Rooftop solar is now cheaper than the grid in 42 American cities | Alternative Energy | Forums

might be almost time to pull the trigger

New numbers show solar-generated electricity is ready for head-on competition with utility-delivered electricity.

Nearly 21 million single-family homeowners in 42 of the 50 biggest U.S. cities can now expect to pay less for electricity from solar than for electricity they buy from their utility. In fact, the numbers show money spent on a residential solar system earns a better return than investing in Standard and Poor’s 500 index fund.

“Solar is now not just an option for the rich, but a real opportunity for anyone looking to take greater control over their monthly utility bills and make a long-term, relatively low-risk investment,” explains "Going Solar in America: Ranking Solar’s Value to Consumers in America’s Largest Cities," a new study from the North Carolina Clean Energy Technology Center.

The information gap

To breach the “clear information gap” between the popular presumption that solar energy is an expensive indulgence and the new reality that it is a competitively priced source of electricity, the paper uses a range of National Renewable Energy Laboratory (NREL) System Advisor Model (SAM) parameters and other factors to calculate rankings. The list for the top 50 solar cities was based on: 

1. First-year average monthly savings
2. Net present value (NPV) relative to a 25 year investment in the S&P 500 stock index
3. Levelized cost of electricity (LCOE) compared to the cost of electricity from the local utility

“We decided to use first year savings because NREL research shows customers tend to be more responsive to something that gives them greater benefits more quickly,” explained Senior Policy Analyst and report co-author Jim Kennerly.

Solar’s NPV was calculated for a 5 kilowatt system purchased with a 25-year, 5% loan and compared to an S&P 500 index with assumed SAM default parameters of a 6.61% annualized and dividend reinvested discount rate. It assumed a 2.7% inflation rate.

Kilowatt-hours from that same system now cost less than those from a residential customer’s local utility. “Of the single-family homeowners in America’s 50 largest cities,” according to the report, “9.1 million already live in a city where solar costs less than their current utility [retail] rates if they bought a PV system outright – and nearly 21 million (93% of all estimated single-family homeowners [that are customers of the utilities that serve] those cities) do if low-cost financing is available.”

A companion report, "Going Solar in America: A Guide for Homeowners Considering Solar PV in America’s 50 Largest Cities," explains how homeowners can take advantage of the solar opportunity.

Solar’s LCOE was based on SAM parameters, beginning with insolation, and was compared with Energy Information Administration (EIA) forecasts of utility rate increases of between 33% and 83%, depending on the city, over the 25-year PV system life.

“The average LCOE for a fully financed solar system in the country’s largest cities ranges from only $0.031 per kWh [Washington, D.C.] to $0.144 per kWh [Louisville, KY],” the researchers found.

The conclusion was straightforward. “If getting value for solar generation is tied to the retail rate, you are going to get to a very strong value proposition,” Kennerly said, “because utility rates tend to escalate reasonably predictably.”

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http://www.utilitydive.com/news/rooftop-solar-is-now-cheaper-than-the-grid-in-42-american-cities/352799/