Which Is Cheaper - Rooftop Solar Or Utility-Scale Solar?

Solar Energy / Economics

Date posted: 07/30/15

Dr. Conca reports that the Brattle Group, with support from the Edison Electric Institute, just released a study concluding that utility-scale solar photovoltaic (PV) systems in the U.S. are more cost effective than residential-scale (rooftop) PV systems in achieving the economic and policy benefits we all expect to come from the widespread use of solar energy. But it may not be that simple and depends on what goal you have as a user. The study was commissioned by First Solar, one of the largest solar companies in America. Titled Comparative Generation Costs of Utility-Scale and Residential-Scale PV in Xcel Energy Colorado Service Area, this study is the first to focus on a solar-to-solar comparison of equal amounts of residential-scale and utility-scale PV solar deployed on an operating utility system. The study found that the cost of generating energy from 300 MW of utility-scale PV solar is roughly one-half the cost per kWh of electricity produced from an equivalent 300 MW of 5kW residential-scale systems when deployed on the Xcel Energy XEL plus 1.68 per cent Colorado grid. Utility-scale solar remained more cost effective in all scenarios considered in the study, scenarios having different tax credits, monetizations, and inflation rates. Note that these are actual costs to produce a kWh, not levelized costs, and do not include finance issues, subsidies or special markets, taxes and other costs that are not construction, production or fuel. Levelized costs for utility-scale solar, coal, nuclear and hydro are 13.0 cents per kWh, 9.8 cents per kWh, 9.3 cents per kWh and 11.7 cents per kWh, respectively, very different from actual costs.