Our friends at Dakota Rural Action are encouraging South Dakotans to solarize their homes. Local energy self-sufficiency is great, and solar technology is moving us toward the point where we can solarize our rooftops as cheaply as we can tap the power from the grid.
But if the utilities quit crying about the purported “war on coal” and invested in industrial-scale photovoltaic (PV) solar power generation, they could make PV solar even more affordable… or so says a study by consultants The Brattle Group, funded by investor-owned power companies:
Using real-world scenarios based on data from Xcel Energy Colorado, the study compares the per-MWh customer supply costs of adding 300 MWDC of PV panels in the form of either 60,000 distributed 5 kW rooftop systems owned or leased by retail customers, or 300 MW of utility-scale solar power plants that sell their entire output to Xcel Energy Colorado under long-term power purchase agreements.
The analysis finds that projected 2019 utility-scale PV power costs in Xcel Energy Colorado’s service territory will range from USD 66/MWh to USD 117/MWh (6.6¢/kWh to 11.7¢/kWh) across all scenarios, while projected power costs for a typical, customer-owned PV system will range from USD 123/MWh to USD 193/MWh (12.3¢/kWh to 19.3¢/kWh).
…The study attributes the large difference in per-MWh costs between utility- and residential-scale systems primarily to economies of scale and greater solar electric output resulting from optimized panel orientation and tracking assumed for utility-scale systems [The Brattle Group, press release, 2015.07.13].
The Brattle Group says industrial-scale solar power also reduces carbon emissions, thanks to the efficiency of building one centralized power plant instead of 60,000 far-flung residential systems.
Some Minnesota electric co-ops are getting the idea and building “solar gardens.” They aren’t necessarily saving power consumers money up front, but they are offering the chance to hedge against rising power costs while avoiding the expense of maintaining rooftop solar panels:
In this area, Lake Region Electric and Itasca-Mantrap electrical cooperatives offer solar gardens, as does Moorhead Public Service.
…Lake Region Electric, for example, has two solar gardens near its headquarters building in Pelican Rapids.
Buying into a solar garden may or may not save customers money, but it will give them a way to stabilize at least part of their electric bill over the next 20 years.
If electrical rates go up over the next 20 years, which seems like a pretty safe bet, those who buy into solar gardens will save money, since they have locked in a rate of about 12 cents per kilowatt hour, slightly cheaper than Lake Region’s regular rate.
Of course, if rates go down, they lose out on those lower prices. If a customer moves out of the area, they can give away their panels or try to sell them to another customer.
Lake Region charges $1,400 for a full panel, which at current rates would generate about $66 a year for the customer over 20 years.
“You’re not buying a panel, you’re buying the energy produced by that panel for 20 years,” said Steve Haiby, energy services supervisor for Lake Region. “Year by year, as our rates go up, so do the value of the credits” [Nathan Bowe, “Buying into Solar Energy,” Prairie Business, 2015.07.13].
The Union of Concerned Scientists recognizes the same economy of scale: all solar power is getting cheaper, but industrial solar power is cheaper than residential and commercial:
Warren Buffet’s Nevada utility just made a deal to get solar power at 3.87 cents per kilowatt-hour. So tell me again, why would you want to dig in the ground for energy when you can just grab it as it falls from the sky?
Powering your own home through your own solar panels and other small-scale power-generation equipment is still a good idea. But making electricity for entire communities with solar gardens and solar farms can do even more to save money and wear and tear on the environment.