Southern California Edison recently filed an advice letter asking CPUC approval for the results of its 2009 renewable standard contract. The results are impressive.
The voluntary standard offer (not classic FIT per se, as it is not necessarily ‘must take’, but a fixed price standard offer nonetheless) is priced at the market-price referent (MPR—it’s the 20 year LCOE of a combined cycle gas turbine), available to all renewables, up to 20 MW.
http://www.sce.com/EnergyProcurement/renewables/renewables-standard-contracts.htm
In 2009, about 200 MW was contracted (and paid development security, so we can be assured they are real projects). 140 MW was PV. Here’s the advice letter (pdf) with the contract details.
Here’s the 2008 MPR price:
Note that pricing also uses a time-of-delivery adder (TOD). In SCE territory, if you model the TOD factor on expected PV performance, you get a levelized boost of about 1.35. So, take the applicable MPR, and multiply accordingly—it comes out to 15 -16 cents kWh.
Note that natural gas prices went down and the MPR went down about 20% this year. Not sure if this program would work this year at the lower price point.
Several points to make:
- This is a lot of solar at a low price point. Solar is getting cheap, and competes very well in CA.
- The clearing price of wholesale solar in CA is lower than retail rates. So, if you have load to serve, you are better off serving load then selling to utilities. This is why it is so critical to preserve a behind-the-meter market as well.
- Standard contract terms-and-conditions are important. A good one can level the playing field, reduce transaction costs, and is the key element in securing financing
- Winning PV contracts are 20 MW in size. To date, program hasn’t been successful with smaller size systems, or with the 2009 MPR. Also, SCE has the most solar-friendly TOD of all the IOUs in CA.