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Austin Utility Foresees Solar Below 2¢ Per Kilowatt-Hour

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The municipal utility in Austin, Texas got a snapshot of the plummeting cost of solar late last month when bidders offered nearly 1.3 gigawatts (GW) of capacity at less than 4¢ per kilowatt-hour.

Austin Energy issued a call for bids in April with the intention of buying 600 MW of solar. Bidders came back with offers of 7,976 MW, the utility’s vice president of resource planning, Khalil Shalabi, told Greentech, including 1,295 MW below the 4¢ threshold.

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“The technology is getting better and the prices are decreasing with time,” Shalabi told Austin city council last week. “If the cost points continue along this exponentially declining curve, we expect to see prices out in the future that are possibly below $20 per MWh.”

Lacey calls the latest pricing information “a mixed blessing for developers and the utility. It shows that Austin Energy will be able to meet its 600-megawatt target with competitive PV resources. But Shalabi also said the company has ‘a little bit of buyer’s remorse’” after signing a 25-year deal last March to buy 150 MW of solar at just under 5¢/kWh.

Under a city plan enacted in 2014, the utility must procure 55% of its electricity from renewable sources by 2025.