Duke Energy Renewables begins construction of three utility-scale solar power projects totaling 30MW in Eastern North Carolina. In addition to supplying clean electricity to power 6,000 homes, the solar projects also bring significant community development benefits to the counties.
Canadian Solar starts construction of the 100MW Grand Renewable Energy Solar Park, Canada's largest PV project. The utility-scale solar power plant is expected to be fully operational in 2015.
PV Solar Report Contributor
It shouldn’t come as a surprise that the price of solar has been dropping. A new Tracking the Sun report from the Department of Energy Lawrence Berkeley National Labs (LBNL) confirms the trend: solar keeps getting cheaper.
According to the report, median installed prices fell by an average of $0.5/W (6-7%) annually between 1998 and 2012. That rate has accelerated recently, as seen in the drop of $0.3-0.9/W (6-14%) from just 2011 to 2012. Price drops like these have facilitated a more than fourfold increase in U.S solar installations between 2009 and 2012.
PV Solar Report Contributor
Momentum, transformation, diversification: these words describe today’s dynamic solar industry. That’s according to Rhone Resch of Solar Energy Industries Association, Arno Harris of Recurrent Energy, and Shayle Kann of Greentech Media, who reviewed the state of the industry at a recent Google Hangout presented by SEIA and GTM.
Executive summary: Solar experienced strong growth in 2012. And despite the significant challenges that remain, solar is becoming mainstream.
Momentum and transformation
Drawing from the SEIA/GTM 2012 report, Resch noted that last year we installed 3,313 MW of solar in the US, a 76% growth over 2011. That represents 40% of all solar capacity in the US today, and led to the US becoming one of the most important markets in the world. American workers installed 2 panels per second, adding up to 16 billion panels -- enough to power 1.2 million households.
It goes without saying -- but I’ll say it anyway -- that as the solar industry grows, it creates jobs, many of which can’t be outsourced. Over 120,000 people are currently employed by the US solar industry, and that doesn’t count the hundreds of thousands of others who work with them.
What’s driven this growth? Resch stressed that policy stability has been a key factor. Since the ITC extension in 2009, solar has taken off -- consistent with what’s happened in other energy industries with stable policies. It’s typical for an energy resource to go through a 30-year period of early adoption and innovation before experiencing rapid growth, and that’s where solar has been. Consistent policies that support solar can help it move through the current transitional phase and continue to play an increasingly significant role.
Of course, another crucial factor in the industry’s growth has been solar’s increased affordability. Average panel costs have plummeted 60% since the beginning of 2011, with the average cost of a completed system decreasing 27% in 2012 alone. In fact, in the past few years solar has leapfrogged from being the most expensive energy form to second or third place in affordability.
Solar’s affordability is not just about panel prices but has also been aided by new financing options. Solar leases have been a huge driver for the residential market. And the industry has proven itself as an attractive asset class. New investment vehicles that could lower the costs of capital, such as Real Estate Investment Trusts and Master Limited Partnerships, are appearing on the scene. PACE programs are taking root in some states. And 2012 was a big year for crowdfunding -- as seen in organizations like Mosaic, which provide financing for smaller to medium projects by letting individuals invest in solar.
The soft costs of permitting, financing, and customer acquisition continue to be an issue, but the SunShot initiative is starting to help reduce those. We’ll see further benefits from this program in the future.
Solar has matured and diversified in the past two years -- both in terms of business models and geographically. In 2012, twelve states installed over 50 MW of solar, compared to just five states in 2011. A few years ago, California accounted for 80% of US installations; now, it represents 30%.
Diversification is also evidenced by strength in all segments of the solar market: residential, non-residential (commercial, governmental, nonprofit, schools), and utility.
The market has diversified, too, in terms of who’s installing solar. That’s no longer confined to early adopters or pilot projects. The fact that solar makes economic sense is shown by its popularity with companies like Apple, FedEx, GM, Google, Macy’s, and Walmart -- not to mention the Department of Defense.
And the widespread appeal of solar extends to the general population. In polls throughout the last five years, Americans have expressed support for greater development of solar energy -- across party lines.
Projections for the near future see the industry continuing to grow. In 2013, solar could become the number 2 source of new-build energy after gas -- and by 2015 or 2016, it could even reach number 1.
This robust growth is tempered by tensions, many in the policy area. As solar becomes a significant part of new energy generation, fossil fuel interests see it as a threat and are challenging policies like net metering and RPS. But SEIA is helping to challenge these attacks, and they have a solid foundation for doing so. Not only are voters supportive of solar, but the distributed generation that solar allows can help stabilize the grid, protecting against power outages and cyber attacks.
Advancements in storage technology will provide a crucial opportunity to address some of these policy issues. After all, with onsite storage, net metering would no longer be needed. And while grid penetration is currently low enough not to require large amounts of storage, in the long term it will become more critical.
The upshot? We need to continue pushing for strong policies that level the playing field for solar. With the right policy climate and advances in storage technology, solar power is set to transform electricity in the United States.
The $33 million deal gives LDK Solar a utility-scale commercial and industrial solar developer and installation operation in the US.
Arizona's Copper Crossing PV power plant will be completed by Fluor using the new SunPower Oasis Power Plant product on 144 acres.
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