Something peculiar is happening in Texas.

In 2011, Austin Energy, the electric utility for the Texas capital, began receiving electricity from Webberville Solar, a 30-megawatt photovoltaic plant, at a price of about 16.5 cents a kilowatt-hour.

Last year, Austin Energy signed a 25-year contract with Recurrent Solar under which the company would provide the city with 150 megawatts of solar-powered electricity for slightly less than 5 cents a kilowatt-hour.

Last month, Austin Energy announced the results of a competitive bid request it had put out for new solar projects. The offered bids included roughly 1,200 megawatts of solar power at a price of 4 cents a kilowatt-hour or less.


Source: Austin Energy

Needless to say, this is a striking trend. Ironically, the price declines have been so dramatic that Austin is considering holding off on entering into any new long-term contracts for a while, on the theory that prices may soon fall even further.

Not only has the price decline for solar power been steep, but as Ramez Naam notes, it’s happened more rapidly than even official energy experts like the U.S. Energy Information Administration had expected:

In an update on June 2015, the EIA projected that the cheapest solar deployed in 2020 would cost $89/mwh, after subsidies. That’s 8.9 cents/kwh to most of us … The reality is that solar prices in the market are less than half of what the EIA projected three weeks ago.

I don’t have a crystal ball that can tell me whether these trends will continue, and I’ve noticed that everyone else’s crystal balls don’t seem to be working so well. But if it does, it could be the beginning of an energy revolution, the impact of which rivals the fracking boom of the last decade. And as with fracking, it will take a lot of people by surprise.

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