Specific to Pennsylvania
In Eos' home state of Pennsylvania, commercial user power costs vary depending upon supplier, and rate structure. In PECO Energy territory, the effective cost of power for a typical commercial user with a GS plus demand charge rate structure would be about 11 to 13 cents/kWh. In PPL or PennElec territory, a more typical commercial customer rate may be 8 to 10 cents/kWh. In general, industrial customers pay less per kWh than commercial customers and commercial customers pay less than residential customers.
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< back to Is Solar Viable
Currently, PV for commercial buildings is economically viable against the cost of power from the grid only when state subsidies and federal investment tax credits are applied. As a generalized point of reference, power produced from PV costs about 28 cents per kWh (before state rebates and federal tax credits), with the following financial and technical assumptions:
- turn-key installation costs of $8/w DCp,
- capital costs are not leveraged,
- 74% efficiency factor, eroding at 0.35% annually
- Insolation rate is 4.2 sunlight hours per day average (typical for Phila. as per NREL)
- the system power production life is 25 years with inverter replaced in Year 14.
The 28 cents per kWh cost of PV compares unfavorably to the average US commercial end user cost of 9.4 cents per kWh. Power costs in the US are highly variable, however. Costs as low as 7 cents in the Midwest states are common, and average commercial costs in CA, NY, and NJ are 11.7, 15.7 and 10.3 cents/kWh, respectively. Even within any given state, effective commercial rates are highly variable.
On the other side of the equation, the cost of PV has dropped precipitously over the past 30 years. In 1976, PV cost about $4/kWh and by 1990 the cost had dropped to about $0.52/kWh, versus today's $0.28/kWh. Continued production cost improvement through economies of scale are projected, as are continued efficiency improvements in each PV panel's ability to convert sunlight to DC power. More importantly, there are certain subsides to make PV economically viable today.
The incentives that make PV viable today exist in three "buckets"; federal investment tax credit (ITC), state rebates or grants, and the tradable value of the "green power" produced via... read on>
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