solar

Solar Series: Solar vs. the Utility

We hope you enjoy Part 3 of our "Solar Series". Click to view
Part 1: Decoding the Calculations and Part 2: Solar's Impact on Cost
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With the help of Titan Energy's procurement advisors, our customers, on average, have secured electricity prices ranging between $.0689 and $.097 per kWh since 2007.

But did you know that these numbers can actually help us determine who might be a good candidate for solar power?

The main reservation we hear from our customers is that solar may be more expensive than they're currently paying for from the utility. However, for this to happen, the $.0402 spread between the cost of solar power and grid power (mentioned in Figure 1, Column 5) would need to close. There are only two potential ways for this to occur: generation rates fall or poles and wires charges decrease over time.

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Most would argue the poles and wires charges will not fall because they only ever increase.

Assume, then, that those charges will stay flat over time, which leaves the generation rate as the only potential weak spot for the solar deal to invert. For that to happen, the contracted generation rate of $.083 will need to fall by $.0402 and therefore equal $.0428/kWh, assuming one could secure a generation rate at that price over a 20-year term, which is currently not possible given the way the market is structured.

Figure 3 (below) will graphically demonstrate the unlikelihood of this happening when compared to the customer’s actual generation rate history.

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