Warren Buffett’s Las Vegas-based utility, NV Energy, has lined up what may be the cheapest electricity in the United States – and it’s from a solar farm.
Berkshire Hathaway’s NV Energy agreed to pay 3.87 cents/kWh for power from the 100-MW Playa Solar 2 project that Tempe, Arizona-based First Solar is developing, according to a filing on July 1 with the Public Utilities Commission of Nevada.
That’s a bargain, according to a story on the Bloomberg site, which details that, in 2014, the same utility was paying 13.77 cents/kWh for renewable energy. The rapid decline is attributable not just to Buffett’s bargaining power; indeed, the price of solar panels has plummeted 70 percent since 2010 due to bargain-basement-priced materials and hot competition. What’s more, the project will be built in Nevada, which is the third sunniest state in the union (after Arizona and California).
“That’s probably the cheapest power purchase agreement I’ve ever seen in the United States,” said Kit Konolige, a utility analyst at Bloomberg Intelligence in New York.
“When compared to existing solar contracts and to other fossil-driven generation,” the rates are “very reasonable,” the utility said in the filing.
A decision on the deal is due from state regulators by year-end 2015.