Monday, September 10, 2012

Stunning Fact: PA's Biggest Solar Farm To Cost Just $1.80/Watt!

The Brits are coming to Pennsylvania! Well, sort of. A renewable energy company owned by BP is planning to build what will be Pennsylvania's largest solar farm but the cost of the new solar farm is even more important.

Incredibly, the $2 per watt barrier will be breached by a new solar farm in Franklin County that is scheduled to be completed in 2014. Orion Renewable Energy Group is building a 14 megawatt, $25 million solar farm in Franklin County that will cost just $1.80 per watt fully constructed.
The project will more than double the 6-MW facility in Lancaster that is nearing completion and is  Pennsylvania's largest solar facility.

The Orion farm will be the first in Pennsylvania to break the $2 per watt mark, to my knowledge.  Indeed, its $1.80 per watt cost is without the benefit of any tax credits or others incentives.  The cost falls still further--probably to below--$1.20 per watt with incentives.

My rough calculation is that the farm will produce power for about 7 cents per kilowatt-hour (and possibly less) without incentives and below 5 cents per kilowatt-hour with incentives.  Given those costs, the farm could recover its investment by selling into the PJM spot market, since most of its power production would be during peak hours, when higher market prices prevail.  The farm will also qualify for PJM capacity payments, because the facility will indeed produce significant output during the hottest hours of the year when PJM total demand is highest.

The Orion Renewable Energy Pennsylvania facility is a major milestone on the march to $1 per watt solar.  That price is now in sight, and, when it is achieved, solar will become a dominant power source.


  1. John, do you know off the top of your head what the price per watt is for natural gas, coal, and nuclear? Just trying to see how the $1.80 per watt solar compares.

    Thanks in advance.

    1. To simplify, electricity generation costs are a function of capital costs, fuel costs, and operating costs. Gas has low capital costs but variable and in the past high fuel costs. Wind and solar have zero fuel costs but high capital costs. Wind and solar also have very low operating costs (labor and so forth). The capital costs of a gas plant is about 95 cents per watt.

  2. Large commercial systems have had a habit of leaking extra costs. One and two MW systems have come in over 4 dollars a Watt due to costs such as adding long line interconnects and other requirement. At under two dollars a watt , this is an outlier. Hope ey make it. Must be using outsourced migrant worker labor.

  3. It doesn't mention how the cost reduction was achieved!