Rooftop solar can actually be cheaper than utility-scale solar farms

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Even for solar advocates, it can be hard to shake Big Grid thinking. Most experts tell us that the economies of scale of utility-scale solar plants will always make them the cheapest way to build solar. But these lower costs rarely, if ever, benefit the most important group of all: the electricity customers and the communities they live in.

There are several reasons why cheap utility solar won’t necessarily lower costs for electricity customers:

  • First, the lower price of utility solar is offset, in part, by the costs required to deliver it to customers. Sometimes the distribution and transmission of a solar kilowatt hour can actually cost more than the generation of the kilowatt hour itself.
  • Second, utilities have huge sunk costs–like existing power plants and transmission upgrades–that can eat up any new savings a solar plant might provide.
  • Third and finally, US utilities are facing hundreds of billions of dollars in unpaid waste cleanup costs, like coal ash ponds, long term nuclear waste storage, and uncapped natural gas wells.  It is unclear who will pay these costs in the future but it is unlikely utilities can lower bills too far with these outstanding liabilities.

John Farrell, the Director of Energy Democracy at the ILSR puts it best, “local energy competes in an entirely different market.”

The Freeing Energy Perspective

In order for the clean energy economy to replace the current fossil fuel-dominated one, it will require contributions from all types of clean energy: wind, solar, geothermal, etc. And small-scale solar systems are frequently overlooked opportunities to further accelerate the shift to clean energy .

Small-scale solar systems offer many benefits to consumers including reducing the energy bills and creating far more jobs than utility-scale solar projects do (see Small-scale solar installations create 10-times more jobs per megawatt than utility-scale solar). 

If you’re interested in learning more about solar energy, be sure to check out our series “Solar Myths” where we debunk common misconceptions people have about solar.



3 Responses

  1. If you live in California, and have “Demand Charges” for a commercial building, the demand charges can actually be significant cost on your total electric bill. Especially if your employees plug in several electric forklifts during peak power times (now 4 pm to 9 pm) and add a 50 KW to 100 KW load, that is very easy to shift to the non peak hours between 10 pm and 6 am.

    Charging a electric vehicle at a commercial building between 4 pm and 9 pm in the summer can add a substantial penalty should the building management not know to avoid peak demand charge time of day to recharge the vehicles. Especially if the charger is 50+ KW and only needs to run about 1 hour at that high charge rate, and could run between midnight and 7 am, still getting the job done in plenty of time.

    Summer demand charges in San Diego are around $12 – $15 per KW. So a building using a average 65 KW to run it’s loads, lights, HVAC in the summer, they could be paying over $700 a month in demand charges. Should they plug in 1 EV 50 KW charger to a pickup for 1 hour each night at 5 pm, it could add $600 – $750 in demand charges to that bill.

    I think that SCE demand charges are even higher.

    In Portland Oregon, we do not have demand charges in commercial buildings, and only pay about $0.105 per KW at my house. So I can charge my 7.5 KW C-Max battery for about $0.70 and get 20 miles. That works out to about $3.50 per 100 miles on electric or 2.5 gallons and $10 (per 100 miles) on gas at $4 per gallon and 40 MPG.

  2. Not many realize that you can collect 10% – 15% more power at higher elevations that at sea level from solar PV panels. This is because the solar isolation is higher watts per square meter at 3,500 feet elevation compared to 500′ elevation in San Diego county when I measured it with a hand held watt per square meter monitor.

    Of course companies like HG Fenton installed many solar PV panels on their roof to reduce the demand charges, and that saves more than the actual electric cost reductions. So local generation saves the building owner a lot of money! And no voltage loss by moving the electricity from the solar farm to the load some 30 – 200 miles distance.

  3. You don’t need to post this, more for your information.

    The Ivanpah solar system is 377 MW and cost $2,200,000,000 to install. So about $6 per rated watt. It is much more expensive than the solar PV systems. It’s only advantage might be combined heat and power, so if located say next to a prison or greenhouse, they could use the waste heat after generating electricity to power the heating loads. It takes up some 1,600 or 3,200 acres, so it is not practical in populated areas. This power plant is built in California, near the Nevada border, just north of I 15. So about 60 miles from Las Vegas.

    With a solar pV farm, the cost is much closer to $1 per rated watt, and you basically don’t have much maintenance. At Ivanpah, they have a 377 MW steam boiler and turbine that must be monitored when it is running, with a staff of 3 or so people. So it is much more expensive to run than a PV system.

    There are several solar steam power generating stations in California. We had a engineer present the “Solar 1” system that he worked on the design to my 7th grade class in Huntington Beach, CA, back in 1978. His daughter was in my class too. It was built in Barstow. and engineered by McDonald Douglass Space Systems.

    California also has about 950 MW of geothermal steam turbines running in several locations.

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