Published on June 14th, 2018 | by Kurt Lowder0
New US Solar Record — 2.155 Cents Per kWh! (with Escalator for Inflation)
June 14th, 2018 by Kurt Lowder
We have seen solar power in the Middle East come into the low 2 cents per kilowatt-hour (kWh) range. We have seen it under 2 cents per kWh in Mexico. Misguided, casual observers claimed these prices only occurred due to heavily exploited labor, but now we have also seen 2.155 cents per kWh in the United States (h/t RenewEconomy). This contract was one of six contracts that Nevada Power recently signed. All 6 contracts came in under 3 cents per kWh. Update: This particular project had a 2.5% per year escalator for inflation. Another project had a higher price/kWh in the first year but with no escalator it came to an average of 1.795¢/kWh over the 25 year PPA period.
Update #2: To clarify, the storage projects are connected to the solar projects but the pricing for the solar projects and storage projects are separate. For details, see this comment.
At CleanTechnica, we have published numerous stories projecting that the price of solar would continue to decline despite already low prices. Nevertheless, I still feel the need for someone to convince me that I am not dreaming every time a solar price record is obliterated. (Notably, not even 5 years ago, 2–3¢/kWh solar was projected for 2050.)
The 6 solar farms range from 50 megawatts to 300 megawatts. Combined, they will total 1,001 megawatts. Just a reminder for any newer readers of CleanTechnica and such energy stories — 1,000 megawatts is equal to 1 gigawatt. Roughly speaking, 1 gigawatt of solar panels cover about 1 square kilometer.
All of these projects will be completed in 2020 or 2021. It is highly likely that if, hypothetically, these projects were finished tomorrow, they would be losing money at these rates. Continually, we have seen solar companies confidently bid for future projects at rates far below what is currently profitable. They are confident enough that in the future their costs will fall and their expertise will improve. History has generally been on their side.
Three of the solar farms will also include battery storage totaling 100 megawatts (MW) of power capacity and 400 megawatt-hours (MWh) of energy storage. Specifically, those 3 projects have the following storage specs: Dodge Flats — 50MW/200MWh, Fish Springs — 25MW/100MWh, Crescent Valley — 25MW/100MWh. For some comparison, the world record 129 MWh battery Tesla recently built in South Australia has a power capacity of 100 MW.
In case you don’t follow the utility industry closely, note that Nevada Power is owned by Berkshire Hathaway, a Warren Buffet company. Nevada Power has heavily lobbied against rooftop solar and net metering policies that favor homeowners. For many years, Nevada Power was an enemy in the mind of many environmentalists, including myself. However, today, I have nothing but love for Nevada Energy.
I started following CleanTechnica religiously in 2014 when a Middle East solar project came in under 6 cents per kilowatt-hour, which seemed amazing at the time. I hope you will stay tuned with us year after year and enjoy each successive price decline.
There are many more details to come on this groundbreaking deal.