October 2, 2014
Solar Rate Parity is Happening in Massachusetts - Right Now!
I put together this chart that shows the trends for solar photovoltaic (PV) Levelized Cost of Energy (LCOE) compared to utility rates in Massachusetts over the last 15 years. The top curve shows the Levelized Costs of Energy for solar assuming 25 year expected life and based on the average output of solar panels installed in Massachusetts based on DOER data. The green curve is the PV LCOE including the value of federal and state incentives. Capital costs go from $10 a watt to $3.25 a watt.
The black curve on the bottom is Massachusetts historical electricity rates and the brown curve adds in the external health care costs from coal pollution and the effects on climate. The health care costs of coal comes from Paul Epstein's "Full cost accounting for the life cycle of coal" Harvard Medical School paper and the climate costs are about 2.3 cents / kWh based on social cost of carbon numbers released by the White House last year.
The two lines are getting closer together as Massachusetts continues to transition to cleaner electricity.
The big jump in utility electricity rates is based on National Grid's recently approved 50% rate hike starting November 1, 2014 - which the utility attributes to the region's over dependence on natural gas.