch to underground storage.

SoCalGas now has four large underground caverns created by what is left behind after an oil field has being hollowed out by oil extraction. Natural gas is stored underground in 326 depleted oil fields nationwide, as well as in 31 salt caverns and 43 aquifers.

Surprisingly, the EIA brought attention to the dependency on this weak link in natural gas infrastructure with a rare warning: Natural gas leak at California storage site raises environmental and reliability concerns.

“Energy companies, system operators, and government officials are also interested in the leak’s potential reliability implications during the upcoming periods of high natural gas demand (this summer, next winter), and in identifying possible actions to mitigate any reliability concerns. It is not yet clear how much storage capacity will be available at the Aliso Canyon facility, and in what timeframe, once the leak is stopped.”

So, Aliso Canyon woke the EIA to a new weakness in the infrastructure needed to support natural gas–fired electricity; economic risk.

Inside Climate News noted that there is a high risk of future Aliso Canyon disasters due to the wear and tear on this aging oil-field infrastructure. Just this week, PG&E has shut down another underground storage site that has sprung a leak, albeit not on the same scale.

This double economic risk may even be starting to give California utilities pause.

In describing a future energy supply of renewables with storage, the chief development officer at SDG&E, James Avery, told the Energy Storage North America conference in San Diego:

“I see a future where there will be no more gas turbines.”


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About the Author

writes at CleanTechnica, CSP-Today and Renewable Energy World

She has also been published at Wind Energy Update, Solar Plaza, Earthtechling PV-Insider , and GreenProphet, Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American.

As a former serial entrepreneur in product design, Susan brings an innovator’s perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times. 
 
Follow Susan on Twitter @dotcommodity.



  • Wayne Williamson

    Sounds like they need to get back to using the large holding tanks and factor that into the cost.

  • sjc_1

    Natural gas will be used in massive quantities for decades.

    • Bob_Wallace

      Maybe, probably not.

      • sjc_1

        The U.S. uses 250 billion therms of natural gas per year, with NO end in sight. If you add up Europe and Asia, as long as natural gas is available and cheap it WILL be used in great quantities for decades to come.

        • Bob_Wallace

          Two decades, probably.

          Four decades, unlikely.

    • Matt

      I think it is really hard to say what the market will look like in 2035-2045. That is only today plus 20-30 years. Things go very slow and then you hit a tipping point and then when you look back it is like it happen over night. Wind/PV/EVs/storage and public view of climate change have or are coming up on those tipping points. We are in the old Chinese curse “May you live in interesting times”. But then again it depends on what you mean by massive. Five percent of what the world uses today is a massive amount.

      • Bob_Wallace

        I’m willing to guess that during that 2035 – 2045 window we will hit or get very close to zero CO2. Especially from electricity generation and personal transportation.

  • neroden

    Thanks for the research into the history of MPRs and all that. Not something I knew about.

  • Roger Pham

    It is best to use intermittent energy sources like Solar and Wind for transportation. For example, a 2-meter x 4-meter solar PV panel on top of each car port of each car at work can produce 1.2 kW on average during a 5-9 hours of sunlight per day. This should produce about 6-11 kWh of energy a day, enough for commuting.

    There will be NO grid connection for charging from the grid, in order to save on the extra investment expense of up to $2,000 per kW for grid’s power generation and transmission. Thus, solar energy WITHOUT the requirement for Natural Gas (NG) power backup. On a string of low solar days, the cars are either long-range BEV that can be charged from home, or PHEV that can use a backup source of energy.

    Since solar PV panel mounted on top of car ports may be a little bit more expensive than utility solar PV mounting, the cost per kWh may be a little more, so instead of 4 cents per kWh, may be 5-6 cents per kWh, but still cheaper than average grid electricity at 13 cents per kWh.

    Now, what to do with the weekends when few to no cars are charged at work?
    1) Well, if a low-cost utility flow battery that has low enough cost per kWh of capacity is available, this weekend-solar-surplus can be saved and used for rainy days with great cost-effectiveness.
    Long-range BEV can top-off with those week-end solar-surplus on Friday Evening for extended weekend driving, thus can run on nearly 100%-RE (Renewable Energy)
    2) Also, Hydrogen can also be made from those week-end solar surplus for Plug-in FCV’s (PFCV) to fill-up on Friday evening right after work, for weekend extended driving that may exceed the capacity of the battery pack on board.
    3) Wind energy can also be use to charge those utility flow batteries to permit 100% driving on RE by long-range BEV’s, and to power those electrolyzers to power PFCV’s to make up for lost of solar power on areas and seasons of less-reliable solar output.

    The days of driving with 100%-RE are almost here!
    Need the help of Solar City for making those at-work car-port solar PV charging happens.
    Need the help of Tesla for bringing long-range BEV’s to the mass of commuting motorists.

    • fairfireman21

      So now every car has a carport, and everyone can afford a solar carport.
      Here you go more dreams.

      • Roger Pham

        Good point you’re bringing this up, fairfireman21, since Plug-in EV’s parked in parking garages can also be charged from purely RE, and not needing a car port for pure RE charging.
        The charging circuitry to the parking garage just has to make sure that non-RE will not be used to charge EV. In this way, any growth in RE capacity does not have to be matched by the same growth in fossil-fuel power plant to back up intermittent new RE capacity growth, thus keeping RE investment cheap and high profit margin for investors.

        The engine or FC in the PHEV and PFCV, and the large battery pack in the long-range BEV can act as backup power source for the intermittent RE sources. Since these are already available at no extra cost, intermittent RE energy can be cheap when no FF backup power plants, nor expensive e-storage necessary to provide 24/7 electricity supply that a grid consumer would demand.

      • sjc_1

        Without dreams, we would still be in caves.

        • fairfireman21

          No without good advancement we would be.

      • Frank

        It doesn’t matter whether it’s a carport or not. What is important is the plug at wherever people drove to in the morning. California solar hit 8GW output the other day, up from about half that 2 years ago. Those numbers are rising. Electricity prices are going to head way down during PV hours. Makes no difference who owns it.

        • fairfireman21

          Did I ever say it was bad?
          Nope.
          Roger says it is defined statement there.
          I am all up for whatever produces renewable energy.
          Unlike him I see the world as it is and not as I “wish” it to be.
          His RE to H2 is a good idea just not for transportation fuel.

    • Bert

      I’ve noticed that you like to talk a lot about what will happen in your ideal world, but very little about how we will accomplish it. For example:

      “There will be NO grid connection to prevent charging from the grid, in
      order to save on the extra investment expense of up to $2,000 per kW
      for grid’s power generation and transmission.”
      Please answer these questions about how we will get from point A (almost everyone has a grid connection).
      1) How are you going to convince the auto companies to just up and drop a style of vehicle that people would desire?
      2) How are you going to deal with the political sh*tstorm that would be bound to hit if your plan was somehow approved?
      3) How do you expect people to get transport in an emergency situation if they can’t even connect to the grid? What if it’s not life or death, but only something like: “I drove a lot today, will the solar panels give me enough juice to get to work tomorrow or not?”
      4) Let’s clarify the most important question. Who are the people necessary to the success of your plan, and how do you plan to get them on board?

  • In addition to the fuel cost volatility, risk of storage, generation of electricity via natural gas also loses 3/4 gallon precious water/kWh to evaporation, subject to pipeline failures from storage to combustion point, and incurs significant annual recurring Maintenance costs…..utilities pay some of the highest wages(AZ highest of all industries), essentially labor costs,which escalates their cost-calculation of profit…while PV has none(included in the PPA/SSA price)…

    Radiant energy rich AZ CPP includes plans to add 30% NG generation, remote generation requiring additional transmission, energy loss costs….

    Not surprising as it APPEARS likely that 3 of our 5 Commissioners election campaigns were funded by one of the utilities they regulate…one regularly uses, sees no problem with the appearance of impropriety, Commission equipment paid for by ratepayers to communicate with Utility executives regarding “personal” matters, sporting events, etc.,

    • Neglected to mention the huge predictable increases in natural gas costs during the life of the generating asset, likely stranding, charge off to ratepayers….Asia,China markets pay 5x NA pays for NG, doesn’t cost a lot to liquefy-transport-liquefy and make much greater profit margin…..like petroleum, our NG marketeers will export-sell to those markets, which will increase NA costs….

      • Matt

        OZ saw their NG price jump when they open there large export ports. USA currently does not do this, but you notice a lot of GOP pushing to allow it to help our friend in Europe. Of course their NG friend here want a couple $B hand out to get started.

  • Mike333

    Find yourself a Good Non-Carbon ETF, NOW. I’m into SPYX. This is not a day trading ETF. This is a long term investment ETF, with low expense ratios.

    These companies will either morph into Solar and Wind, or go bankrupt.

  • NRG4All

    So much of the future of eliminating all fossil fuels for electrical generation will depend on storage of electricity to even out wind and solar, day to night, summer to winter.

    • Bob_Wallace

      Probably not summer to winter, in any significant amount. Actually when our supplies are the most stretched are on hot summer days and we can deal with that by adding more solar.

      Solar and wind are becoming so inexpensive that it will often make sense to overbuild than to store. Especially store over long periods of time (months).

      • NRG4All

        This probably would not eliminate the problem completely, but I’ve often thought that having some percentage of PV panels facing west would help to soften the peak in the late afternoon. As you mention, with the cost coming down that may be more feasible now.

        • Bob_Wallace

          Absolutely. A good hunk of all panels should face west and a smaller portion should face east. The small (~10%) of electricity lost would be far more than compensated by a longer solar day.

          Solar farms are doing this by using trackers. They face all their panels to the east in the morning and then track the Sun until it falls to the horizon. With tracking solar farms are getting almost 30% CF numbers in areas that would be about 22% with a fixed mount.

          But tracking is not practical for roof-top mounting. If an appreciable amount of our solar comes from roof-top we’d probably be better off with spreading the direction around some.

          Plus, for those who might not want to mount panels on the street view of their house they could mount east or west and just add an extra 10% in panels. Keep their aesthetics undamaged and have solar too.

          • Matt

            Or those that live in a development with a HOA that does not like solar. I been fighting for years to change HOA by laws to allow any PV. Let along on the street side. It is left over from the builders adding restriction in the 70s when their where large solar thermal system that stuck 4 feet out from roof. No one makes those now, except for flat roof. But builders don’t want to pay a lawyer to update their standard HOA rules they start with.

          • Wayne Williamson

            Nothing wrong with solar thermal. The rules should be changed to allow both. In Florida, a lot of houses have the thermal for heating their pools, although I don’t think they are being used much anymore due to the maybe two months of the year that might need heating. Come to think of it, they can probably run at night and cool the pools for the other 10 months.

          • Frank

            I don’t have solar pannels on my roof yet, but I want mine facing the street, and not just because it’s South. I want people to see it. It’s cooler than a big 4wd truck.

      • Matt

        Can anyone point to any large grid that did not use overbuilding of generators (source) as the main leg in have a stable grid. So we should not hold overbuilding of solar/wind as a negative of RE it is SOP of all generators.

        • eveee

          The current conventional grid does exactly that. We have enough generation on hand to produce 120% of the peak demand in summer all year round. Nobody is complaining about that. With a demand profile that reaches a 4am Spring low one quarter of the 4pm Summer peak, it’s inevitable that any power system without significant storage must have overcapacity regardless of type. And it must also have flexible generation.
          https://c1cleantechnicacom-wpengine.netdna-ssl.com/files/2015/12/daily-demand-new-england-iso.jpg

  • Bob Nickson

    From the article: “Natural gas fuel currently goes for under $3 per BTU. ”

    Not factually wrong. Natural gas does indeed go for under $3 per BTU, but it even goes for under $0.000003 per BTU.

    • Kevin McKinney

      Hey, what’s a few zeros–nothing, right? 😉

    • sjc_1

      It is under $3 per million BTU, which makes it less than 30 cents per therm, which is 100,000 BTU.

  • Bristolboy

    Also worth considering gas prices have increased from their recent lows (Feb 2016) since the supply had decreased as a result of it not being economic to drill. John Kemp (Reuters) today agreed with many industry experts who expect such price increases to continue.

    This will therefore help solar and wind compete.

    • Epicurus

      Right, as drilling slows down or stops, natural gas prices will continue to rise which will make solar even more attractive. Shale gas is expensive to drill. Solar keeps getting cheaper. The writing is on the wall.

      • Hazel

        Not to mention, as more renewables come online, natural gas capacity factors decline, increasing the rate paid per kWh as consumers pay for a lot of idle turbines. That’s exactly why the utilities are so eager to hide that information.

        If this information becomes public, then you get a storage-induced natural gas death spiral: increasing cost/kWh of natural gas electricity, wholesale price for electricity storage increases, more battery and other storage gets deployed, more natural gas capacity gets idled, increasing the cost/kWh of natural gas electricity further. Not to mention that battery storage cost continues to decline…

        • Epicurus

          “. . . increasing the rate paid per kWh as consumers pay for a lot of idle
          turbines. That’s exactly why the utilities are so eager to hide that
          information.”

          Good point. Another reason utilities are hostile to renewables.

          How nice it would be if utilities thought about air quality and climate change instead of their own short term financial well being. So much for the “invisible hand.”

      • Bob_Wallace

        Solar and wind PPAs are attractive to utilities because they lock in a price for 20 to 25 years and help protect utilities from volatile gas prices.

        • Epicurus

          How long will natural gas be around as a dispatchable resource?

          • Bob_Wallace

            That’s a question almost impossible to answer. It depends on use rate.
            I expect we’ll see storage taking over the 1 to 3 day cycle business in a few more years. $100/kWh storage should push NG into a deep backup role. Batteries are already taking over the grid-smoothing business. If batteries do most of the role NG has been playing then NG as a deep backup option might be around for over a century.

            We could also see methane from waste and sewage streams reducing our NG consumption. That would also stretch the supply out further.

          • John Norris

            $100/kWh? As you say, a few more years…

            “Grid-scale batteries have seen prices for delivery in 2016 sit at around $400/kWh to $500/kWh, and IHS is expecting a further price reduction of 30% over the next 18 months.”

            http://cleantechnica.com/2016/07/13/pipeline-grid-connected-energy-storage-projects-reaches-2-gw-says-ihs/

          • Bob_Wallace

            Panasonic/Tesla should be at $100/kWh by 2020. And they’ll take other manufacturers with them.

            Grid storage batteries should be cheaper than EV batteries. They don’t have the same weight/volume needs.

            “$100/kWh” means battery cell prices, not total system prices including profits. Getting total system prices to $300/kWh would mean being able to do daily cycling for about $0.05/kWh, including finance cost. (70% of $400 is $280. 70% of $500 is $350.)

            Storing 3 cent wind for 5 cents would knock a huge hole in NG use. Using those same batteries to move mid-day sunshine into the evening would enlarge the hole.

          • James Tyrer

            You must be using the wrong units, or talking about the price of a battery, which is not the cost of storage. The goal for the cost of grid scale storage is < $0.01/kWh (the cost of storing a kWh of electricity). The price of a battery doesn't take into account its life.

          • neroden

            Biogas (landfill gas, for instance) should be availabe indefinitely. It’s not a large supply, but it’s plenty for the 1% of times when there’s a coordinated week-long lack of solar or wind.

          • Epicurus

            How does one collect gas seeping from a landfill?

          • Bob_Wallace

            From a landfill – stick collection pipes into it.

            http://beginwiththebin.org/images/innovation/landfill/landfill_large.jpg

            It’s not cow farts, it’s belches. We won’t collect that. People are working to lower the amount.

          • Epicurus

            H2S in landfill gas. I never would have guessed that. Very dangerous stuff.

          • Ross

            Hydrogen Sulphide produced naturally from seaweed too

            http://www.azula.com/beach-smell-toxic-seaweed/

          • Matt

            Since fires cause by old landfills with building built on them were a problem in the past; most land fills (at least newer ~20yrs) in developed countries do have caps and at least flare the gas, many(most?) larger land fills capture the gas as in Bob’s picture. Bio-digester for cow manure (or chicken/pig/people) have been around for decades. They are not used much for two reason, both around setup costs. On farm or feedlots the externals of just letting it leak into the ground water or stream means is zero so ….
            For people’s it is conservative people running the facility that have not thought of turning shit into a cash source. Yes, I know there are lots of them out there, but as a % of total location or total waste stream it is still small. Before the mega drought in the US West feed lots were a major source of water pollution and cost cities more to make the water drinkable.

          • Bob_Wallace

            Looks like there are about 250 bio-digesters running on livestock farms/feedlots with a few more under construction.

            https://www.epa.gov/agstar/livestock-anaerobic-digester-database

          • Epicurus

            Is there enough gas in landfills to ever pay out the cost of the wells and production equipment?

          • Ross

            Think it’s farts & belches.

          • Bob_Wallace

            Belches =~ 95% of emitted methane.

          • Bob_Wallace

            Got numbers?

            I’ve never seen anyone work through the math.

            I suspect we’ll move to a system where garbage is sorted into recyclables and compostables with far less material going to landfills. The compostable material will likely go into a bio-digester where the methane will be collected.

            I need to look for updates on the progress made with trash sorting robots.

  • Brunel

    Have coal power stations been getting cheaper over the last 20 years?

    I think in 1997 in rural Victoria, power retailed for A$0.13/kWh.

    • Coal article coming shortly … in midst of writing it. Will see what I can find on prices.

      • Be sure to include total costs paid for by ratepayers AND ratepayers as taxpayers…..due to toxic emissions coal plants must be located remote from population centers; requires expensive transmission infrastructure that incurs 8% energy loss requiring additional capacity/cost to replace; mature Federally SUBSIDIZED technology only captures 30% of the energy released when coal combusted; cost of harmful emissions requiring Federal action to remedy(taxpayer cost) and Environmental Compliance Adjuster surcharges, Fuel surcharges, and the 100-50x more cost to develop new water sources( Choose how you want to use it,growing populations; human consumption? Agriculture/food? or to generate electricity(While we have other lower cost sources for life of investment asset)?

      • Brunel

        Copies of old power bills?

        Maybe someone could get old power bills from a coal-burning state.

      • Zach, I understand(?) that in Texas/ERCOT, coal is not competitive with other sources, so is not getting any bids; accelerating obsolescence, stranding….even just a regional competitive market illustrates the beneficial “power” of competition vs. regulated markets(Obsolete conventional rate design; Cost plus profit calculated as a percentage of the inflated costs). Didn’t Peabody(Coal) file for Ch.11?

  • JamesWimberley

    The 3c/kWh Susan quotes is surprising. The best US PPAs I had read about before were in the area of 6c. The lowest bid on record anywhere is 2.99c in the Gulf, with ideal sun. Can you cite sources for 3c in California?

    • Matt

      The city council of Palo Alto, California, has just approved a power purchase agreement with Hecate Energy for $36.76 per megawatt-hour, or 3.7¢/kWh.
      That was end Feb this year.
      http://cleantechnica.com/2016/02/23/palo-alto-california-approves-solar-ppa-hecate-energy-36-76mwh-record-low/

      But that is not as low as Susan mentions. Found several sub 4, but none at 3.

      • Sadie5412

        I currently get paid approximately 6-8 thousand dollars every month from freelancing online. For everybody willing to work basic freelance work for several hours each day at your home and get good profit while doing it… Try this work CHILP.IT/dba5a53

      • Hmm, okay, i’ll make these 4 cents per kWh.

    • Kevin McKinney

      Yes, I thought the same thing. Wonderful, if it were true, but I’m a bit skeptical.

      • Kevin McKinney

        Ah! Following the story links, Palo Alto was at 3.7, just as Matt said, while San Diego was “below 4”. Both numbers include the 30% tax credit, and so must be considered subsidized rates.

        • I get the point about “subsidy rates,” but the thing that always irritates me about that argument is that fossil fuels have massive subsidies (externalities and historical).

          I understand that utilities are not concerned about externalities (even though they should be), but even so, there’s the CPP, renewable energy standards, and a potential carbon price to take into consideration for future FF costs.

          http://cleantechnica.com/2013/02/07/oil-subsidies-natural-gas-subsidies/

          • Kevin McKinney

            True. Still, it’s good to be clear on the actual terms relative to a particular number.

        • James Tyrer

          These rates are not just subsidized. They are from solar farms run for tax shelters. Without subsidies, businesses run to make a profit would charge a considerably higher price.

          • Kevin McKinney

            Citation, please? I own stock in some companies which run solar farms (among other forms of mostly renewable energy); they, at least, are not run as tax shelters, and do in fact turn profits.

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