Going 10% solar would save Pennsylvania $619 million per year

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It’s becoming quite clear that adding a decent amount of wind and solar power to the grid not only lowers emissions, but costs as well. We’ve seen projections in Indiana of $4.3 billion saved by 2035. Colorado numbers suggest that if we close all the coal by 2025, add 8 GW of wind, 2.8 GW of solar and 765 MW / 3.1 GWh of energy storage, we will see the retail price per kilowatt-hour of electricity fall from 10.2¢/kWh to 9.7¢/kWh. PacifiCorp, Florida Power & Light, and so many other utilities see this same pattern.

In a study commissioned by Community Energy from PowerGEM, Pennsylvania 2030 Solar Generation Study (pdf), it was found that by installing 7.5 GWac of solar power by 2030, the state of Pennsylvania would save $619 million a year in wholesale power costs, and would lower the costs to the multi-state PJM Interconnection region by $3 billion a year.

The model projects 5.1 GWac of utility scale solar, and 2.3 GWac of distributed solar power.

The study first looked at a projected stability report for the year 2030 done by PJM that saw a needed $368 million in transmission upgrades. Then the study added in the 7.5 GW of solar power, and did another stability analysis and found that nine transmission grid upgrades would be needed costing approximately $294 million (bottom line of table above) – just under 4¢/Wac. The report suggested that these costs would be borne by the solar power developers, and not directly by ratepayers.

The study then made judgment calls about the savings that solar would bring. Energy savings and wholesale price reductions were noted as solar generates peak power with no additional cost during the hours of the day when demand is highest and generation costs are at their peak, a concept known as “peak shaving” or “price suppression.” The report suggests that it would lower the wholesale price of electricity across the state of Pennsylvania (below left) from $40.1/MWh to $37.6/MWh, equivalent to $619 million a year. The lower right image shows that the broader PJM Interconnection region (below right) will save just over $3 billion a year.

Roughly speaking, 7.5 GWac is roughly 9.4 GWdc, which would cost roughly $10-15 billion dollars. Meaning, that the broader power grid’s savings would be enough to cover the cost of the solar (before considering selling the electricity) in 3-5 years.

This reality has been shown in California and New England – of course we see California pricing sometimes hitting $0/MWh in the daytime, but we’re also seeing solar in New England saving money. A report analyzing the week of a heat wave in the Northeast estimates that solar power saved $30 million in wholesale electricity costs due to lowering demand at its peak during mid-day – including $6.7 million in savings on July 3rd. In Vermont last summer we saw solar+storage saving $500,000 during high demand moments on the power grid.