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Industrial Solar Power Half the Price of Rooftop Power

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:

UCS-solarpricedropWarren 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.


  1. larry kurtz 2015-07-14 07:53

    Screw the grid.

  2. Craig 2015-07-14 08:28

    I’d still rather have my own system instead of relying upon the electric company’s infrastructure to provide me a clean steady source of energy even if this requires a bit more cost. At least that way you are somewhat insulated from outages due to storms or the errant drunk driver who smashes into a power pole.

    That said, the numbers still don’t work, so unless you can collect a fair amount of tax credits, the cost to install solar is prohibitive. Just look at the example in this article where they explain the cost for a panel in a solar farm is $1,400 whereas it only generates about $66 a year in electricity for a period of 20 years. That means they pay $1,400 for $1,320 worth of electricity – and after that period they own nothing and get no advantage. Even worse is that these calculations don’t factor in the finance or interest charges on those panels so the equation is actually much worse.

    Another aspect of the solar farms that doesn’t really work is that they say if you move you can give away or sell your panels – which means if you do move you are probably talking about a massive loss as anyone who does buy your panels surely won’t do so at full value. On the other hand if you had a PV system on your rooftop, that adds equity to the home and you recoup at least a good portion of that value upon the sale of the home itself. Plus with a personal PV system, you still own it after 20 years and thus eventually it will pay for itself and you’ll start to see some returns (assuming the panels themselves last longer than 20 years).

    Solar costs continue to drop rapidly and it is only a matter of time before the equation makes sense for the average homeowner even without tax credits – however at this point if someone installs solar it isn’t because they are saving money – it is because they are trying to reduce their carbon footprint (which is obviously a good reason, but not everyone has the funds to be able to do so).

    One other final aspect to consider – if people want to actually store the energy they produce there is a second investment of storage in the form of a battery bank. Since the costs of this can be so incredibly high, in most cases home PV systems just tie into the grid and feed power back into the power company during the day which spins the meter backwards and then they draw power from the grid during the night as they normally would. Of course this only works in areas that allow and/or require the utility to purchase the power.

  3. Sabrina 2015-07-14 08:29

    Agreed with Larry! Aside from that, solar gardens would be great. But there was this great company that wanted to put in industrial-scale solar around Sioux Falls, and people kindof freaked out. So until we change how people think about their power and the culture of energy in this state? It’s going to be difficult to make that happen.

  4. Don Coyote 2015-07-14 09:00

    “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?”

    Because the sun doesn’t always shine and the wind doesn’t always blow. You’re still going to have to have a reliable base generation source that can produce electricity on demand, most likely natural gas.

    Even “Mr Clean Energy”, Robert Kennedy Jr realizes that renewable solar and wind generation sources are joined at the hip with fossil fuel generation and are dependent on that base generation capability:

    “For all of these big utility scale power plants, whether it’s wind or solar, everybody is looking at gas as the supplementary fuel. The plants that we’re building, the wind plants and the solar plants are gas plants.”

    And as always the cheerleaders for wind and solar always forget to include the costs that invariably come from not only from the inefficiencies of not running your base generation at capacity but also the billions and billions of dollars of stranded resources in the way of shuttered coal fired generation plants, coal mines, stilled natural gas rigs and decommissioned nuclear plants.

  5. larry kurtz 2015-07-14 09:04

    The grid is under attack every day: it’s only a matter of time until it goes dark.

    Build your own systems, people.

  6. larry kurtz 2015-07-14 09:07

    Utilities are monsters destroying everything in their paths and will stop at nothing to end your property rights.

  7. caheidelberger Post author | 2015-07-14 09:23

    Sabrina, would solar gardens be a happy medium between industry and self-sufficiency? Enjoy some of the benefits of shared infrastructure at the local level while still distributing generation in more, smaller nodes that would be more resistant to a continental grid failure?

  8. MC 2015-07-14 10:12

    Larry has a point. the grid is under constant attack. Not to mention the grid is aging, and really not able to keep up with current demands.

    the idea of decentralized power generation is an idea worth following up on. Wind and solar may not the answer. let’s keep looking.

  9. caheidelberger Post author | 2015-07-14 10:21

    We can view decentralized power and solar power as overlapping but not identical issues. We may be able to discover better alternatives to plug into decentralized power grids (or mini-grids!). We may also find that we can plug big solar into a hardened big grid.

    (Hey, MC, since you’re here, can I get a press release on your FB announcement yesterday?)

  10. Matt 2015-07-14 10:32

    CH you are correct, without the ability to adequately transmit and store the energy from different types of renewable sources, people on the right like Don will always be able to say it’s not cost effective enough (ignoring the subsidies current coal fired plants get, different subject, same story).
    A “smart grid” changes the way power is stored transmitted, monitored, and used. This changes all the calculations fossil fuel advocates use to poo-poo clean energy. Especially here in the Midwest where we have a plethora of diverse, ready to use renewables, a grid that is able to handle and store inputs from both personal as well as commercial renewable endeavors from wind to solar to hydro electric would be a huge boon. As both a state and a nation much more could be done on this front but to make the whole thing efficient enough to make sense we need to upgrade the grid first.
    Shameless plug time; I have suggested we start that process right here in South Dakota at a spot where much of the infrastructure for both renewables and education already exist.

  11. larry kurtz 2015-07-14 10:37

    South Dakota receives zero dollars for generated power on the main stem dams yet suffers the environmental litter represented by transmission lines from the river.

  12. Douglas Wiken 2015-07-14 10:39

    Solar and wind in combination may work better than either alone. Excess energy from these sources on good wind and solar days could be used to produce methanol or anhydrous ammonia. Dispersed power systems also would not require huge powerlines.

    Rural electrics could install solar panels on their thousands of poles.

    Old coal plants are being demolished and replaced with natural gas. The size of these replacement plants could be reduced or designed for efficient starting and re-starting.

    Governments, consumers, and utilities need to get going on this. If a fraction as much money was spent on cheaper more efficient solar panels as was spent on the mission to photograph Pluto, my guess is we would be ahead of the rest of the world already. This is however not to diminish the significance of the Pluto mission…even if so far all we know is that it is larger than was thought, but still smaller than our moon.

  13. Don Coyote 2015-07-14 10:48

    @cah: Your link demonstrates a big problem for the electrical grid now playing out in California. From you link:

    “Millions of customers, commercial earlier than residential, representing billions of dollars in utility revenues will find themselves in a position to cost-effectively defect from the grid if they so choose,”

    Which will only increase the base costs of providing electricity to the masses of which many will be the poor who can’t afford a stand alone solar/wind system with an expensive storage system.

    “Utilities have long complained that the steeply tiered system means higher-use households have unfairly subsidized low-use households for years. They say that the gap has only increased, with low-use households not even paying for the cost of supplying electricity.”

    Do you seriously believe that by stopping the use of coal we are somehow “banking” it for the future? In what rusted out coal generation plant are our great great grandkids going to burn this banked coal? Are they going to have spend trillions in resources reconstructing a system that no longer exists?

    And where is all this lithium going to come from? From the South American lake beds where 70% of the world’s lithium reserves exist? And are we going to wring our hands and shed tears over the destruction of that environment as those beds are mined just as the greenies do over the the mining of the tar sands in Canada or pipeline oil spills or fracking fluid disposal and on and on ad infinitum?

  14. larry kurtz 2015-07-14 10:48

    The mercury levels in Shadehill and Newell Lakes are directly linked to the Colstrip Steam Electric Station in Montana and Big Stone is responsible for heavy metal oxides in Minnesota watersheds.

    Coal and natural gas are bridges to nowhere.

  15. Porter Lansing 2015-07-14 11:12

    Burning coal kills fish and pheasants.

  16. mike from iowa 2015-07-14 12:16

    You ought to see all them shiny new wind turbines popping out of iowa soil in Obrien Co,iowa. Compliments of Black Hills Power. Gonna be hundreds of ’em. Pics coming soon. They are less than a mile from me now and should be online next year. They surely do mess up gravel roads and crop fields,but that is progress,I guess.

  17. mike from iowa 2015-07-14 12:19

    Don Coyote-your side is now gonna pretend to worry about poor people? Oh,Please.

  18. Paul Seamans 2015-07-14 12:20

    I have been told by someone that should know that all the lakes in North Dakota have advisories against eating the fish caught in their lakes because of high mercury levels. The reason for this is rainwater contaminated by burning coal.

  19. leslie 2015-07-14 12:50

    pluto was a bush deal. “faster, cheaper, better” daniel goldin, NASA administrator under bushies and clinton. now builds robots in la jolla.

  20. Deb Geelsdottir 2015-07-15 00:09

    Natural gas has just overtaken coal as the number one energy source in the US. It was in today’s Wapo, but I don’t have the link now.

  21. barry freed 2015-07-15 08:56

    I built a panel of my own to see how it would work. I bought un-tabbed cells, grade A, made in USA at .20 cents per watt. It worked fine and made the wattage promised. My next panel will feature individual cells connected with screws to make it easier to locate and replace any failed cells. Here are some made in USA, tabbed, at .41 cents per watt, a cheaper price might be found.

    Tabbed are easier to work with for the novice solderer, but tabbing isn’t difficult with an hour of practice. Like all welding or soldering, don’t fear the heat. The cells are extremely thin and break easily, but I built a jig to hold them and my breakage decreased to almost zero. The great thing about building your own is you can add to your system as you can afford it, taking your house off the grid one appliance at a time. That, and every new panel added will be stand alone which helps in troubleshooting.
    1366 keeps promising significantly lower prices with “direct wafer” cells, 1/2 of current installed retail, but they haven’t made it to the consumer market yet. I won’t delve into that political mess. For those with the means, Solyndra panels, state of the art, are selling on eBay at $1.49 per watt as recently as a month ago.

  22. barry freed 2015-07-15 08:59

    Sorry, looked at my link closer, they are not made in the USA. Probably German, as they are big on solar.

  23. Bill Dithmer 2015-07-17 11:48

    I just looked at our solar production for the last week. It says we produced 780 KWhs in that amount of time. That would be 3120 KWhs for a month. Our other system went online yesterday so that figure will be more then double that next week.

    The average american house uses 903 KWhs a month. Just for an example. So that means we produce enough electricity to power 3.45 homes for a month. If you double that it will be almost seven homes.

    While the average use is 903 KWhs a month the dome runs at about a 4th of that to heat or cool, dehumidify, and the lights. We use both gas and induction cooktops to cook and on demand hot water heaters that both heat water and the floors in the winter. Just imagine what a big community system could do?

    The Blindman

  24. caheidelberger Post author | 2015-07-17 11:54

    Holy cow, Bill! You’ve got your own solar garden! Got any neighbors who need power?

    Notice that Bill demonstrates the two-fisted approach to energy independence: he produces plenty of power, but he also uses much less than normal. We get off fossil fuels by addressing supply and demand. Build more houses like Bill’s to use less energy, and we take even more pressure off industrial power production.

  25. Deb Geelsdottir 2015-07-17 21:59

    I am impressed with the fine home Blindman lives in. That’s just so smart. Good on ya, Bill.

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