https://arstechnica.com/science/2019/04/with-tax-credit-idaho-power-secures-record-low-price-for-utility-scale-solar/
[links in online article]
Idaho Power announces record-low price for power from solar farm
The 120MW solar plant will help replace a coal-fired plant to be retired
in 2025.
Megan Geuss - 4/4/2019, 2:26 PM
Idaho Power announced recently that it had secured a 20-year deal to buy
power from a 120MW solar farm being built by a company called Jackpot
Holdings for $21.75 per megawatt-hour (MWh). The price is less than 2.2
cents per kilowatt-hour (kWh), which appears to be a record-low price
for solar energy in the United States.
The price isn't a perfect reflection of solar panel cost—Idaho Power's
price is as low as it is because Jackpot Holdings is taking advantage of
a federal subsidy in the form of the solar Investment Tax Credit (ITC),
which is set to begin phasing out in coming years. Still, industry
watcher and investor Ramez Naam tweeted last night that, without the
ITC, he estimates the price per kWh for the project would be about 3
cents per kWh, which is still extremely cheap.
Just two years ago, the Department of Energy (DOE) announced that the
average utility-grade solar project in the US had hit 6 cents per kWh,
achieving the DOE's national goal three years early. Last October,
Nature Energy published a paper investigating whether super-cheap,
3-cents-per-kWh solar prices in the Middle East reflected actual cost or
simply existed as loss leaders and subsidy vehicles in oil-rich
countries. (Spoiler: the researchers found that 3-cents-per-kWh prices
were possible and rational in the Middle East.)
In addition to ITC subsidies, the solar project in Idaho likely benefits
from the fact that it will use existing transmission lines to deliver
power to the utility's customers. Those transmission lines currently
deliver power from the North Valmy coal plant in Nevada, which will be
retiring in 2025 after Idaho Power announced last month that it would
divest from coal and natural gas by 2045. Idaho Power follows Xcel
Energy as a major power provider in the American West that has pledged
to eliminate fossil fuels completely in the coming decades.
Idaho Power's agreement with Jackpot Holdings "includes the potential
for Idaho Power to buy the facility, as well as obtain energy from a
proposed expansion at a slightly higher price," according to a press
release.
"In addition to being clean and affordable, solar energy production
increases in the summer—when hot weather and irrigation increase Idaho
Power customers' energy needs," Idaho Power added.
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