Solar Power Benefits Taxpayers

Published September 10, 2012

A new report finds solar PV installations deliver savings to ratepayers and taxpayers by $0.15-$0.40/kWh. Here’s the breakdown of solar power’s public value into nine accrued benefits:

1. Saves money on wholesale energy
Locally generated solar electricity reduces the amount of energy that utilities must purchase at higher prices.   Savings are $0.06-$0.11/kWh.

2. Reduces demand-response expenses
PV installations can deliver the equivalent of capacity, displacing the need to purchase this capacity elsewhere.  Savings are $0.00-0.05/kWh.

3. Saves energy losses within the distribution system
Distributed solar installations can eliminate the electrical losses that are typically incurred when energy is moved from large power plants to local loads.  Savings are $0.00-0.01/kWh.

4. Reduces need for feeder equipment upgrades
Distributed PV can deliver capacity at the feeder level, so it can reduce the wear and tear on transformers and other feeder equipment.  Savings are $0.00-0.03/kWh.

5. Hedges against fuel-price spikes
Solar energy does not depend on commodities whose prices fluctuate on short-term scales and will likely escalate substantially over the long-term.  Savings are $0.02-0.03/kWh.

6. Aids grid security
Solar power’s ability to closely mirror peak power demand can help reduce chances of blackouts. Savings are $0.03-0.06/kWh.

7. Reduces costly health and environment damages
Solar power deployment reduces greenhouse gas emissions, mining related consequences, water contamination, and other environmental and health related damages associated with fossil fuels. Savings are $0.03-0.06/kWh, which is “certainly a conservative range,” the report says.

8.  Reduces fuel-price volatility
Using an estimate of a 150% rise in fuel-based generation costs by 2036 (deemed a conservative estimate) the report found that the insurance hedge of solar generation contributes a significant long-term value.  Savings are $0.03-0.04/kWh.

9. Stimulates economy
“Job creation implies value to society in many ways, including increased tax revenues, reduced unemployment and an increase in general confidence conducive to business development,” the report states.

Article was taken from Solar Industry by Jessica Lillian, and the cited report is by Richard Perez at University of Albany, Ken Zweibel at the GW Solar Institute and Thomas E. Hoff of Clean Power Research.