In terms of a vehicle for achieving economic and policy benefits of photovoltaic solar in the U.S., utility-scale PV systems are significantly more cost-effective than residential-scale (rooftop) PV systems, according to a study from global consulting firm The Brattle Group.
The study, ‘Comparative Generation Costs of Utility-Scale and Residential-Scale PV in Xcel Energy Colorado's Service Area,’ is the first to focus on a solar-to-solar comparison of equal amounts of residential- and utility-scale PV solar deployed on an actual utility system, says the firm.
Applying real-world scenarios based on data from Xcel Energy Colorado, the study compares the per-megawatt-hour 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 across all scenarios.Â Projected power costs for a typical, customer-owned PV system will be roughly twice as much – a range of $123/MWh to $193/MWh. (These prices are based on historical data and are not necessarily reflective of current market prices, notes The Brattle Group.)
The study attributes the large difference in per-megawatt-hour 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 a 50% reduction in carbon-dioxide emissions compared to 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 that the solar energy per MW is much higher on utility-scale due to better placement and tracking capability, according to the study.
‘Over the last decade, solar energy costs for both rooftop and bulk-power applications have come down dramatically,’ says 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.’
The study is authored by Bruce Tsuchida, Dr. Sanem Sergici, Bob Mudge, Will Gorman and Dr. Peter Fox-Penner of The Brattle Group and Dr. Jens Schoene of EnerNex. The report was prepared for First Solar, with support from the Edison Electric Institute.
The full report can be viewed here.