Dive Brief:

Orlando Utilities Commission (OUC), the city’s electricity provider, signed a 20 year power purchase agreement (PPA) at $0.07 per kWh with American Capital Energy for the output of the 13 MW Curtis Stanton Energy Center, the Orlando Sentinel reports.

The new solar power, the utility reports, costs it less than the $0.08 per kWh cost the company incurs generating electricity from coal and natural gas.

OUC is gradually increasing its holdings in solar as locations become available and the technology advances. Four years ago, it paid $0.19 per kWh for solar from a local plant. OUC’s average retail electricity rate for its 200,000-plus residential customers is $0.10 per kWh.

​Dive Insight:

This Stanton PPA with OUC is being recognized by Florida and other solar advocates as the long-predicted “tipping point” at which solar energy-generated electricity in their state finally is below the cost of fossil fuel-generated electricity.

The acreage for the Stanton project is a landfill containing OUC coal ash and land previously designated for a third OUC coal plant. The project will use 42,000 solar modules and provide enough electricity to power about 1,500 homes.

The new price point is attributable to several factors. The larger scale of the project allows economies of scale not available with rooftop solar. Modules can be up to 310 watts instead of the smaller modules in most rooftop arrays. And the module cost has fallen below $0.80 per watt from $2 per watt in 2010.

In addition, the project is expected to be online before the end of 2016 so the private sector developer will be able to monetize the 30% federal investment tax credit. There is an expectation that module prices and other costs will continue to fall while the cost of fossil fuel generation will increase with the introduction of federal emissions regulations, including the Clean Power Plan.