Construction has commenced on a 3 MW solar project in New Mexico that will sell its output below 4.5 cents per kilowatt-hour, a price Rocky Mountain Institute (RMI) believes is the lowest reported contract for distributed photovoltaic solar energy in the U.S.
Otero County Electric Cooperative, Inc. (OCEC) will receive output from the Carrizozo project, which will be developed and owned by Chicago-based SoCore Energy, LLC, one of the nation’s leading developers and operators of commercial and distributed solar generation and energy storage. RMI provided project analysis and supported the competitive procurement process.
The project, which has a 25-year power purchase agreement at fixed price, is expected to come online in March 2018. OCEC covered the cost of the land and the interconnection and will receive the renewable energy credits from the project as part of the power purchase agreement. The project, located in Lincoln County, does not receive state tax credits or subsidies.
“The Carrizozo solar project allows us to deliver renewable energy to our members while also saving them money,” Mario Romero, Chief Executive of Otero County Electric Cooperative, said. “Since OCEC purchases the energy produced by this project at such a great price, this project will allow all of our 14,000 members to benefit by reducing our overall cost of purchased power.”
Carrizozo is not Otero’s first solar project-Otero’s first co-op solar project was a 76 kilowatt array built in 2014, which was later expanded to 150 kilowatts. Having gained experience and comfort with distributed solar, Otero was ready to explore larger “community-scale” arrays such as the Carrizozo project.
Community-scale solar refers to solar arrays that generate between 0.5 MW and 10 MW per installation, are interconnected to distribution networks and are sited directly within the communities they serve. They sit in an economic sweet spot in the market and can deliver significant savings to electric cooperatives and municipal utilities across the country. Community-scale systems are large enough to access low costs through economies of scale and small enough to efficiently interconnect into distribution systems.
“We are honored to help bring affordable, reliable clean energy to members of the Otero County Electric Cooperative,” SoCore President Rob Scheuermann said. “This has been an exciting opportunity to work with Otero and Rocky Mountain Institute to bring highly competitive, locally produced renewable energy to businesses and communities in New Mexico.”
In addition to co-op member savings, the project is expected to provide approximately $550,000 in property tax revenue over its lifetime and will provide local jobs during site development and construction. More than 25 contractors and other professionals will be involved in construction activities at the site.
“The Carrizozo project points to the compelling customer savings, grid benefits, and clean energy resources that energy providers can deliver via community-scale solar,” Stephen Doig, a managing director at RMI who coleads the institute’s work to radically increase the adoption of distributed renewable energy, said. “We hope what OCEC has accomplished here can serve as a model to scale similar distributed solar projects across the country.”
This project is one of many solar projects that are expected to be built with rural electric cooperatives across New Mexico as more members recognize the opportunity to access affordable, reliable clean power generated within their communities.