An offer utilities can’t refuse: The low cost of utility-scale solar
New numbers show the “beautiful friendship” between utilities and solar is growing and bringing the U.S. power system’s transition to higher renewables penetrations along.
“Utilities of all kinds and in many places are accelerating from zero to 100 on solar in response to record-low prices,” Smart Electric Power Alliance (SEPA) research manager and paper lead author Daisy Chung told Utility Dive.
Contrary to the word from Washington, D.C., utility-scale renewables are not “badly behaved coal plants” that threaten grid reliability and national security, Seb Henbest, lead author of the Bloomberg New Energy Finance New Energy Outlook, wrote July 25. “By 2050, we’re painting a picture of an electricity system utterly reshaped around cheap wind, solar and batteries.”
Wind and solar were 8.2% of U.S. generation in 2017, with wind at 6.3% and solar at 1.9%, and U.S. grids are integrating record levels of renewables without disruption. Wind was 54% of Texas generation on October 27, 2017, and wind and solar together provided 64.6% of California’s power on May 26, 2018.
Investors say “phenomenally abundant” renewables could support a trillion-dollar U.S. market by 2030 and solar will play a key part, according to an April American Council on Renewable Energy survey.
Utilities are seeing the opportunity and responding, according to the 2018 Utility Solar Market Snapshot released in July by the SEPA.
Utilities step up to the sun
Utilities have long played a central role in U.S. wind growth, which has tripled since 2007 to reach almost 89 GW of cumulative installed capacity. In the same time period, utilities added 42 GW of solar to the grid, including 7.4 GW in 2017, SEPA reports.
Solar prices have been slower to reach competitive levels than wind prices, but the SEPA report shows utilities responding to the new low prices quickly, Chung said.
Out of the 7.4 GW total, investor-owned utilities added 5,825 MW of new solar capacity in 2017 and “remain the driving force of new solar installations across the country,” SEPA reports. In the Southeast, where solar growth has historically been slowest, “several large utilities have propelled rapid solar deployment.”
Southern Company and its four subsidiaries are “bullish on solar,” VP for Energy Policy Bruce Edelston told Utility Dive. They added a cumulative 375 MW for four Southeastern states in 2017 and have a pipeline that will likely deliver around 200 MW annually for the foreseeable future, he said.
“The price has come down substantially in the past couple of years and is now competitive with coal and gas,” he said. “We would not be buying so much now if it was not the cheapest option.”
