Solar storage has reached an inflection point in cost with new Natural Gas Combined Cycle (NGCC) plants in many regions of the United States, competing both operationally and financially.
The findings are part of a study by Fluence and a group of MBA candidates at the Tepper School of Business at Carnegie Mellon University, which analyzed data from 435 NGCCs across America to see how solar financially measures up against natural gas.
“In recent years, a consensus has emerged across the energy industry – and among regulators –that utility-scale solar-plus-storage (S+S) is now an economically viable alternative to natural gas peaker plants, “ the report states.
S+S is a battery that is charged and holds the energy generated by a connected solar system such as a photovoltaic one.
The study uses the levelized cost of energy as the standard unit of measurement for comparing different forms of energy generation and assumed a project lifetime of 30 years, beginning in 2020.
Factoring in a 30% federal Investment Tax Credit (ITC), the researchers concluded solar is more cost-effective in four out of the five grid service areas it identified. Using an example of a hypothetical S+S facility in California, the paper shows that the energy generation cost per megawatt-hour (MWh) would only be $39-48 using solar, as compared to $60-116 per MWh when using natural gas.
While the 30% ITC rate is only available for systems placed in service through December 31, 2019, before its rates phase out to 26 percent, 22 percent, and then zero percent each subsequent year, the research claims that S+S can still compete with NGCC financially in locations such as California and mid-continental US, with high solar irradiance or attractive prices for ancillary services.
Unlike natural gas, homeowners can generate their energy with solar, allowing them to become more independent from the fluctuating prices of utility companies. GoGreenSolar has professionals and DIY assistance for those looking to enjoy the benefits of utilities and take advantage of the ITC and S+S energy systems.