Ah, remember when solar power was expensive. You know, just a couple years ago. Things change fast, don't they?
For
example, in 2009, Austin Energy agreed to pay 16.5 cents per
kilowatt-hour (kWh) for electricity from a solar power plant (via a
25-year power purchase agreement, or PPA). Just 5 years later, it is
going to pay a little less than 5 cents per kWh for electricity from a
couple of new solar power plants (again, via a PPA).
To put that
into a little perspective, Austin Energy estimates that it could have
paid 7 cents per kWh for electricity from a natural gas power plant, 10
cents per kWh from a coal power plant, and 13 cents per kWh from a
nuclear power plant.
From a wind power plant, the estimate was
2.8¢/kWh to 3.8¢/kWh. However, there's something to highlight regarding
solar power. Electricity markets work by the same supply and demand
principles as other markets (to an extent). As supply goes up,
electricity price falls. And as demand goes up, electricity price rises.
Electricity demand (especially in the South) is greatest around the
middle of the day, which makes electricity prices highest at that time.
The fact that solar, which produces electricity at these peak demand
times, is available for 5¢/kWh is pretty huge.
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