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New Mexico co-op scores 'lowest reported contract' for distributed solar

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New Mexico co-op scores 'lowest reported contract' for distributed solar

At a fixed price of 4.5 cents/kWh over 25 years, Otero County Electric Cooperative Inc. in southern New Mexico scored the "lowest reported contract for distributed photovoltaic solar energy in the U.S.," according to the Rocky Mountain Institute, which helped facilitate the 3-MW Carrizozo project. SoCore Energy LLC, a subsidiary of Edison International, developed and will own the project, which recently broke ground and is expected to come online in March 2018.

"We had not seen a price like that," Mario Romero, chief executive of Otero County Electric Cooperative, or OCEC, said in an interview. "The 25-year contract was very important," he added, noting that the cooperative has rejected previous offers based on contracts with shorter terms and with prices that either escalate or were twice as high as its fixed price with SoCore. OCEC expects the deal to reduce the overall cost of purchasing power for its 14,000 members in addition to creating roughly $550,000 in property tax revenue.

The project is the first in a wave of competitively priced community solar projects expected to be built across several states in response to a series of competitive requests for proposals being conducted by the Rocky Mountain Institute, or RMI. The nonprofit, clean-energy research and consulting firm aggregates bids from developers on behalf of electric cooperatives and others. "New Mexico is our pilot," said Thomas Koch Blank, a principal at RMI. "This is just one of several community solar projects being considered."

RMI has amassed a 17-MW portfolio of projects in New Mexico at a similar price as the Carrizozo solar farm, each sized between 1 MW and 3 MW. It initially anticipated bids in the range of 7 cents/kWh, but actual prices have been more favorable, helping to fuel interest in community solar.

The state's rural electric co-ops, however, do not appear to be universally sold on community solar. The Jemez Mountains Electric Cooperative Inc., for instance, recently scrapped a deal with SoCore for power from a 7.5-MW solar project at close to 5 cents/kWh, the Rio Grande Sun reported Dec. 21, citing expenses related to new wires required to connect the array to the nearest substation as one reason for backing out. SoCore Energy did not immediately return a call requesting comment.

Expanding its model to other states, RMI is negotiating bids on a portfolio of projects in Colorado and plans to launch a request for proposals in Texas in January. "We expect up to 30 MW signed in Texas and Colorado in the next six months that will be built in 2018," Koch Blank said. It is also exploring opportunities for community solar in North Carolina and other states in the Southeast.