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Group Purchase Gets Residential Solar to Grid Parity in Los Angeles

| Written by John Farrell | 3 Comments | Updated on Oct 26, 2011 The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/group-purchase-gets-residential-solar-grid-parity-los-angeles/

Back for a second round, the Open Neighborhoods organization in Los Angeles has organized another group purchase of residential and commercial solar PV, bringing the cost of solar incredibly close to the cost of grid power. With grid prices constantly rising, the lifetime savings of going solar have never looked better.

The savings from the group purchase are enormous.  With prices are around $4.40 per Watt installed for solar, Open Neighborhoods gets residential solar for $2.00 cheaper than the average prices reported by the Solar Energy Industries Association for the second quarter of 2011.  That equates to a 6 cents per kilowatt-hour savings on solar over 25 years.  Even with solar typically being cheaper in California, the group advertises savings of as much as 33% on a residential solar array.

The low group purchase price means that those who go solar will have cheaper electricity from their rooftop panels than average grid electricity by 2015.  If the solar user is on a time-of-use pricing plan, they’ll already have cheaper electricity from solar than from their utility.

The following chart illustrates the comparison between the cost of power from a rooftop solar array purchased as part of this group buy versus grid electricity at a flat rate.

The results are promising and show that economies of scale can be achieved even with residential solar, if folks work together.

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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  • http://www.conservation.org Michael P. Totten

    Hi John,
    What you say is terrific, but I can’t figure out the graph. Is the assumption that the utility price of electricity will escalate on an annual basis? And if yes, is this based on Calif PUC or CEC or the utility’s own projections? And if not, can you explain the escalation cost? thanks, michael

  • John Farrell

    That’s my default assumption, based on the 10-year historical U.S. average. Sorry for leaving that out.

  • David

    I installed a 7.5kW system on my home in early 2010 in Maryland, just outside of DC. I knew what the panel and inverter costs were and negotiated to $5.50 per watt. Of course, the usual offenders claimed they couldn’t/wouldn’t do it for less than $8.00 per watt. As with all things, an informed buyer does best.

    I got 10,288 KWh in the first year from my system (NREL estimate was 10,806 KWh). It will pay for itself over its lifetime without counting the incentives. With the incentives, I am looking at 4 years to payback.