DALLAS — At 5 cents per kilowatt hour, Austin's $525 million contract to buy solar power from SunEdison for 25 years is considered one of cheapest on record, the city owned utility said.
"With this solar addition, Austin Energy will be using more renewable energy than almost any other utility in the country as a percent of the energy distributed per customer," it said.
The 25-year contract is for the output of two solar farms and will cost $21 million annually for 25 years for a total estimated amount of $525 million. Long-term fixed pricing will be in the range of $45 to $55 per megawatt-hour, the utility said.
"Solar prices have dropped dramatically in recent months making this a good time to expand our solar reach," said Austin Energy general manager Larry Weis.
The two new projects will include more than 500,000 solar panels expected to come online in 2016.
With the 30-megawatt Webberville Solar Project, Austin Energy supplies about 25% of the utility scale solar energy available in the Electric Reliability Council of Texas region, officials estimate. Commercial, residential, municipal building and school solar installations make up 21 megawatts of rooftop solar capacity in Austin.
In March, Austin Energy announced a new wind energy contract that positions Austin Energy to achieve its 35% renewable energy resources goal four years ahead of schedule in 2016. Austin Energy also has issued a request for proposals to contract with a solar company to develop a local community solar project for residential customers who are unable to install solar systems at their homes.
The SunEdison contract relies on the current 30% federal Investment Tax Credit for solar energy, which is scheduled to be reduced to 10% in 2016. The reduction means solar prices could rise between 2016 and 2020, officials said.
