The Sacramento Municipal Utilities District–long a leader in solar development–recently put together a feed-in tariff (a standard offer to buy at a set rate) based on a time-differentiated avoided cost calculation. It was available to all renewable technologies, allowable project size was up to 5 MW, and program capped at 100 MW. If you model the tariff rate based on the expected output of a photovoltaic system, you get somewhere around 14c/kWh, 20 year levelized. Tariff doc is here (pdf).
Within the first week it was offered, all 100 MW sold out—all of it PV– and they have closed the queue. Press release here (pdf).
SMUD required a $20/kW development security, so no one can walk away from a project without losing significant $. I think we can conclude that these are real projects.
Here’s the actual queue (pdf), and more information about SMUD’s process here.
Note that SMUD’s process allowed participants to pick on-line dates; if you look at the queue you will see that the online date for much of it is in 2012–module prices will likely continue to go down, and be cheaper then.
SMUD seems quite pleased with the result. That’s a lot of solar, at a great price-point. Solar is getting cheap, and cheap solar means big solar.
It’s also worth noting that this is just one solar program that SMUD offers. For behind-the-meter generation, they also offer net metering and incentives for both PV and solar hot water. They also offer an innovative community solar program called SolarShares.
There are two markets for solar: retail and wholesale, and SMUD has policy growing both.
ADDED:
Tom Beach of Crossborder Energy calculated the average price that SMUD will pay to the responding solar projects, for a variety of orientations and either of two fixed tilts (15 or 38.5 degrees), 1-axis tracking, or 2-axis tracking. He used the SMUD prices for a 2012 start date, and the 20-year present value calculations for the revenues assume an 8% discount rate. Results here (pdf).
