Austin Energy is going to pay under 5 cents per kilowatt hour for electricity from 2 new solar power plants, Cleantechnica has reported. This is a couple of cents less than it estimates it could have paid for electricity from a natural gas plant (7 cents), 5 cents less than from a coal-fired power plant (10 cents), and 8 cents less than from a nuclear power plant (13 cents).
The 5 cents per KWh is even more significant because solar produces the most electricity at peak demand times, around the middle of the day in Texas. When electricity demand is up, electricity prices rise, and when demand goes down, electricity prices fall. That 5 cents per KWh for solar power in the middle of the day is a good deal indeed.
Cleantechnica points out that although there are no subsidies for solar that help with this project in Texas, there is a federal investment tax credit (ITC) at work. Without the credit, the cost of the solar electricity would actually be 8 cents per KWh, just a little more than gas, and still a lot less than coal and nuclear. If the environmental cost of gas and coal were factored in, solar would already be far less expensive than fossil fuel-based electricity.