Dive Brief:
- A new analysis from Greentech Media (GTM) Research estimates solar bids becoming as cheap as $14.07/MWh through 2022, assuming a perfect storm of desirable financing and technology advances.
- While that is an extremely low and aspirational price in today's market, the report warns that the rate of cost declines is beginning to slow, particularly in more mature markets. But rapid declines will still likely be seen in developing areas.
- NV Energy proposed a portfolio of projects that currently has the lowest-priced solar — a 300 MW power purchase agreement at $23.76/MWh for 25 years, with the Eagle Shadow Mountain solar project.
Dive Insight:
The industry has been playing the solar limbo for years now, as prices rapidly plummeted in response to economies of scale, new technology and experience.
NV Energy's proposal made waves by coming in below a $24.99/MWh contract signed earlier this summer in Arizona. And there is talk that a Tri-County Electric Cooperative deal in Oklahoma resulted in even lower wind prices than the NV Energy solar deal.
The addition of storage is also helping bring down solar prices in some areas. In January, Xcel Energy received a median bid price of $21/MWh for wind-plus-storage projects and $36/MWh for solar-plus-storage projects. That beat out the $45/MWh price for a solar-plus-storage project hit last year in a PPA between Tucson Electric Power and NextEra Energy.
In March, the U.S. Energy Information Administration said costs to install utility-scale solar systems declined 10% to 15% annually from 2010 through 2016. But just how long can prices continue falling?
Solar analyst Ben Attia told Greentech Media that "highly competitive tenders will see cost compression, and there is still room for costs to fall further, but there isn’t as much breathing room on the leading edge."
