NewEnergyNews: TODAY’S STUDY: THE COST OF BIG SOLAR VS THE COST OF ROOFTOP SOLAR

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

  • FRIDAY WORLD HEADLINE-World Gets A Step Closer To Enforceable Climate Laws
  • FRIDAY WORLD HEADLINE-New Energy Ready To Power The World Future
  • FRIDAY WORLD HEADLINE-Sahara Sun Could Power The World
  • FRIDAY WORLD HEADLINE-World’s Biggest Offshore Wind Turbines Building Off UK Coast
  • THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, September 22:

  • TTTA Thursday-Why Having Babies Could Be The Climate Change Answer
  • TTTA Thursday-Big Texas Wind Backed By Amazon
  • TTTA Thursday-Big Sun Sparkles In Nevada
  • TTTA Thursday-EV Racing Coming To The Streets Of Brooklyn
  • THE DAY BEFORE THE DAY BEFORE

  • ORIGINAL REPORTING: In The Wake Of The Massive Aliso Canyon Leak
  • ORIGINAL REPORTING: The Rise Of Distributed Energy Resources Goes On
  • ORIGINAL REPORTING: Community Solar Matures And Evolves
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: A Snapshot Of U.S. Solar Right Now
  • QUICK NEWS, September 20: Survey Shows People Oppose Fossil Fuels; Solar Bargain Hits World Record; China In Record Wind Build Rate
  • AND THE DAY BEFORE THAT

  • TODAY’S STUDY: A Utility Puts Out Its Vision Of New Energy On A New Grid
  • QUICK NEWS, September 19: People Will Pay To Fight Climate Change; Wind To Keep Getting Cheaper; Tesla Batteries To Ease Aliso Cyn-Caused Power Shortfalls
  • THE LAST DAY UP HERE

  • Weekend Video: This Is Decade Zero But It’s Not Too Late
  • Weekend Video: U.S. Offshore Wind Gets Real
  • Weekend Video: Grid 3.0 And The New New Energy
  • --------------------------

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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • WEEKEND VIDEOS, September 24:

  • Good News On Climate – The Public Is Starting To Get It
  • The Libertarian Failure On Climate Change
  • New Energy Is Doable – And Is Being Done

    Tuesday, July 21, 2015

    TODAY’S STUDY: THE COST OF BIG SOLAR VS THE COST OF ROOFTOP SOLAR

    Comparative Generation Costs of UtilityScale and Residential-Scale PV in Xcel Energy Colorado’s Service Area Bruce Tsuchida Sanem Sergici Bob Mudge Will Gorman Peter Fox-Penner Jens Schoene,

    July 2015 (The Brattle Group)

    Executive Summary

    Electricity generated from solar photovoltaic (PV) panels has become a significant source of carbon-free power in the United States over the last decade. Compared to other solar-electric technologies, solar PV systems are unique in that they are highly scalable and may be deployed in configurations ranging from just a few kilowatts (kW) (residential-scale) to hundreds of megawatts (MW) (utility-scale). This report examines the comparative customer-paid costs of generating power from equal amounts of utility- and residential-scale solar PV panels in the Xcel Energy Colorado system. The report was prepared by consultants at The Brattle Group for First Solar, with support from the Edison Electric Institute. Xcel Energy Colorado provided data and technical support.

    The analysis in this report looks at the Xcel Energy Colorado system in 2019 and compares the per-megawatt hour (MWh) customer supply costs of adding 300 MW of PV panels (measured in W-DC) either in the form of: (1) 60,000 distributed 5-kilowatt residential-scale (rooftop) systems owned or leased by retail customers; or (2) 300 MW of utility-scale solar power plants that sell their entire output to Xcel Energy Colorado under long-term purchase power agreements (PPA).

    Using a Reference Case and five scenarios with varying investment tax credit (ITC), PV cost, inflation, and financing parameters, the study finds that customer generation costs per solar MWh are estimated to be more than twice as high for residential-scale systems than the equivalent amount of utility-scale PV systems. The projected 2019 utility-scale PV power costs in Xcel Energy Colorado range from $66/MWh to $117/MWh (6.6¢/kWh to 11.7¢/kWh) across the scenarios, while residential-scale PV power costs range from $123/MWh to $193/MWh (12.3¢/kWh to 19.3¢/kWh) for a typical residential-scale system owned by the customer. For leased residential-scale systems, the costs are even larger and between $140/MWh and $237/MWh (14.0¢/kWh to 23.7¢/kWh). The generation cost difference between the utility- and residential-scale systems owned by the customer ranges from 6.7¢/kWh to 9.2¢/kWh solar across the scenarios. To put this in perspective, national average retail all-in residential electric rates in 2014 were 12.5¢/kWh.

    The large gap in per-MWh costs between utility- and residential-scale systems results principally from: (a) lower total plant costs per installed kilowatt for larger facilities; and (b) greater solar electric output from the same PV capacity (300 MW-DC) due to optimized panel placement, tracking and other economies of scale and efficiencies associated with utility-scale installations.

    Additionally, the analysis finds that residential-scale PV systems cost $195 million more than the utility-scale systems under the Reference Case on an NPV basis over 25 years. If the same amount of residential-scale PV systems (1,200 MW) were installed in 2019 as in 2014, they would cost customers roughly $800 million more in NPV than a comparable purchase of utilityscale systems, under conditions assumed for the Reference Case.

    These cost results include only the customer-paid costs for the generation from equal amounts of PV capacity deployed in two configurations in one utility service area. A complete tally of the differences between equal amounts of the two types of PV capacity would require that these two resource options be alternatively embedded in a complete, subsequently optimized integrated resource plan (IRP) for Xcel Energy Colorado or other systems of interest, which would better reflect the effects of each PV option on system costs and potential benefits such as savings on transmission and distribution outlays and ancillary service costs. However, as discussed below, we evaluate avoided and/or increased transmission and distribution costs between the two types of PV plants, as well as externalities, and conclude that including these added or avoided costs is unlikely to change our conclusion.

    Additionally, while the results of this analysis apply solely to the Xcel Energy Colorado system and should not be transferred to other areas without attention to comparative insolation levels and other cost drivers that vary by region, the authors believe that the general relationship between costs is likely to hold true for most of, if not all, U.S. utilities with significant solar potential. The authors also find through the sensitivity cases that the results are robust to changes in federal tax credits, inflation, interest rates, and changes in PV costs than we project in our Reference Case.

    Overall, the findings in this report demonstrate that utility-scale PV system is significantly more cost-effective than residential-scale PV systems when considered as a vehicle for achieving the economic and policy benefits commonly associated with PV solar. If, as the study shows, there are meaningful cost differentials between residential- and utility-scale systems, it is important to recognize these differences, particularly if utilities and their regulators are looking to maximize the benefits of procuring solar capacity at the lowest overall system costs. With the likely onset of new state greenhouse gas savings targets from pending EPA rules, the options for reducing carbon emissions and the costs of achieving them will take on an even greater importance.

    Simply stated, most of the environmental and social benefits provided by PV systems can be achieved at a much lower total cost at utility-scale than at residential-scale…

    Conclusions

    This report has examined the comparative customer-paid costs of generating power from equal amounts of utility- and residential-scale PVs in Xcel Energy Colorado’s area. Our results indicate that customer generation costs per solar MWh are estimated to be more than twice as high for residential-scale systems, than the equivalent amount of utility-scale PVs.

    Projected 2019 utility-scale PV power costs in Colorado range from $66/MWh to $117/MWh across our scenarios, while residential-scale PV power costs range from $123/MWh to $193/MWh for a typical residential-scale system owned by the customer. For leased residentialscale systems, the costs are between $140/MWh and $237/MWh. Based on the Reference case and remaining five Scenarios we analyzed, residential-scale PVs costs $87 million to $195 million more than the utility-scale on an NPV basis over 25 years. In 2014, 1,200 MW of residential-scale PV systems were installed in the U.S. If the same amount of residential-scale PV systems (1,200 MW) were installed in 2019, these PV systems would cost customers roughly $800 million more in NPV than a comparable purchase of utility-scale systems, under conditions assumed for the Reference Case.

    These results apply to the Xcel Energy Colorado system and should not be transferred to other areas without attention to comparative insolation levels and other cost drivers that vary by region. However, we believe that the general relationship between costs is likely to hold true for most of, if not all, U.S. utilities with significant solar potential. We also find that our results are robust to changes in federal tax credits, inflation, interest rates, and changes in PV costs than we project in our base case.

    As noted earlier, our specific quantitative results apply only to the generation portion of electric power service. In order to evaluate the complete customer cost differences between the two types of PV power, it is essential to evaluate these options in an optimized integrated resource planning framework that incorporates all the comparative monetized non-generation cost and benefit differences, such as transmission and distribution system impacts. However, as explained in Section IV, a review of the literature suggests that the total customer costs of PV power within a fully optimized power system will be substantially less expensive for equal amounts of utilityscale compared to residential-scale PVs in the vast majority of cases. Nevertheless, a full evaluation of these considerations would have to take place in the context of an optimized integrated resource plan, which we have not undertaken here.

    Finally, we have briefly examined non-monetized social benefits that could potentially offset the costs. Among the main categories, water, fuel price hedge, energy security, and emissions, social benefits are roughly proportional to the amount of solar generation and are therefore higher for utility-scale PVs. Resilience benefits may be higher for some residential (and community) systems, and jobs benefits are ambiguous.

    Overall, our findings demonstrate that utility-scale PV system is significantly more cost-effective than residential-scale PV systems when considered as a vehicle for achieving the economic and policy benefits commonly associated with PV solar. If, as we have shown, there are meaningful cost differentials between residential- and utility-scale systems, it is important to recognize these differences, particularly if utilities and their regulators are looking to maximize the benefits of procuring solar capacity at the lowest overall system costs. With the likely onset of new state greenhouse gas savings targets from pending EPA rules, the options for reducing carbon emissions and the costs of achieving them will take on an even greater importance. Simply stated, most of the environmental and social benefits provided by PV systems can be achieved at a much lower total cost at utility-scale than at residential-scale.

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