The cost of solar power

California’s Public Utility Commission (CPUC) last month reported to the state legislature on the cost of renewables.

The Padilla report, so-called because of a bill introduced by Senator Alex Padilla and passed in 2011, mandates the CPUC to publish the costs of renewable contracts and utility-owned generation every six months.

The first report was published in February last year and its aim is to at least partially lift the veil on the true cost of the secretive power purchase agreements in the Renewable Portfolio Standards.

Overall, the news was good. Contracts approved in 2012 were priced at an average of 9.6c/kWh to 9.9c/kWh. These costs are slightly lower than those approved in 2011, which were 12.6 c/kWh on average, said the report.

RPS procurement expenditures for 2012 were approximately 7.7c/kWh to 7.8c/kWh compared with last year’s average of 8.0c/kWh.

“Contract prices for 2012 show a steady decline from the prices in prior years (2003-2010). The downward trending prices prove that the renewable market in California is robust and competitive, and has matured since the start of the RPS programme,” it said.

But looking back at the data since 2003, the average contract price approved by the CPUC has increased.

“Contract prices for 2012 show a steady decline from the prices in prior years (2003-2010). The downward trending prices prove that the renewable market in California is robust and competitive, and has matured since the start of the RPS programme,” it said.

But looking back at the data since 2003, the average contract price approved by the CPUC has increased.

“One reason for this increase is that the IOUs contracted with existing renewable facilities at the beginning of the RPS programme and with mostly new facilities in more recent years in order to meet the ambitious 20% and 33% RPS target,” it said.

“These new facilities typically result in higher contract costs in order to recover the capital needed to develop new facilities. In addition, contract costs have increased in part due to changes in the technology mix, increases in commodity costs, and demand exceeding supply.”

The CPUC’s report confines itself to renewables, but the California Energy Commission (CEC) mandated another report that will actually shape the state’s energy mix over the next several decades.

Every year, the CEC prepares an Integrated Energy Policy Report (IEPR) that provides an overview of major energy issues and trends facing California and makes recommendations for the governor based on reliability, demand, resources, the environment, enhancing the state