Tucson Electric Power will buy solar energy at a historically low price from a new local system large enough to power 21,000 homes.
The new 100 MW solar array and an accompanying 30 MW energy storage system are expected to be in service by the end of 2019. Together with a planned 100 MW wind project, the new system will give TEP a renewable portfolio that produces enough clean energy each year to serve the annual electric needs of nearly one out of every three Tucson homes.
Excluding the cost of storage, TEP will buy the system’s output for 20 years for less than three cents per kilowatt hour – less than half as much as it agreed to pay under similar contracts in recent years.
“This new local system combines cost-effective energy production with cutting edge energy storage, helping us provide sustainable, reliable and affordable service to all of our customers for decades to come,” said Carmine Tilghman, Senior Director of Energy Supply and Renewable Energy for TEP.
TEP’s customers currently pay nearly four times as much for most excess energy from rooftop solar power systems. While the cost of power from large-scale solar arrays has fallen nearly 75 percent over the last five years, the rate at which TEP compensates rooftop solar customers for excess solar energy has risen to historically high levels.
An affiliate of NextEra Energy Resources will build, own and operate the system on a site owned by the city of Tucson located inside TEP’s service territory south of the metropolitan area. The system will become TEP’s largest dedicated renewable energy resource, supplanting the 80 MW Red Horse wind and solar system near Wilcox at the top of the company’s green power portfolio.
NextEra Energy Resources also will build and operate a long duration battery storage system on the site that will help integrate renewable energy resources into TEP’s local energy grid. The storage system will be capable of providing up to 120 megawatt-hours of power.
TEP is working to deliver at least 30 percent of its power from renewable resources by 2030, doubling the state’s 2025 goal. TEP will invest in both solar and wind systems to mitigate intermittency and variability – operational challenges associated with the expansion of renewable resources. In addition to these most recent solar and storage projects, TEP and a NextEra Energy Resources affiliate recently signed a power purchase agreement to build a new 100-MW wind facility that is expected to begin producing power for TEP customers by the end of 2019.
TEP also expects to make greater use of energy storage. TEP added three battery storage systems to its local energy grid this year, including a 10-MW NextEra facility located near Interstate 10 and West Grant Road that is owned and operated by an affiliate of NextEra Energy Resources. These batteries can boost power output levels more quickly than conventional generating resources to maintain the required balance between energy demand and supply on our grid.