Purchase agreements for wind farms and solar projects in the United States continue to grow at the cost for wind energy and solar power decreases.
25% of all contracts for wind power are in Texas and they are regularly below $30/MWh, with some are as low at $25/MWh. Advances in equipment is lifting capacity factors by 5 percentage points. Texas’ excellent wind conditions mean that wind farms are getting capacity factors in the high 40% or low 50%. Half of this occurs during peak load, which defies the popular notion that wind is an off-peak power source.
In Colorado, Xcel, a local utility, announced new contracts for solar PV plants below 6c/kWh ($60/MWh), making it the lowest solar pricing had seen in the US. This information confirms a recent survey by the National Renewable Energy Laboratory, which found pricing in that range and with no inflation kicker. This means the solar plants would be producing for an effective $40/MWh by the end of their contracts.
This equates to depreciated fossil fuel plants since the variable costs of gas-fired plants are likely to be at least $30/MWh, not including capital costs.
Even fossil fuel plants in their prime are being replaced by solar PV plants, a harbinger of things to come.
