Solar Resource Geography

Identical solar panels in Phoenix produce about twice the electricity of the same panels in Seattle. The panels are the same. The sun is the same. The difference is geography: how many hours of strong, direct sunlight reach each location.

The solar resource at any site is measured in peak sun hours (PSH) per day, equivalent to kWh/m²/day of solar irradiance. Phoenix averages about 6.5 PSH/day; Seattle averages about 3.5 PSH/day. Three factors determine PSH: latitude (lower latitudes receive more direct sunlight year-round), cloud cover (Seattle's marine climate blocks more sunlight than Phoenix's desert), and season (high-latitude sites have extreme seasonal variation, from long summer days to short winter ones).

These geographic differences directly affect project economics. A solar farm in the U.S. Southwest may achieve a 28-30% capacity factor, while the same farm in the Pacific Northwest achieves 15-18%. The same capital investment produces nearly twice as much energy in one location versus the other.

Worked Example

A 10 MW solar farm in two locations:

• Phoenix (6.5 PSH/day). Daily energy: 10 MW x 6.5 h = 65 MWh/day. Annual: 65 x 365 = 23,725 MWh.
• Seattle (3.5 PSH/day). Daily energy: 10 MW x 3.5 h = 35 MWh/day. Annual: 35 x 365 = 12,775 MWh.

If both farms cost $15 million to build, how does the cost per MWh compare?

Phoenix: $15M / 23,725 MWh = $632/MWh over a single year (amortized over 25 years: $25/MWh). Seattle: $15M / 12,775 MWh = $1,174/MWh over a single year ($47/MWh). Same technology, nearly double the cost per unit of energy in Seattle.

Solar resource geography is why location is the first variable in any solar project's financial model.

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