First Solar completes initial phase of America's first solar plant to sell electricity on spot market


First Solar has announced the completion of the first 18 MW-AC phase of the Barilla Solar Project in West Texas, which will be 30 MW-AC when complete. This initial phase is in the final stages of the commissioning process, and may be the beginning of a new business model for the solar industry.

Barilla has no power purchase agreement, and First Solar plans to sell the electricity generated by the plant into the spot market on Texas' grid (ERCOT). While this is described as the "merchant" sale of power, First Solar notes that this may be a temporary arrangement.

“We're open to certain types of contracts for entities interested in using the output from our Barilla as a hedge against rising peak power prices, so we don't consider this a merchant plant, that's why we've called it an "open contract" investment,” explains First Solar Director of Regulatory and Public Affairs Colin Meehan.

“It's pretty clear that First Solar has been trying to shop this project for a utility off-taker,” explains GTM Research Solar Analyst Corey Honeyman. “They are banking on the near-term attractiveness of the wholesale spot market in ERCOT.”

While other operational solar plants in Chile sell electricity on the spot market, Barilla is the first such project to be completed in the United States.

Popular content

Texas' grid is relatively isolated from the rest of the United States, and the project benefits from both excellent natural solar irradiation and high spot prices. This is particularly true during times of peak demand in the hot summers, which coincide with hours of solar production.

“High peak power prices demonstrate the value that Barilla brings to the ERCOT wholesale market,” says First Solar's Meehan. “ERCOT is a dynamic market and recent decisions by the PUC to increase the wholesale offer cap and an administrative scarcity pricing adder definitely played a role on our decision to enter the Texas market with a competitive asset.”

GTM's Honeyman agrees that market conditions make Texas uniquely suited for this arrangement. He also says that while it may take longer for the rest of the United States, due to falling prices other parts of the nation are approaching a tipping point where merchant solar may be viable.

And while merchant solar brings fundamental risks and a higher cost of financing as a new business model, Honeyman says that Barilla could pave the way for more merchant solar in Texas. “When this project comes online and they see returns that pencil out well, it makes the case for additional projects in ERCOT.”

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact:


Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.