What does solar cost? Pricing on utility contracts is often opaque–and there are some good reasons for this (e.g. to promote competition). An exception to this is in Nevada, where there are legal requirements to reveal contracts. Our friends at Evolution Markets recently sent out an email that culled some publicly available data.
NV Energy has applied for approval of several bundled PPAs, PEC-only purchases, and amendments. The highlights are as follows.
New PPAs
Parties:NV and Ormat (Geothermal)
Doc: New PPA(Orni 32, Churchill County)
Price: $92/MWh + 1% Esc.
Provisions:20-yr term, 30 net MW (51 MW nameplate), Replacement Costs and ROFO; Development Security = $2,625,100, Operating Security = $5,250,200; COD depends on drilling schedule.
Parties: NV and Fotowatio (Solar PV)
Doc: New PPA (Spectrum Solar in Clark County)
Price: $121.75/MWh + 1% Esc.
Provisions:25-yr term, 30 MW of PV, Replacement Costs and ROFO; Development Security = $739K, Operating Security = $1,478,200; COD is 6 months post PUCN approval.
Parties: NV and NextEra (Solar PV)
Doc: New PPA (Mountain View Solar in North Las Vegas)
Price: $117.50/MWh + 1% Esc.
Provisions:25-yr term, 20 MW of PV, Replacement Costs and ROFO; Development Security = $528,500, Operating Security = $1,056,900; COD is 21 months post PUCN approval.
Amended PPAs
Parties:NV and Ormat (Geothermal)
Doc: Second Amendment to Orni 15 PPA
Provisions:NV agrees to changes in supply amount and milestones in exchange for a $842,704 “shortfall” payment from the Seller.
Parties: NV and Fotowatio (Solar PV)
Doc: Amendment to 06/09 PPA (Apex Solar in North Las Vegas)
Price: $128.50/MWh + 1% Esc.
Provisions:25-yr term, 20 MW of PV, Replacement Costs and ROFO; Development Security = $600K, Operating Security = $1.2M; COD is 6 months post PUCN approval.
Parties:NV and Amp Resources (Geothermal + Solar PV)
Doc: Third Amendment to ENEL Stillwater PPA (2006 Original)
Provisions:Seller wishes to add a 20MW solar PV facility to contract to make up for the anticipated shortfall in geothermal deliveries. After 2012, Seller will make up the shortfall with solar PECs. Pre-2012, NV may seek shortfall payments or replacement PECs.
Price: Product Rate (blended?) $69/MWh + 1% Esc.; Solar PECs = $30/MWh + 1% Esc.
Parties: NV and SolarReserve (Solar Thermal)
Doc:Second Amendment to Tonopah PPA (2009 Original)
Provisions: For its DOE financing, SolarReserve needs change-of-law language incorporated into the PPA. NV agrees, on the condition of increasing Development Security to $10M. Operating Security will remain at $10M.
PEC-Only Contracts (ed note: i.e. REC only contracts, where generation is consumed behind the meter, and primary value is from avoided utility purchase of energy)
Parties:NV and Amonix (Solar PV – PECs Only)
Doc: New PEC Contracts (North LV Water Reclamation Facility)
Price: $40/MWh + 1% Esc.
Provisions:20-yr term, 1 MW
Development Security = $29,785, Operating Security = $59,570; COD is 15 mos post PUCN approval.
Doc: New PEC Contracts (SCGC Facility)
Price: $40/MWh + 1% Esc.
Provisions:20-yr term, 0.58 MW
Development Security = $17,575, Operating Security = $35,150; COD is 15 mos post PUCN approval.
Doc: New PEC Contracts (Pecos Solar)
Price: $40/MWh + 1% Esc.
Provisions:5-yr term, 0.5 MW
Development Security = $13,610, Operating Security = $27,220; COD is 15 mos post PUCN approval.
What can we learn from this? Wholesale solar at this scale (20 to 30 MW) is around 12 cents/kWh (with 1% escalation). That’s a very competitive, scalable price for a lot of clean energy.
And the REC-only contracts are also a great deal from a ratepayer perspective. With these contracts, a customer installs a solar system designed to primarily serve on-site load. The main value of the system comes from reducing utility bills. In this scenario, the RECs are a marginal subsidy on top of the retail utility rate savings–they make up the difference to where the investment is economically viable for the customer. And in this instance, the ratepayers are making a very small investment–just $40/MWh, or 4 cents/kWh–to enable North Las Vegas Water Reclamation facility to get at 1 MW solar plant to treat LV’s effluent (insert jokes about clean energy for a very dirty job here). As the customer makes the bulk of the investment, this model is a very efficient use of limited incentive funds.
When we talk about creating both retail and wholesale markets, this is what we mean, and this is one of the reasons it matters.
Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.
