New Mexico utility to buy solar power at lower price than coal by Jeff Spross

The economic viability of solar power is advancing rapidly. It’s actually already more then competitive within certain markets, and the price of solar panels saw a precipitous decline over the last four years.

In fact, solar technology has been advancing so rapidly that analysts have had troublekeeping their models up to date. When the Electric Reliability Council of Texas revised the circa-2006 assumptions about the state of technological development in its economic models, it found massive increases in the economic viability of wind and solar power, making them competitive with natural gas within the state over the next twenty years. Former Energy Secretary Steven Chu predicted in 2011 that, along with wind, solar would be no more expensive than oil or natural gas by the end of the decade.

The latest evidence of solar power’s rise comes via Bloomberg: El Paso Electric Co., a southwestern utility, has agreed to purchase electricity from a New Mexico solar project owned by the solar panel manufacturer First Solar, for a price lower than the going rate for coal:

First Solar bought the 50-megawatt Macho Springs project from Element Power Solar, according to a statement yesterday. El Paso Electric Co. (EE) agreed to buy the power for 5.79 cents a kilowatt-hour, according to a Jan. 22 procedural order from the New Mexico Public Regulation Commission.

That’s less than half the 12.8 cents per kilowatt-hour average price for new coal plants, according to data compiled by Bloomberg. Thin-film photovoltaic power typically sells for 16.3 cents a kilowatt-hour, according to Bloomberg New Energy Finance.