Dive Brief:

• Idaho Power last week announced it has entered into a deal to purchase 120 MW of solar energy at a price the utility believes is among the lowest publicly reported to date. The utility signed a 20-year power purchase agreement (PPA) with Jackpot Holdings, with an initial price of $21.75/MWh — or less than $0.022/kWh.
• The solar array is expected to be completed by 2022, and the energy will help replace coal-fired capacity at the North Valmy plant in Nevada, where Idaho power has announced it will end operations. Idaho Power has the option to purchase the new solar facility or support its expansion in the future.
• Idaho Power announced the deal on March 26, the same day it revealed a plan to supply 100% of its power from non-emitting resources by 2045. New wind, solar and other clean energy resources will all play a role.

Dive Insight:

Whether or not Idaho Power's solar contract sets a new low-price record, the trend towards more affordable renewable energy is clear. 

It has been less than a year since NV Energy announced a 300 MW solar PPA at $23.76/MWh for 25 years. That price edged out a $24.99/MWh contract signed last summer by the Central Arizona Project, which GTM Research said was the lowest-cost solar contract at the time.

Idaho Power's deal reflects the utility's commitment to "balance environmental stewardship with affordability and reliability," President and CEO Darrel Anderson said in a statement. "This deal will provide energy that is not only clean, but is also at a cost that benefits our customers.”

The new solar project will be located south of Twin Falls, Idaho, and will connect with an existing transmission line that delivers energy from the North Valmy plant to Idaho Power. The utility said its deal 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."

Idaho Power owns parts of three coal plants, but announced last months that it has "agreements to end our participation in two of them, and we're exploring exiting participation in the third." 

The utility's remaining coal assets include: 50% of the North Valmy plant in Nevada, co-owned with NV Energy; 10% of the Boardman plant in Oregon; and one-third of of the Jim Bridger plant in Wyoming. The Boardman plant is expected to end operations in 2020, while Idaho Power has finalized an agreement at the Valmy plant to end its participation in unit 1 by 2019 and unit 2 by 2025.

Solar prices are expected to fall even further, according to analysis from Greentech Media Research last year. The firm sees solar bids becoming as cheap as $14.07/MWh through 2022, though analysts also warned that the rate of cost declines is beginning to slow, particularly in more mature markets.