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.

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.

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• From Sand to Solar

Ormat Technologies, Inc. announced this week that it has signed a 20-year power purchase agreement (PPA) with NV Energy, Inc. for the purchase 30 megawatts (MW) from the McGinness Hills Geothermal project, which is currently under construction.

The PPA is subject to various approvals including the approval of the Public Utilities Commission of Nevada and is projected to come on line in 2012.

When completed, the McGinness Hills project will increase the total output supplied from Ormat to NV Energy, Inc. to approximately 135 MWs, helping NV Energy to meet its renewable energy requirement. Nevada’s renewable portfolio standard legislation requires 15 percent of all electricity generated in the state to be derived from new renewable energy sources by the end of 2012.

Dita Bronicki, CEO of Ormat said, “We have enjoyed a long and successful relationship with NV Energy and are grateful for its support of geothermal power. This PPA is further evidence that geothermal can supply a significant amount of power and is a preferable choice given its cost effectiveness, reliability and baseload nature.”

Ormat plans to apply for federal stimulus funds to help pay for the project, including investment tax credits or performance tax credits, and an Energy Department loan guarantee to back debt financing.

The McGinness Hills project will consist of Ormat binary energy converters that re-inject the geothermal fluid produced.

Ormat Technologies is the Reno, Nevada-based subsidiary of Israel-based Ormat Industries.

Article appearing courtesy of Cleantech Investing in Israel

[photo credit: Ormat]

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