Austin Energy: Solar Drops Below 5 Cents Per Kilowatt-Hour

Austin Energy just signed a deal with Recurrent Energy to buy solar-based electricity for “less than five cents per kilowatt-hour.” That's significantly below the cost of fossil fuels. Bret Kadison, COO of Austin-based Brazos Resources, an energy investment firm, said this was "a highly competitive solicitation." Kadison notes, "This is below the all-in cost of natural gas generation, even with low fuel prices and before factoring in commodity volatility and cost overruns." He also points out that the original RFP was for 50 megawatts, but the utility ended up buying 150 megawatts "in a red state where hydrocarbons dominate the political landscape." GreenTech Media says: The 5-cent price falls below Austin Energy's estimates for natural gas at 7 cents, coal at 10 cents and nuclear at 13 cents. It has also been suggested that a developer could overbuild the solar project beyond the contracted capacity and sell into the spot market if the developer gained approval from ERCOT. Austin Energy has a 35 percent renewable energy resource goal by 2016 and a solar goal of 200 megawatts by 2020. The utility is currently at about 25 percent, much of it made up by its 850 megawatts of wind.

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