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Report: more PV panels would have lowered energy prices in Texas last summer

A June 19 analysis from The Brattle Group found that increased solar PV capacity could have saved Texans up to $520 million last summer.

Commissioned by the Solar Energy Industries Association (SEIA) and the Energy Foundation, the report took Texas electricity data from the summer of 2011 and used two approaches to evaluate the potential effects of adding solar PV generation capacity.

The report stated that adding solar capacity to the Texas electricity grid could have significantly lowered prices energy prices – adding 1,000 MW of PV capacity could have reduced average wholesale energy prices by around $0.6 per MWh, 2,500 MW of solar PV by $1.5/MWh, and 5,000 MW by $2.9/MWh.

Wholesale energy payments for the “average” ratepayer (not system owner) would have decreased by $155-$281 for each MWh of solar PV generation.

Photo Credit: First Solar

The study further found that customers could have saved another $52/MWh thanks to the fuel and operations and maintenance costs associated with fossil-fuel plants that would have been avoided. All in all, customers could have saved $216-$343/MWh had there been greater PV capacity in Texas last summer.

“While currently more expensive than at least some other more conventional power generation options, solar PV’s costs are rapidly decreasing and solar PV does not seem to produce many of the environmental externalities of fossil-fired generation, and also does not face many of the same siting barriers,” said the report.

“Unlike some conventional generation technologies, solar PV can also be continuously scaled. As a result, solar PV may provide a feasible path to reducing high energy prices in areas where more conventional power generation options are not available.”

The report concluded that the short-term benefit of added solar PV generation would exceed the cost, at least during the summer months when energy prices are right.

“The total value of new solar PV systems is likely to be lower when calculated over the entire year and the short-term price reductions resulting from new solar PV likely are not a permanent benefit,” the report conceded.

“Nonetheless, especially in areas where it may be difficult to install new conventional power generation, solar PV, due to the fact that it can be installed in highly modular fashion, may provide an attractive option to address local capacity shortfalls leading to relatively high energy prices.”

Last summer was unseasonably hot in Texas, forcing the state utility to issue six conservation alerts due to record electricity usage. As a result, customers who volunteered for cutbacks in emergency conditions experienced electricity shut-offs. This summer, the situation may be similar.

“This study shows that not only can solar energy help lower costs for Texans, but that adding solar capacity helps address the state’s more urgent crisis of potential rolling blackouts during the hot summer months,” said Carrie Cullen Hitt, Vice President of State Affairs for the SEIA.

“The state’s electricity grid was pushed to the brink of failure last summer. As Texas leaders address ways to mitigate this risk and the state’s energy future, solar should be an important part of their plans.”

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