Utilities don’t buy solar energy to provide energy to their customers. It’s too expensive and too unreliable. They don’t even buy wind for their customers, even though in most cases it is very close to being cost-effective. Neither of these intermittent sources suits their needs, either in price or dependability.
But they do buy solar and wind. They are trying to reduce their carbon dioxide emissions, and to a lesser degree, diversify their sources of electricity in case of fuel price shocks.
They are required by state and Federal regulations to buy wind and solar.
It’s really a simple equation. If –
Federal and state requirements – Added cost of electricity – Intermittency and transmission penalty > 0,
then they buy solar and wind. (more…)