Can Solar Save Texas’ Bacon When Summer Sizzles?

Summer is here, and that means it’s gonna get hot in Texas, where fast-growing energy demand combined with extreme weather has at times challenged the ability of the state’s power plants to keep up, sending prices soaring. One way out of the trouble? More solar PV, according to a new study.

True, the study [PDF] was paid for by the Solar Energy Industries Association (SEIA) and the pro-renewables group Energy Foundation. And true, additional power of any sort would make life easier and less costly for Texas grid operators, power utilities and consumers through the endless days of 100-degree-plus temperatures that keep air conditioners roaring.

CPS Energy, San Antonio Water System, SunEdison

image via CPS Energy

But The Brattle Group found solar could have been a uniquely apt answer to the state’s energy woes during the epic hot summer of 2011 — suggesting a path forward as energy demand continues to rise.

“Since solar PV can be deployed in a highly decentralized manner (as compared to utility-scale generation), requires little lead time, and generally does not face siting or other substantial regulatory hurdles, solar PV can be effective in offsetting the potential effects of extremely high prices,” the report said. “While high prices, in theory, attract new entry, in many cases, there are significant barriers to entry such as difficulty in permitting and siting and lack of cost-effective local infrastructure. Thus, solar PV may be effective in reducing the effects of sustained high prices in areas with limited transmission access and where siting larger energy facilities is a challenge.”

The report went at the possible impact solar could have had in summer 2011 in two ways: by overlaying PV’s contribution onto historical data, and by building models of the electricity market and then factoring how the presence of differing levels of PV might have shifted cost outcomes.

“We estimate that adding 1,000 megawatts (MW) of solar PV could have reduced average wholesale energy prices by approximately $0.6 per megawatt-hour (MWh); 2,500 MW of solar PV by $1.5/MWh; and 5,000 MW by $2.9/MWh. This would have lowered total wholesale energy payments by $155-$281 for each MWh of solar PV generation,” the report concluded.

But that’s not all. “Avoiding fuel, operations and maintenance costs associated with fossil fuels plans could have saved customers an additional $52/MWh,” kicking the full value of PV to customers up to $520 million, the SEIA said in a statement released with the report.

Brattle didn’t get into the cost side of the equation, but solar has been on a steep cost decline in the past few years. Meanwhile, the economics of wind figure to become less attractive if the federal production tax credit isn’t renewed soon — and wind has been a chief source of new power in Texas in the past decade.

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