Study: PV would reduce electricity prices for Texan consumers

20. June 2012 | Applications & Installations, Industry & Suppliers, Markets & Trends, Solar superhero | By:  Becky Beetz

According to a new study, adding photovoltaics to the Texan electricity grid would "significantly" reduce energy prices.

Oil well in Texas

Further savings could have been made through the avoidance of costs associated with fossil-fuel plants.

The Brattle Group, which undertook the study – The potential impact of solar PV on electricity markets in Texas – for the Solar Energy Industries Association (SEIA) and the Energy Foundation, concluded that if photovoltaics had been added to the grid in Texas last summer, which saw unseasonably hot conditions, consumer electricity rates* would have vastly decreased.

In 2011, wholesale electricity prices were said to be high in many parts of the U.S. state, due to the hot summer, which in turn led to electricity scarcity. According to SEIA, the Electric Reliability Council of Texas (ERCOT) had to issue six conservation alerts as a result of the "record" electricity usage.

However, the Brattle Group found that between $0.6/MWh and 2.9/MWh could have been saved by installing more photovoltaics. Specifically:

  • One GW of photovoltaics would have reaped savings of $0.6/MWh
  • 2.5 GW of photovoltaics would have reaped savings of $1.5/MWh
  • Five GW of photovoltaics would have reaped savings of $2.9/MWh

"This would have lowered total wholesale energy payments by $155-$281 for each MWh of solar PV generation," wrote the group. It was additionally found that further savings of $52/MWh could have been made through the avoidance of  fuel, and operations and maintenance costs associated with fossil fuel plants.

In addition to lowering wholesale electricity costs, it said that incremental photovoltaic generation could "significantly reduce" total electricity production costs and greenhouse gas emissions "as it displaces generation from conventional fossil-fuel plants and these effects last  through the lifetime of the solar PV assets."

Overall, the study found that the total value of avoided emissions, production costs and wholesale power costs, could have been between $216 and $343/MWh.

Texas has an "energy-only" market, which is said to allow energy prices to hit as high as $3,000/MWh during scarcity conditions. This summer, the state is again predicted to suffer from tight electricity supply and higher rates. In addition to helping to lower costs, photovoltaics is said to be particularly effective since it can: be deployed in a decentralized manner; requires little lead time; does not face many regulatory hurdles; and it can be continuously scaled.

* Note: the study looks at the impact of photovoltaics on the average ratepayer and does not distinguish between system owners and other customers.

There is a common misconception that photovoltaics is more expensive than traditional forms of energy generation. Last year, for instance, Reuters reported that it "is up to eight times more expensive than conventional forms of power like coal and gas." However, as has been starkly highlighted, the reality does not reflect the rhetoric.

For more information, visit pv magazine’s Solar superhero page. In addition to an infographic for you to share, we have collated a battery of facts, which aim to debunk the false facts surrounding the solar industry.

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