Utility-scale solar photovoltaic systems in the U.S. are more cost effective than residential-scale (rooftop solar) PV systems as a vehicle for achieving the economic and policy benefits of PV solar, according to a study by the Brattle Group.
The key findings of the study include:
· The generation cost of energy from 300 MW of utility-scale PV solar is roughly one-half the cost per kWh of the output from an equivalent 300 MW of 5kW residential-scale systems when deployed on the Xcel Energy Colorado system, and utility-scale solar remains more cost effective in all scenarios considered in the study.
· In that same setting, 300 MW of PV solar power deployed in a utility-scale configuration also avoids about 50 percent more carbon emissions than an equivalent amount of residential-scale PV solar.
“Over the last decade, solar energy costs for both rooftop and bulk-power applications have come down dramatically,” said Dr. Peter Fox-Penner, Brattle principal and co-author of the study. “But utility-scale solar will remain substantially less expensive per kWh generated than rooftop PV. In addition, utility-scale PV allows everyone access to solar power. From the standpoint of cost, equity, and environmental benefits, large-scale solar is a crucial resource.”
Using real-world scenarios based on data from Xcel Energy Colorado, the study compares the per-MWh customer supply costs of adding 300 MW-DC of PV panels in the form of either 60,000 distributed 5 kW rooftop systems owned or leased by retail customers, or 300 MW of utility-scale solar power plants that sell their entire output to Xcel Energy Colorado under long-term power purchase agreements.
The analysis finds that projected 2019 utility-scale PV power costs in Xcel Energy Colorado’s service territory will range from $66/MWh to $117/MWh (6.6¢/kWh to 11.7¢/kWh) across all scenarios, while projected power costs for a typical, customer-owned PV system will range from $123/MWh to $193/MWh (12.3¢/kWh to 19.3¢/kWh). These prices are based on historical data, and are not necessarily reflective of current market prices.
The study attributes the large difference in per-MWh costs between utility- and residential-scale systems primarily to economies of scale and greater solar electric output resulting from optimized panel orientation and tracking assumed for utility-scale systems. The improved orientation and tracking of utility-scale solar also result in a higher capacity factor that causes it to avoid about 50 percent more carbon dioxide emissions than the same capacity of residential-scale solar PV on the Xcel Energy Colorado system.
The reason utility-scale solar saves so much more carbon than rooftop PV is because the solar energy per MW is much higher on utility-scale due to better placement and tracking capability.