NV Energy buys utility-scale solar at record low price under 4 cents/kWh

Dive Brief:

NV Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway Energy, has agreed to a power purchase agreement (PPA) at a $0.0387 per kWh rate for the 100 MW output of First Solar’s Playa Solar 2 installation. It is likely the lowest rate for solar energy-generated electricity made public to date, Bloomberg reports, and is likely the cheapest electricity available in the U.S. today.
The rate was made public in NV Energy’s July 1 filing with the Public Utilities Commission of Nevada. That filing also covered NV Energy’s 2014 PPA for the purchase of the production of SunPower’s 100 MW Boulder Solar installation at $0.046 per kWh, which is thought to be the lowest 2014 rate made public.
Those prices represent dramatic price reductions for NV Energy which, according to the filing, paid an average of $0.1377 per kWh in 2014 for solar generation to help it meet the state’s 25% by 2025 renewables mandate.

Dive Insight:

Just last week, Austin Energy set a new record for a solar buy when it inked a PPA for under 4 cents/kWh. The exact rate wasn't made public, but Bloomberg reports that Berkshire's PPA has beaten it with a rate under 3.9 cents/kWh.

It's not only the cheapest solar — it may be the least expensive electricity in the entire country.

“That’s probably the cheapest PPA I’ve ever seen in the U.S.,” Kit Konolige, a utility analyst at Bloomberg Intelligence told the news organization. “It helps a lot that they’re in the Southwest when there’s good sun.”

The U.S. had 3.7 GW of new utility-scale solar capacity come online in 2014, breaking 2013’s record-setting new capacity total by 10%, according to SNL Energy. California and North Carolina lead the U.S. in utility-scale solar construction.

Driven by the expected reduction of the 30% federal Investment Tax Credit to 10% after 2016, the utility-scale solar pipeline in Q1 2015 was the biggest it has ever been.

“Amidst relatively weak installation volumes, major highlights in Q1 2015 centered on consolidation across the project developer landscape and aggressive procurement of centralized solar by utilities and now corporate entities as well,” GTM Research reported in its solar market insight report for the first three months of the year.

There was 500 MW more utility-scale solar in development in Q1 2015 than was brought online and 25 developers have at least 100 MW of capacity in development, according to GTM's Q1 2015 U.S. Solar Market Insight report. With most developers racing to bring projects online before the end of 2016, there are over 4 GW under construction.