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New Mexico Community Solar Comes In at a Record Low 4.5 cents per Kilowatt-hour

Distributed, community solar energy will be produced and sold in the U.S. at its lowest cost yet – $0.045 per kilowatt-hour (kWh) – come March 2018, according to the Rocky Mountain Institute (RMI). 

Chicago's SoCore Energy LLC is building a 3-megawatt (MW) solar photovoltaic (PV) energy project in Lincoln County, New Mexico, the power output from which will be purchased by the Otero County Electric Cooperative (OCEC) at $0.045 per kWh as per the terms of a fixed-price, 25-year power purchase agreement, according to a news release. https://rmi.org/about/news-and-press/press-release-new-mexico-record-low...

The makings of a community solar power project in New Mexico

OCEC covered the cost of land and grid interconnection for the Carrizozo solar project, as it's named. RMI did the project analysis and supported OCEC's competitive procurement process. 

OCEC is to receive the renewable energy credits (RECs) that result. The project doesn't receive state tax credits or subsidies though it does qualify for the federal solar investment tax credit (ITC). 

“The Carrizozo solar project allows us to deliver renewable energy to our members while also saving them money,” OCEC Chief Executive Mario Romero said. “Since OCEC purchases the energy produced by this project at such a great price, this project will allow all of our 14,000 members to benefit by reducing our overall cost of purchased power.”

Otero's first experience purchasing the power from a solar PV farm was back in 2014, a 76-kW array that was subsequently expanded to 150-kW. The member owned electric co-op also receives solar energy produced by two utility-scale projects from Tri-State Generation and Transmission Association, its electricity supplier.

Community, co-op solar on the rise

Community-scale solar arrays, as defined, generate between 0.5 MW and 10 MW of emissions-free electricity. They interconnect with local power distribution grids, RMI explains. 

“They sit in an economic sweet spot in the market and can deliver significant savings to electric cooperatives and municipal utilities across the country. Community-scale systems are large enough to access low costs through economies of scale and small enough to efficiently interconnect into distribution systems.”

In addition to emissions-free power, the Carrizozo solar project is expected to yield $550,000 in property tax revenue over its useful life. Furthermore, local jobs will be created during site development and construction. More than 25 contractors and other professionals will be involved in Carrizozo's construction. 

“The Carrizozo project points to the compelling customer savings, grid benefits, and clean energy resource energy providers can deliver via community-scale solar,” commented Stephen Doig, a managing director at RMI who co-leads the non-profit's broad-based efforts to increase the adoption of distributed renewable energy. “We hope what OCEC has accomplished here can serve as a model to scale similar distributed solar projects across the country.”

RMI expects to see more in the way of community solar power purchase agreements among municipal and member-owned electric cooperatives in New Mexico and across the U.S. It's working on similar projects in Colorado and Texas, and in New York State. On average, RMI expects they will produce and sell power at prices 30 percent below current grid electricity costs.

Andrew Burger's picture

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Discussions

Max Yanke's picture
Max Yanke on Dec 22, 2017 6:59 pm GMT

The ugly side to solar exists in British Columbia, a waterpower province.  Millions in public dollars are spent on grid tied PV solar while clean green water spills down the river. BC Hydro belongs to the residents of the province.  My city likely has the most absurd example.  The only city in western Canada with its own hydro electric plant belonging tot eh city residents, making huge profits, puts solar panels at the dam while cleaner greener water spills along with the huge profits.  A testament to the solar industry salesmanship, internet and misinformation that doesn't seem to be stoppable.

Brian Jarvis's picture
Brian Jarvis on Jan 5, 2018 5:42 am GMT

Finanically the system would not be viable without subsidies in one form or another. 

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