SCE asks for approval of long term PV contracts at prices BELOW gas-powered plants

Solar power cheaper than gas power in California
By Monte Paulsen February 7, 2011 11:39 am

A southern California utility has received contracts under which small-scale photovoltaic farms would produce electricity at a lower long-term cost than electricity generated by a gas-powered plant.

Southern California Edison has asked regulators to approve 20-year contracts under which it plans to buy a total of 250 megawatts of electricity at a cost below the “market price referent,” which represents the projected leveled cost of electricity generated by a typical gas turbine over the same 20-year period.

Todd Woody summed up the situation this way in the online journal Grist:

So in plain English, the developers of these solar farms have told the utility that they can produce electricity cheaper than a fossil fuel power plant.

Woody also noted that in response to its request for bids, Southern California Edison received offers for ten times as much power as it was prepared to purchase, meaning that literally dozens of unrelated firms were eager to sell photovoltaic power at competitive prices:

The increasing competitiveness of photovoltaic power is a reflection of the steep drop in solar modules prices in recent years, thanks in large part to the rapid expansion of manufacturing capacity by Chinese solar companies. But solar modules themselves typically represent just half the cost of a project, so the growing competitiveness of solar energy probably also is due to developers’ increased efficiency at building power plants and cutting other costs.

The Southern California Edison bids are significant because proponents of nuclear- and fossil fuel-generated electricity have long dismissed photovoltaic power as “too expensive” and therefore damaging to the economy.

Monte Paulsen researches sustainability for the nonprofit Tyee Solutions Society.


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