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How and Why Utilities Make Solar Look Expensive


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Lots of folks read news reports written either by well meaning reporters who have no clue how to fact check or learn about solar enough to present opposing facts from the utility's statements. This article is pretty incredible in its simplicity. In Germany I read the regrets of power utilities that opposed solar thinking, like before, hoping it would go away. Now they are bankrupt or heading that way fast while the other power companies who progressed with new tech continue to thrive. The German utilities that embraced renewables are in the vanguard of shining examples (pun int.) of how even a country with far less solar intensity than the US, is sooner to be all renewables, than most other developed countries. I remember a commentary saying Germany is successful because they get more sun than the US! Astounding willful ignorance. Berlin is actually on the same latitude as Calgary Canada. And latitude determines solar intensity. The ocean currents on the coasts determine temperatures. For a simple map go here and look at the maps for Berlin overlaid where Calgary is: http://a.wholelottanothing.org/2011/03/north-america-western-europe-equivalent-latitude-maps.html This is an important point because despite latitudes North of Oregon and Seattle it works. It relates because Arizona has the most sunlight intensity in the US. The article below becomes easier to understand, knowing those few facts going in.


But the technology has matured, and it is pretty hard to pretend that TEP is making any sense at all.




"I’m visiting the wonderful folks from Sustainable Tucson in Arizona next week to talk about the opportunities that solar and clean energy offer their local economy. In preparation, I’m looking at their current monopoly electricity provider, Tucson Electric Power. Remarkably, the utility acquires just 4% of its electricity from renewable resources (and over 70% from coal), despite being at the heart of the best sunshine in the country. The red arrow shows Tucson on this map of the nation’s solar resource.


Despite a world-class resource, the city’s utility intends to avoid major solar investment by pretending it is too costly.


The utility’s 2014 resource plan suggests that it hasn’t grasped (or refuses to seize) the opportunity. Although they forecast growth in renewable energy by 600 megawatts (MW) in the next 15 years, it’s only half the capacity increase they intend for natural gas (1200 MW).


Why shortchange solar? It’s pretty easy when you dramatically exaggerate its cost.


In TEP’s integrated resource plan for 2014, they estimate the cost of new natural gas generation between $88 and $119 per megawatt-hour (or 8.8 to 11.9 cents per kilowatt-hour, the unit of measure for residential consumption). For solar generation, they suggest, the cost is over 16 cents per kilowatt-hour (kWh).


But for a sunshine resource, TEP’s calculation is a bit shady.

For starters, it includes a component for “system integration and backup costs” for 5.2 cents per kWh. This means that TEP implies it must build or buy backup generation for any moment that the sun is not shining at maximum capacity.

Here are several reasons that this line item is total crap:


(See article for detailed crapification of the utility claims.)


In other words, TEP has falsely inflated the cost of solar by 45% percent.


Cutting that single line out, we have a remarkably different picture. Now solar at 11.1¢ per kWh is competitive with the proposed natural gas plants at 8.8-11.9¢. Keep in mind that almost all the solar costs are upfront and that fuel costs are a guaranteed zero, whereas any volatility in natural gas prices will be passed through to ratepayers. See chart below for a retrospective on natural gas price volatility (with Energy Information Administration price forecasts) and solar price volatility. The irony is that TEP is completely upfront about a forecast doubling of gas prices by the end of the 15-year planning horizon (p295), but since those costs pass through to ratepayers…


The solar cost hijinks don’t stop with backup and integration costs.


A price of 11.1¢ seems more reasonable, but compare it to the System Advisor Model from the National Renewable Energy Laboratory. This software package models the solar resource and cost for the entire country, and its default values incorporate years of data tracking on solar costs. Not including any incentives, and with a capital cost that’s 15% higher (per Watt) than the $1.99 used by TEP, the model spits out a levelized cost for solar of 7¢ per kilowatt-hour. Throw in the federal 30% tax incentive and the model suggests that the breakeven price for a 1 megawatt solar array in Tucson is 4.5¢ per kilowatt-hour, 60% lower than TEP’s figure!


But don’t rely on cost modeling. Five years ago, Pima County signed a power purchase agreement for a solar array at the Roger Road Wastewater Reclamation Facility for just under 10¢ per kWh. It has another contract for the 5 MW Prairie Fire Solar Plant to buy electricity for 9.3¢ per kWh. In 2014, Chief Contracts & Procurement Manager Terry Finefrock says the county signed another purchase agreement for solar on its operations center at Green Valley for 5.7¢ per kWh (which compares to the the 4.5¢ figure from the model above plus a small margin). In other words, Tucson residents and businesses can already buy solar for one-third the cost the utility suggests in its official resource plan!"


That very informative article with sunshine charts and cost charts is a must read for folks that like to be accurate about energy costs, and folks who oppose anything they perceive as having a "Green tax" as was the case thirty years ago. That was then, this is now. The willfully ignorant can't be helped. The easy to read article can be found here: http://ilsr.org/utilities-solar-expensive/

http://www.rvroadie.com Email on the bottom of my website page.
Retired AF 1971-1998

When you see a worthy man, endeavor to emulate him. When you see an unworthy man, look inside yourself. - Confucius


“Those who can make you believe absurdities, can make you commit atrocities.” ... Voltaire

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Derek, unfortunately you are not going to convince anyone opposed to renewable energy that solar is a good thing. Or even viable. It is - but it is akin to convincing someone opposed to firearms that they are safe and a good thing. Not going to happen.


I'm not saying solar is a total answer. It is simply PART of an answer that does not include fossil.

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I totally agree Jack.

Wind, water, traveling wave reactors, micro grids, geothermal, even wave energy are all being tapped. I'm in the middle of a whole house backup genset upgrade for the new house which will be propane because I can't wait for two years in line for the Powerwall. If I could buy one today I would and switch to grid powered back up but we are so hot here it is still cheaper for over 20kw of backup power to run A/C to stick with propane until I'm ready to go all solar and off grid. I hadn't kept up as much with wind, but recently read of an island in Alaska that with one wind generator and some energy storage they will be able to forego spending any more on diesel for their generators. One windmill!


I am totally aware that these articles are for the folks wanting to keep abreast, as I said about willfully ignorant. Everyone is entitled to think fossil energy's demise as the only source of energy is forever, or that they will refuse renewable energy if offered. I get that bud. We are all ignorant, just on different subjects. Ignorant isn't a bad word for those who have open minds. I am ignorant about lots of things. Some I'm not willing to learn either until I need to. Some folks are stupid in the world and I long ago learned you can't teach stupid.


I prefer old cars with old non electronic systems that I could work on easily. I am not willing to pay for custom made parts nor miss the reliability of modern vehicles. Remember when folks like us refused to buy non American products, and now we don't look too hard under the hood of American brands? At some point in the future the inevitable will happen and all the resistors to change will go with the flow.


Once we learn something, it is pesky. Proven facts stick around forever. We can't unlearn them. Like a good education, they can never be taken from us.


BTW I just posted this elsewhere but an article about the Powerwall backup battery cost just came out here: http://cleantechnica.com/2015/05/13/lets-get-straight-tesla-powerwall-does-3000/?utm_source=Cleantechnica+News&utm_medium=email&utm_campaign=960b88bcc2-RSS_EMAIL_CAMPAIGN&utm_term=0_b9b83ee7eb-960b88bcc2-331970081


I compared that cost to my propane whole house backup system's initial cost over in finances and investing.


I'm OK with the naysayers. Like the folks here in 2005/6/7 stating unequivocally that with their electrical/engineering/math/ or according to X non source Tesla could never bring any EV to market, and if they did no one would want it. Then the Roadster went into production and sold out the entire run save the last few months when they announced he Model S, and IPO'd. And for the first year folks put 100% down in advance to secure a Roadster delivery date.


I can wait for reality to prove out. See the big boys here, and whole countries abroad are now backing, and refining, all renewable technologies. Inowledge today doubles every year I think I read. I don't think we'll have long to wait.


And yeas, when my number comes up for my Elio autocycle, I will be getting it too! Just because I choose not to afford a Tesla today does not mean I have to be the Fox, in the Aesop fable about the fox and the grapes. See, I can get the grapes today. But I can wait until they have reached full sweetness.


http://www.rvroadie.com Email on the bottom of my website page.
Retired AF 1971-1998

When you see a worthy man, endeavor to emulate him. When you see an unworthy man, look inside yourself. - Confucius


“Those who can make you believe absurdities, can make you commit atrocities.” ... Voltaire

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