US solar-plus-storage prices plunge in utility contracting surge

by Stephanie Tsao and Garrett Hering, SP Global

U.S. utilities seeking new sources of peak power are turning to solar farms integrated with battery storage systems that save energy for later use, offsetting their reliance on conventional fossil fuel-fired generators, often at lower prices.

This trend is most apparent in Hawaii and the western U.S., where multiplying solar-plus-storage power purchase agreements, or PPAs, reflect a maturing class of competitively priced peak-power assets, according to an S&P Global Market Intelligence review of state regulatory filings, publicly available contracts and independent analysis.

Though project configurations and contract conditions vary, prices for large-scale solar farms coupled with big lithium-ion batteries, typically offering four hours of energy storage, have fallen to between $30/MWh and $40/MWh in several recent deals and contracts under negotiation.

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