Solar doesn’t have to compete with the cheapest electrical base load plants. No, Solar only has to compete with the most expensive forms of electricity to be adopted enough to push prices down to near grid parity. 8 cents per kwh is a low enough price to crush the price of “peaker” electricity.
Peaker energy can cost as much as 10 times as much as base load electricity. PPE charges companies $1.20 per kwh for peaker energy! It’s commonly accepted natural gas peaker electricity costs $.18 per kwh. It’s common for peaker to cost twice as much as regular base power, and 4 times as much is common too.
This peaker power is demanded on the hottest, sunniest days of the year – exactly when Solar is best at producing energy.
8 cents per kwh is easily cheap enough to be cost competitive with peaker electricity. If a company has a choice between installing Solar and installing a peaker natural gas plant, Solar can be an economic choice, even before incentives.