Minnesota Judge rules solar power a better deal for the State

by Zachary Shahan.

Image Credit: Brian McConnell, Resilience
Image by Brian McConnell, Resilience.

Nicely matching the Credit Suisse findings I shared yesterday, I just got word of some positive clean energy news out of Minnesota: Administrative Law Judge Eric Lipman this week concluded that Xcel Energy should invest in some large solar power arrays rather than natural gas generators in order to meet projected power needs in Minnesota. The reason solar was preferred is that the solar power arrays would offer ratepayers a better deal. If Minnesota’s Public Utilities Commission (PUC) upholds the decision, Minnesota could see its solar power capacity increase at least 7 times over.

“Edina-based Geronimo Energy plans to build about 20 large solar power arrays on sites across Xcel’s service area at a cost of $250 million” if the decision holds strong, StarTribune writes. Geronimo has already built wind farms in the state, farms that supply electricity to Xcel Energy. The company is building more wind farms in Minnesota, North Dakota, Michigan, and Nebraska. However, it seems that Geronimo is now turning its eyes towards increasingly competitive solar.

Geronimo Vice President Betsy Engelking claims that this project would be the first solar project in the US to officially outcompete natural gas in a state without utility or state solar incentives.

The key force behind this solar first is one very familiar to CleanTechnica readers:

“The cost of solar has come down much faster than anyone had anticipated. This is one of the reasons solar is going to explode.”

Indeed, the cost of solar panels is about 100 times lower than it was a few decades ago, and half of what it was just a handful of years ago.

Falling cost of solar
Falling cost of solar

Interestingly, the decision to make these power projects compete on price was a first in Minnesota. StarTribune reporter David Shaffer writes:

It is the first time the state has used a competitive bidding process for a major power generation project. The commission ordered the trial-like proceeding to force energy companies to compete on price.

Xcel, based in Minneapolis, and three other energy companies offered various proposals, mostly generators powered by natural gas. Xcel’s plan included a new gas generator at its Black Dog plant in Burnsville, where the utility intends to retire the remaining coal-burning units.

In a 50-page ruling, Lipman said “the greatest value to Minnesota and Xcel’s ratepayers is drawn from selecting Geronimo’s solar energy proposal …”

Xcel Energy — no stranger to controversy — isn’t that into the judge’s decision, and the energy company is writing up a response aimed at swaying the PUC. (As always, Xcel is willing to fight for what it it thinks is right… better for itself, not its ratepayers. To catch up a bit on Xcel’s relationship to solar, here are a few stories to check out:

Actually, it seems that Xcel isn’t so much against cheaper solar as it is against solar from anyone but itself.

Hopefully the Minnesota PUC is on the side of the people Minnesota and thus decides to concur with the judge in this case, but feel free to reach out and contact the PUC if you want to be sure the commissioners understand the value of solar in Minnesota.

Minnesota — Solar?

If you didn’t think snowy Minnesota was a likely candidate for strong solar growth, you’re probably not alone. However, it was recently identified by GTM Research as a potentially huge solar market. Utility-scale solar is cheaper due to economies of scale, but rooftop solar is also a great investment for homeowners and businesses there. As I wrote back in October, “for homeowners who go solar in Minnesota, you’re expected (on average) to get a 10% internal rate of return (IRR) on your investment, which beats the S&P 50-year CAGR of 9.9% — very, very good.”

Minnesota actually has a requirement that utilities get 1.5% of their electricity from solar power by 2020, which Judge Lipman noted these proposed solar projects could help with, and it has a 2030 goal of 10% electricity from solar.

For renewable energy as a whole, Xcel Energy is required to be providing 31.5% of its electricity from renewables by the end of 2020. With only 1.5% designated for solar (minimum), cheaper wind is clearly king. However, solar is an excellent match for times of peak demand when the wind isn’t always blowing, and as Judge Lipman has concluded, solar PV is now even cheaper than natural gas for that purpose.

Geronimo Solar Project Timeline

If approved by the PUC, Geronimo intends to build its proposed solar power plants in 2015 and 2016. It already has the necessary land, as well as extra land if an issue popped up with the preferred sites. If built, Enel Green Power — Geronimo’s financing partner — would have the first option to purchase the power plants. If Enel Green Power decided not to purchase them for some reason, Geronimo could then sell them to Xcel or another energy company.

Shining A Light On The Key Point

While most of us are not that interested in the electricity specifics of the state of Minnesota, the overall point of this story is huge: solar power can now outcompete natural gas in the US, even in northerly Minnesota.

Actually, pulling from a September CleanTechnica article, it’s much cheaper (despite what Xcel might like to contend): “rooftop solar in Minnesota costs 36-75% less than natural gas power plants in delivering peak energy.” And that’s not even counting harmful pollution and the associated health problems society must pay for electricity from natural gas.

With solar costs continuing to fall while natural gas prices rise, that price difference will only grow.

This article, Judge Rules Solar Power A Better Deal For Minnesota Than Natural Gas, is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

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‘Soft Costs’ Now the Largest Cost of U.S. Solar Installations

by Joshua S Hill.

U.S. Department of  Energy (DoE)  National Renewable Energy Laboratory (NREL) cost of solar chart.
U.S. Department of Energy (DoE) National Renewable Energy Laboratory (NREL) cost of solar chart.

Two reports published by the US Energy Department’s National Renewable Energy Laboratory (NREL) show that soft costs — such as financing and other non-hardware costs — now make up the largest section of solar installation costs, coming in at 64% of the total price for residential solar energy systems.

The two reports – ”Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. Photovoltaic Systems, Using a Bottom-up Approach and Installer Survey – Second Edition” and ”Financing, Overhead, and Profit: An In-depth Discussion of Costs Associated with Third-party Financing of Residential and Commercial Photovoltaic Systems” — combine to show just how soft costs are becoming an increasingly more important part of solar installations.

“The two new reports, along with previous reports, provide a comprehensive look at the full cost of installing solar, while delineating and quantifying the various contributors to that final cost,” NREL analyst Barry Friedman said.

The first report showed that in the first half of 2012 soft costs represented the majority of all costs — 64% of the total price for a residential system, up from 50% as identified in a previous report conducted in 2012, and similarly high percentages for small and larger commercial installations.

Residential soft cost categories for the first (2010 data) and second (2012 data) editions of the benchmarking study. For the first edition of the benchmarking study, 2010 “all other soft costs” had not been differentiated. For the second edition, we quantified five sub-categories within this broader category.

The second report focused on the five sub-categories identified in the previous report only as ‘other soft costs’ — namely, transaction costs, indirect corporate costs, installer/developer profit, supply chain costs, and sales tax.

This article, NREL: Soft Costs Now Largest Piece Of Solar Installation Costs, is syndicated from Clean Technica and is posted here with permission.

About the Author

Joshua S. HillJoshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium.   I love words with a passion, both creating them and reading them.

California’s Top Solar Cities are Median-Income Cities

Originally published on Cost of Solar by Zachary Shahan

Sunible, a company started by solar market data resource PV Solar Report, has a report on which California cities are installing the most solar power.

Completely in line with the what I wrote yesterday when discussing California solar leasing, and the day before when discussing the $34,260 or so in savings that an average California solar homeowner can enjoy (over 20 years), the report found that it’s not just the rich who are going solar anymore. Many households with average incomes are also now going solar, especially through solar leasing.

California's top solar cities are inland, and with median income.
California’s top solar cities are inland, and with median income.

The cost of solar is so much lower than it was even 2 or 3 years ago that many people have realized it’s not great for their pocketbook if they switch to solar power. $0 down or close to $0 solar leases also don’t hurt.

Many of the leading Solar Cities in California are median-income communities like Fresno, Clovis, El Cajon, and Chico,” Rosana Francescato of Sunible writes.

According to the most recent census data, Fresno’s median annual income was just over $41,000. Yet Fresno is near the top of the Solar Cities list, at #3 in installs for Q1 2013.

Given that about 75% of new California solar homeowners choose solar leasing over ownership, it’s also not surprising that the top solar cities in California are also places where solar leasing has seen the strongest growth.

In the cities with the most solar growth since 2008, TPO solar has increased substantially — an average of more than 104% from Q1 2012 to Q1 2013.

In that period, the city of Chico experienced a 153% increase in TPO solar installations.

Before rolling out the Top 25 California Solar Cities list, check out the following infographic, which Sunrun put together to display the rapid growth of solar in inland cities with median incomes… despite decreasing government incentives for solar.

It’s pretty clear — if you live in California and you own your roof, going solar is a no brainer (unless you’re insane… or have some unique issues with your roof that make going solar impractical).

Join the solar rooftop revolution! Just do it!

Now that we’ve done our best to get you to do the obvious, here’s the Top 25 California Solar Cities list for Q1 2013:

  1. San Diego
  2. Bakersfield
  3. Fresno
  4. Los Angeles
  5. San Jose
  6. Murrieta
  7. Clovis
  8. Corona
  9. Escondido
  10. Temecula
  11. Palm Springs
  12. El Cajon
  13. Santa Clarita
  14. Apple Valley
  15. Chico
  16. Palmdale
  17. Rancho Mirage
  18. Northridge
  19. Palm Desert
  20. Visalia
  21. Ramona
  22. Pleasanton
  23. Lancaster
  24. Riverside
  25. Rancho Cucamonga

This article, Top California Solar Cities Are Median-Income Cities, is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

Cost Of Solar Getting Competitive With Wind

by Giles Parkinson

Originally published on RenewEconomy.
By Giles Parkinson.

The cost of large-scale solar projects has fallen by one-third in the last five years and big solar now competes with wind energy in the solar-rich south-west of the United States, according to new research.

The study by the Lawrence Berkeley National Laboratory — entitled  Utility-Scale Solar 2012: An Empirical Analysis of Project Cost, Performance, and Pricing Trends in the United States” – says the cost of solar is still falling and contracts for some solar projects are being struck as low as $50/MWh (including a 30 per cent federal tax credit).

The LBNL study is the first detailed investigation on the costs of “big solar.” The US has more than 4,000 MW of utility-scale solar (any installation more than 2 MW) and has been building them since the 1980s. The US has more “big solar” than rooftop solar, in contrast with Australia, where nearly all solar capacity has been built on rooftops.

The most interesting observation is that solar is now competing with wind energy on costs. If this were to happen in the Australian market it would likely cause a rapid reshaping of the projects needed to acquit the 20 per cent renewable energy target, which is criticised in many quarters for being focused only on wind energy.

This graph above illustrates just how dramatic that fall has become, although it should also be noted that PPA prices for wind energy have also nearly halved in the past year, although the sample is small.

But here’s another reason why solar is attractive. Because solar generates its output during the day, when demand and wholesale prices are normally higher, it can generate much higher revenue than wind farms. LBNL quantifies this at around $25/MWh. “In 2012 and 2013, solar has given wind a run for its money,” the researchers say. “This is particularly true given solar’s greater time-of-delivery value to utilities.”

It also notes that wind energy and solar farms could be co-located because their output is complimentary, and infrastructure costs such as sub-stations could be shared.

berkely solar v wind

Both these observations are interesting for the Australian market, particularly for developers such as Infigen Energy and Pacific Hydro, which are looking to add solar to their wind portfolios and looking to bypass the blockade of the major utilities by either “playing” the merchant market – generating revenue from spot prices, or writing their own contracts. Both companies are looking at co-locating some wind and solar projects.

This next graph below shows the progress of the various technologies, and plant sizes, over the last 10 years. It is interesting to note that solar PV outnumbers CSP and CPV by a large margin, but smaller plants are often more cost-effective than larger ones. That’s because of the extra costs in permitting and other factors of large installations, and because most solar PV arrays are now built in small modules.

“Once you move beyond installing a few power blocks, economies of scale appear to diminish (or perhaps be offset by higher costs elsewhere),” the researchers note.

To illustrate the price falls, the LBNL study cites the Copper Mountain project in Colorado. It began with a CSP project, before making three separate additions using thin-film solar PV technology, and then a fourth with crystalline silicon-based solar PV modules.

The first two solar PV contracts in 2008 and 2009 were struck at $150/MWh for 58MW of capacity, the next stage was struck at $103/MWh for 150MW capacity, and last year a contract was struck for another 250MW of capacity at $82/MWh.

Given the underlying similarities among these four projects – location, duration of contract – it says that the near halving of prices over the three-year period can be attributed primarily to the declining cost of solar modules and other balance-of-system costs. (It would be interesting to see what the likes of Bjorn Lomborg, the new Coalition pin-up boy who opposes deployment on the basis that only R&D can deliver cost reductions, make of this).

berkley solar ppa

Another interesting observation from LBNL is that most of the contracts written in recent years do not escalate in nominal dollars over the  life of the contract. This means that in real dollar terms, the pricing of the contract actually declines.

This means that towards the end of their contracts, the solar plants (including PV, CSP and CPV) contracted in 2013 will on average will be delivering electricity at less than $40/MWh. This is likely to be considerably less than fossil fuel plants at the same time, given the expected cost of fuels and any environmental regulations.

berkley solar long term ppa

And here’s one final graph on capacity factors. It notes utility-scale solar installations with single axis tracking are achieving capacity factors of more than 30 per cent, while the best performing solar installations without tracking are more than 25 per cent.

berkeley capacity

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This article, Cost Of Solar Getting Competitive With Wind, is syndicated from Clean Technica and is posted here with permission.

About the Author

Giles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

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Solar Power’s Massive Price Drop (Graph)

by Zachary Shahan – Special to JBS News

Here’s another excellent cleantech snack for some Friday Fun. Thanks again to an active CleanTechnica reader and commenter for passing it along:

For more on solar power’s massive price drop and related stories, check out:

.

Repost.Us - Republish This Article

This article, Solar Power’s Massive Price Drop (Graph), is syndicated from Clean Technica and is posted here with permission.

About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

, , , , , , ,

About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

Read more at http://cleantechnica.com/2013/05/24/solar-powers-massive-price-drop-graph/#yeRfwt5EvXwxymH3.99

, , , , , , ,

About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

Read more at http://cleantechnica.com/2013/05/24/solar-powers-massive-price-drop-graph/#yeRfwt5EvXwxymH3.99