A Nevada utility owned by U.S. tycoon Warren Buffett has agreed upon a purchase price for solar power from a First Solar plant that might well be the cheapest electricity available anywhere in the U.S., reports Bloomberg.

NV Energy, a Nevada-based utility owned by Buffetts Berkshire Hathaway, has agreed to pay just $0.0387/kWh for solar electricity from the 100 MW Playa Solar 2 project being developed by U.S. thin film company First Solar.

The PPA undercuts a previous price agreed with NV Energy last year – $0.046/kWh from SunEdisons 100 MW Boulder Solar Project  and could quite possibly be the cheapest electricity in the U.S.

"Thats probably the cheapest PPA Ive ever seen in the U.S.," Bloomberg Intelligence utility analyst Kit Konolige said. "It helps a lot that theyre in the Southwest where theres good sun."

Having paid $0.1377/kWh for renewable energy in 2014, this new, lower price is an encouraging reflection of the rapid decline in solar costs over the past 12 months. Nevadas Public Utilities Commission, which oversaw the submission of the 20-year, fixed-rate PPA, called the price point "very reasonable" when compared to both existing solar contracts and other fossil-driven generation sources.

Bloomberg New Energy Finance (BNEF) analyst Jenny Chase remarked to Bloomberg that NV Energys power price is "one of the lowest, definitely," adding: "Thats quite aggressive bidding by First Solar".

First Solars Steven Krum said that the contracts demonstrate how utility-scale solar power plants in the U.S. are becoming cheaper to build and operate, while SunPower CEO Tom Werner wrote in an emailed statement to Bloomberg: "Power generated from solar plants is cost-competitive with power from traditional fossil fuel burning plants, and becoming more cost-competitive every day."

The agreed purchase price bests the $0.0585/kWh agreed by Dubais state-backed DEWA utility in January, and lower further the barriers for greater renewable integration.

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