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USA’s cheapest solar power in Austin, Texas – ~2.5¢/kWh for 150MW of solar electricity

Austin Energy is once again leading the USA with the lowest price per kWh from solar power. Intersect Power and Austin Energy announced a 150MWac solar power purchase agreement that seems to range between 2.35-2.725¢/kWh, and could be as low as 2.1¢/kWh.

When this project comes online in 2020, Austin Energy will be getting 51% of its electricity from renewable electricity sources.

Greentech Media reported on the Austin deal’s estimated economics. Exact pricing of the project wasn’t announced – only that the power company would pay from $10-12M/year for the 150MW plant’s electricity output for 15 years. The project is located in Western Texas on 1,700 acres of land – where solar resources are more than 20% greater than the Austin area. The developer, Intersect Power, suggested the project could be upsized by 20% to 180MW.

Recent bids from around the world confirm that this bid is not outside of the norm. After breaking 3¢/kWh in May of last year, a batch of solar projects have stood out globally. The world’s lowest price is currently in Saudi Arabia at approximately 1.79¢/kWh. Mexico also broke the 2¢/kWh barrier when they collected a 1.97¢/kWh bid at an auction just before Thanksgiving. Chile is on this list, with pricing around 2.148¢/kWh from bids that occurred in early November. And the United Arab Emirates is at 2.42¢/kWh.

The prior US low-priced deal, written by Tuscon Electric Power, was for a 100MW solar plant. This deal was connected to a large energy storage project which got headlines as it offered solar power around the clock at 4.5¢/kWh. The estimated price of this project is about 3¢/kWh, but official deal terms were not released (just as we don’t know the Austin price).

Austin Energy signed a deal for 3.8¢/kWh in 2015 that was, for a time, the lowest priced solar power in the world.

This deal is part of Austin Energy’s push to 65% renewable energy use by 2027. Austin has about 800 MW of solar capacity currently.

Electrek’s Take

There’s an unsung hero inside of this solar power deal – it’s the electricity transmission lines. This project is being built in a lower cost, less humid, and sunnier part of West Texas because of the power infrastructure built specifically to move wind and solar electricity across the state. As noted above, the area’s solar resources are at least 20% greater than that of the Austin region. There’s a lot of open desert land that can export clean solar electricity across the USA at some amazing prices because the southwest USA has some of the world’s best sunlight for solar power.

Considering residential solar? Understand Solar will connect you with local contractors, or allow me to give you a professional residential consultation.

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