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

RELATED ARTICLES

Sunrise in Pakistan as the Country Delves into Solar PV

Robert Harker Pakistan has joined the list of countries that are exploring solar power as a means to bridge critical energy generat...

Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

Why Smarter Grids Demand Smarter Communications Networks

Mark Madden

Historically, utility networks and communications networks have had little in common.

The Importance of “Switching Costs” to the US Residential Solar Industry

Paula Mints The DoE and numerous organizations and governments globally are focused on driving down the cost of solar convinced t...

PRESS RELEASES

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...

Early Bird Registration Deadline for GRC Annual Meeting is This Week

The deadline for early-bird rates for registration for the biggest annual geothermal ev...

Redesigned HydroWorld.com Video Gallery

Hydropower news and information, and interesting promotional announcements are now avai...

FEATURED BLOGS

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...

The Coming Multi-trillion Dollar Energy Investment Drive

In coming years, a multi-trillion dollar low-emission energy investment drive will get underway. Three catalysts wil...

The Perfect Elevator Pitch

The elevator pitch is a concise statement that grabs attention and communicates value, ideally leading to a next step...

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

Intersolar North America 2016

Exhibition: July 12 - 14, 2016; Conference: July 11 - 13, 2016 Intersola...

Intersolar South America 2015

Exhibition and Conference: September 1-3, 2015 Intersolar South America ...

Intersolar Europe 2016

Exhibition: June 22-24, 2016; Conference: June 21-22, 2016 Intersolar Eu...

COMPANY BLOGS

Less Is More

When you’re giving a presentation, one of the easiest things to do...

Captivology

One of the biggest challenges we face as efficiency sales professionals ...

How To Optimize Your Meeting Schedule

Do you spend more time in meetings than you do actually working? While m...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS