Solar Energy in the Midwest

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Solar Gets Cheaper, but Not Equally

Solar Gets Cheaper, but Not Equally.

In January, I plotted the size of state solar markets against their average installed cost and found surprisingly little correlation.  When Lawrence Berkeley Labs put out their 2011 version of Tracking the Sun (IV), it was possible to update the chart, which I did in two stages.

The first chart simply overlays the 2010 average installed cost on the original chart, with arrows indicating the movement of the prices in most states (I ran out of room in the small market states).   It’s almost like a rainbow rain of falling solar prices.

The Grid Price

Utilities like to compare new electricity production to their existing fleet, which means comparing new solar power projects to long-ago-paid-off (amortized) coal and nuclear power plants that can produce electricity for 3-4 cents per kWh.  But this is apples to oranges, because utilities can’t get any new electricity for that price, from any source.  

A more appropriate measure of the grid price is the marginal cost for a utility of getting wholesale power from a new power plant.  In California, this is called the “market price referent” and it’s around 12 cents per kWh.  The figure varies from state to state.  

But while the market price referent provides a reasonable comparison for the cost of utility-scale solar, it’s not the number that matters for solar installed on rooftops or near buildings.  In those cases, the power is used “behind the meter,” and depending on the type of state policy for net metering, the customer can essentially spin their electric meter backward when their solar panels produce electricity.  That means that solar power is really competing against the energy cost on a utility bill, known as the “retail price.” 

The following map shows the average retail electricity price by state across the U.S.  It ranges from 8-10 cents in the interior to 15 cents per kWh and higher on the coasts.  

For full article go to: http://energyselfreliantstates.org/

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