PV at 4 cents October 15, 2015Posted by Maury Markowitz in solar.
Tags: grid parity, LCoE, solar power
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During the summer, Warren Buffett’s NV Energy in Nevada signed a long-term power purchase agreement (PPA) for 20 years at 3.87 cents a kilowatt-hour. This is for PV generated by First Solar’s 100-megawatt Playa Solar 2 installation.
This means that FS is generating that power, including tax breaks, at less than 4 cents/kWh. Those breaks account for less than 2 cents. The Nevada Public Utilities Commission called the rates “very reasonable”, having outcompeted all other bids including NG turbines. Understatement indeed!
This isn’t the only example. NV Energy signed a similar deal with SunPower’s Boulder Solar at an equally eyewatering 4.6 cents only last year, and Dubai’s 200 MW plant, the first major one in the country, is at 5.85 cents, and the Saudi’s at 4.9 cents. The prices in those areas will go down as the supply chain improves.
Now of course all of these are in sunny locations with few clouds, which some will complain about. But that’s like complaining you build hydro where there’s a river. And prices continue to fall. Even if the US tax credits expire, which they will sooner or later, PV will compete even on the utility side of the meter pretty much anywhere south of the Mason-Dixon.