The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Solar PV Becoming Cheaper than Gas in California?

We hear it every day: "Solar is too expensive." Well, not according to the California utility Southern California Edison.

In a recent filing to the state's Public Utilities Commission, SCE asked for approval of 20 solar PV projects worth 250 MW – all of which are expected to generate a total of 567 GWh of electricity for less than the price of natural gas.

Although the exact details of the 20-year contracts for the projects are kept confidential for a few years, the utility reports that all winning solar developers issued bids for contracts below the Market Price Referent, which is the estimated cost of electricity from a 500-MW combined-cycle natural gas plant.

What does that mean? It means that a large number of solar PV project developers believe they can deliver solar electricity at a very competitive price. And these aren't mega-projects either. All of the installations will be between 4.7 MW and 20 MW – a sweet spot for PV projects.

Although the price of natural gas has plummeted in recent years because of excessive production and lower demand for power, the cost of solar projects and the price of solar electricity has dropped in tandem. With stong solar requirements in states like California, demand for PV has stayed strong.

"Solar energy is a natural hedge against rising energy costs – a hedge that regulators and utilities are turning to lower electricity costs for their customers," said Rhone Resch, president and CEO of the Solar Energy Industries Association.

California regulators seem to agree that mid-sized solar PV installations, which capture economies of scale but suffer fewer regulatory and transmission constraints, are an important part of the market.

These latest projects were solicited through SCE's Renewables Standard Contracts program, a reverse auction mechanism implemented by the utility in 2010. The program is a precursor to California's Reverse Auction Mechanism (RAM) that was approved last December. That 1-GW program requires California's three largest utilities to hold auctions twice a year to solicit bids from developers of mid-sized (i.e. 1-20 MW) solar PV projects.

The 250 MW of contracts sent to the CPUC for approval is in addition to a 500-MW solar program initiated by SCE in 2009.

According to SCE's filing, the utility seems to be genuinely positive about the prospects for solar PV:

“Solar PV is a mature and proven renewable energy technology that has been supplying a substantial amount of renewable energy to SCE and other California load-serving entities (“LSEs”) for several years.”

While large-scale concentrating solar power projects have been gaining ground in California and other southwestern states, PV is looking like the better option in many cases. Due to the steady declines in the cost of production and price of modules, as well as improvements in Balance of Systems technologies (i.e. power electronics, racking and wiring) that make installations more efficient, solar PV is leading the way.

“The solar industry has done a great job in bringing down costs – long a promise, now a reality,” said Adam Browning, executive director of the Vote Solar Initiative, in a response to the recent SCE announcement. “These are price-points that can really scale, and will encourage policymakers to think big.”

In a recent report from GTM Research comparing similar-sized CSP and PV projects, the authors forecast that electricity from utility-scale PV plants will be considerably lower than some CSP technologies. In the next decade, the research firm projects CSP plants will be generating electricity in the $0.10 to $0.12 per kWh range and PV will be producing electricity in the $0.07 to $0.08 kWh range. (On the flip side, CSP technologies can offer storage capabilities and hybrid natural gas components, providing value that PV can't necessarily deliver.)

With high peak demand, lots of expensive “spinning reserve” power plants and ample sunlight, California is the likely place for PV to compete. But with project costs continuing to drop and utilities promoting the technology, the steady march toward grid parity will spread to other markets as well, said Vote Solar's Browning.

“Though California does have world-class sunlight, solar is modular and adaptable, and similar results can be had throughout the country.”

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox

Subscribe to Renewable Energy World or email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

RELATED ARTICLES

Solar water heating

California Regulators Propose Expansion of Eligibility Requirements for Solar Water Heating Program

Jennifer Delony The California Public Utilities Commission has proposed expanding the eligibility requirements for customers seeking ...
Solar

Florida Supreme Court Takes Up Solar Question

Wayne Barber Because Florida remains one of only four states where current laws expressly deny citizens and businesses the freedom...
solar net metering

Lithuanian Net Metering Hits Snag from Outset

Linas Jegelevicius The much anticipated net metering in Lithuania has hit a major snag from the very start – the introduced network oper...
Solar energy

Colorado PUC Orders No Changes to Solar Net Metering

Vince Font In what is being lauded as a “fair outcome” for consumers, utilities and the solar industry alike, the Colorado Publi...

PRESS RELEASES

Intersolar AWARD „Solar Projects in India“ – Applications being accepted until September 18

The Intersolar AWARD in the category Solar Projects in India honors projects in the fie...

OFS Announces Commercial Availability of InvisiLight® MDU Optical Solution for Multiple Dwelling Units

OFS, a leading-edge designer, manufacturer and supplier of innovative fiber optic netwo...

New local energy partnership brings innovative solar tracker to Washington State

A new partnership will bring the innovative AllEarth Solar Tracker solar electric syste...

30 days to GRC Annual Meeting & GEA Geothermal Energy Expo

The Geothermal Resources Council (GRC) has announced that it is only 30 days to go to t...

FEATURED BLOGS

Washington, DC Bridges the Solar Gap

The District of Columbia has enjoyed 15 years of strong economic growth. But prosperity is spread unevenly across the...

Cronimet / THEnergy study: In solar for mines size does not always matter - Reducing CAPEX with energy efficiency and load shifting

Munich, September 2015. Mining companies are constantly gaining interest in solar solutions because frequently solar ...

Final Program Now Available for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program from

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospect that owns or manages a building with high ...

FINANCIAL NEWS

I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in to...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Successfully Integrating Solar: A Proactive Approach

•      What does the increasing solar penetrati...

PV-Diesel Hybrid Systems to Reduce Diesel Demand

Substantial fuel cost saving potential has made PV technology the centre...

Presenting at PV Insider O&M Conference

Charles Pimentel, COO of Solar Frontier Americas will be presenting on t...

COMPANY BLOGS

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospe...

Going The Extra Mile

Selling efficiency takes perseverance, creativity, and a willingness to ...

How To Get People To Do Stuff

It’s no secret that psychology and sales go hand in hand. If you u...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS