Electricity rates are going up. The cause is clear: the price of natural gas skyrocketed after Russia invaded Ukraine. The increases in residential electricity rates haven’t been uniform, however; in some U.S. states, rates are up slightly, while in others, prices have jumped sharply. The price spikes have been especially painful in Europe, where electricity rates are significantly higher in almost every country, including France and the United Kingdom.
Since the price of photovoltaic (PV) panels and battery systems continues to drop, it’s time to take a new look at an old question: Have we reached the point where a PV-plus-battery system is cheaper than grid power?
There is no simple answer to the question, “Is PV cheaper than the grid?” Residential electricity rates vary widely in the U.S. Prices in low-cost states like Utah (11.2 cents/kWh) and Idaho (11.4 cents/kWh) are less than half those in high-cost states like Hawaii (44.1 cents/kWh) and California (29.0 cents/kWh). Clearly, a PV-plus-battery system will become cost-effective in Hawaii before it does in Utah.
But here’s a clue that PV-plus-battery systems are getting cheap enough to compete with grid electricity in states with high electricity rates: a rooftop solar installation company called Sunnova Energy has submitted an application to the California Public Utilities Commission (CPUC) for permission to create a “micro-utility” powered by PV and batteries to provide electricity to residential customers.
Sunnova Energy wants to partner with a residential developer to build a community of new homes powered by PV and batteries. According to The New York Times, Sunnova Energy “said it would offer those residents electricity that was up to 20 percent cheaper than the rates charged by investor-owned utilities like Pacific Gas & Electric and Southern California Edison.” The article continued, “Sunnova says…
Get building science and energy efficiency advice, plus special offers, in your inbox.