Average Retail Price of Electricity to Ultimate Customers by End-Use Sector, by State                    

Average Electricity Prices in the United States
The price of residential electricity in the United States today is more than four cents less per kWh in real terms than it was in 1960 (Blueline, Figure 3). There have been fluctuations in prices due to the oil shocks of the 1970s and the move towards greater conservation in the1980s. Residential utility customer rates generally reflect the utility’s cost to produce or purchase power, plus associated transmission fees, ancillary services to increase reliability, and other costs incurred by the utility, plus a State-approved and regulated rate-of-return on the assets it owns. Most residential customers’ rates fluctuate on a seasonal basis, as overall demand increases and decreases, mainly in response to weather and climate conditions. Price differences by State are often related to the cost and availability of the fuels used to generate, as well as the existence of retail competition (Figure 4).

Figure 4. U.S. Electric Industry Residential Average Retail Price of Electricity by State, 2003 (Cents per kWh)

Your Electricity Consumption Primarily Determines Your Total Bill
Your total bill for the month, before taxes and other add-ons, is the price per kilowatthour multiplied by the number of kilowatthours you have consumed over the month. The typical residence has numerous electricity consuming appliances and devices. Figure 5 shows the typical share of residential electricity consumption by the major types of uses for electricity.
 

Figure 5. Percent of Total U.S. Residential Electricity

What Can Residential Customers Do to Reduce Electricity Bills?
There are several steps that you can take to reduce your electric bill. Conservation and increased efficiency are popular methods. You can reduce your usage by turning off lights and appliances when they are not being used and add additional weather insulation to doors and windows if necessary. These are among the easiest and least cost methods of reducing your electric bill. You may also want to buy more efficient lights and appliances. Some utilities offer demand management programs to encourage major electricity uses off-peak, including “time-of-use” rates, which are higher during peak demand periods and lower during off-peak times. Some utilities may allow you to average your annual bill over 12 months to lessen the shock of seasonally high bills. Check with your local utility to find out about the programs they have to help you reduce your monthly bill. In addition, consumers in some States have the option to choose the company selling them their electricity, which could result in lower prices. Residential choice programs are available or planned in as many as 24 States. If you have that option, check the websites of your State PUC and your utility for the names of retail service providers or power marketers active in your area.

Average Revenue per KWh for All Sectors of Consumers by State, 2004

U. S. Average Revenue per KWh is 7.62 cents

KWh = Kilowatt-hour

One of the big problems with solar power has been that it costs more than electricity generated by conventional means. But some experts think that, under certain circumstances, the premium for solar power can be erased, without subsidies or dramatic technical breakthroughs.

A sufficiently large solar thermal power plant (also called concentrated solar power, or CSP) could potentially generate electricity at about the same cost as electricity from a conventional gas-burning power plant, experts say.
High Impact
What's new:

Solar power, though eco-friendly, is typically more expensive than electricity supplied by gas-burning power plants. There are, however, ways to reduce, even eliminate, the cost difference, experts say.
Bottom line:

A large-scale solar power plant with a large energy-storage system that is close to other solar-power systems and the customers they serve could produce electricity for about the same cost as that from standard utility plants. Such a system has yet to be built, however.

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It's not easy. The plant would also have to come with a large energy storage system, be built next to others and be located close to users. To date, no one has completed a facility that comports to all of these parameters, said Fred Morse, an energy analyst who has studied the issue.

"Solar thermal is available at much more attractive prices than solar photovoltaic. The land mass isn't huge, but it does take a while to build these," said Stephan Dolezalek, a managing partner and co-head of the clean tech practice at venture firm Vantage Point Venture Partners, an investor in Bright Source Energy, which builds solar thermal plants and components.

Both Dolezalek and Jiang Lin, who heads up the China Energy Group at the Lawrence Berkeley National Laboratory, said that solar thermal is likely the most promising technology in the entire alternative-energy field right now.

When asked when solar thermal can hit parity, Lin responded "now."

Thermal by the numbers
Conventionally generated electricity ranges between 5 and 18 cents per kilowatt hour (the amount of money to get a kilowatt of power for an hour) but in most places it's below 10 cents, according to the Energy Information Agency. Solar thermal costs around 15 to 17 cents a kilowatt hour, according to statistics from Schott, a German company that makes solar thermal equipment.

A solar thermal plant would need a facility to store the heat harvested in the day by its sunlight-concentrating mirrors so that the heat could be used to generate electricity at night. "You need the kind of system that can run in the evening," Morse said. At some sites, such as Nevada Solar One, excess heat is stored in molten salt and released at night to run the turbine.

The plant, ideally, should be capable of generating about 300 megawatts of electricity. Those plants can churn out electricity at about 13 cents a kilowatt.

That's still a relatively high price, so utilities would need to group two, three or more 300-megawatt plants together to share operational resources, Morse said. "They could share control rooms or spare parts," he said. That would knock the price closer to 11 cents a kilowatt hour.

"Under 10 cents is sort of the magic line," he said.

Dolezalek puts it another way: the plants need to be around 500 megawatts in size. Most solar thermal plants right now aren't that big. The 22-year-old thermal plant in California's Mojave Desert is 354 megawatts. Utility company Southern California Edison is erecting a 500-megawatt plant scheduled to open in 2009.

By 2014, solar thermal plants located in the Southwest could crank out nearly 3 gigawatts of power, estimated Travis Bradford of the Prometheus Institute for Sustainable Development, a nonprofit based in Cambridge, Mass. That's enough for about 1 million homes.

Costs can then be reduced further by building the plants close to consumers. It costs about $1.5 million per mile for transmission lines, according to statistics from Acciona Solar Power, which owns solar thermal plants. Solar thermal plants work best in arid deserts that get little rainfall. Since some of the fastest-growing cities in the world are located in sun belts, that's less of a problem than it used to be.

But getting to that point isn't easy. Land-use hearings and permits can drag on for years while construction costs rise. The amount of land required can be an issue too: the 354-megawatt plant in California occupies 1,000 acres. Larger plants would need more land, while smaller plants result in higher costs per kilowatt hour.

Even if all of these factors could be completely optimized, solar thermal power plants would likely not produce electricity at a level that would compete with coal plants. Coal plants, however, will likely be hit with carbon taxes in the near future, which will make solar thermal more competitive. Still, at less than 10 cents a kilowatt, solar thermal would be competitive with electricity from gas-powered plants.
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Utilities will also likely work hard to lower the costs of solar thermal in the coming decades, Morse added. Utilities are under mandates to increase their renewable energy sources. Citizen groups often complain about wind turbines and the wind doesn't blow at a constant, predictable rate. Several companies are intent on tapping heat from under the surface of the earth to generate power. Geothermal power, however, works best only in certain locations.

"There is an enough flat, unproductive land in the U.S. to power the U.S.," Morse said. "We just don't have the wires to get there. Eisenhower built the national highway system. Some president will build the national grid."