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Ten Percent Solar by 2025 Our new report shows how we can effect a massive shift toward clean, green, renewable solar energy »

Utility Solar Assessment (USA) Study
summary

Solar power has been expanding rapidly, growing an average of 40 percent per year since the beginning of this decade. In the past five years, global solar installations have expanded more than fourfold from approximately 600 megawatts (MW) in 2003 to nearly 3000 MW (the equivalent of three conventional power plants) in 2008.

Many industry analysts and experts believe that solar offers the promise of contributing a significant percentage of America’s and the world’s energy needs. Today, solar still represents a tiny amount of U.S. energy supply —less than half of one percent of total electricity generation. What would it take to dramatically increase this number to make solar a significant portion of electricity use, transforming the way U.S. utilities think about solar in the process?

Our research indicates that the solar contribution could be quite considerable, realistically reaching 10 percent of total U.S. electricity generation by 2025 by deploying a combination of solar photovoltaics (PV) and concentrating solar power (CSP).

Historically, utilities have played a marginal role in the direct growth of solar power. This is due to a number of reasons, from a utility mindset not originally aligned with distributed resources to the very real issue of solar as an expensive and intermittent energy source. But things are beginning to change. Public resistance remains high against nuclear power and increasingly high against coal. Since 2006, some 60 new coal plants in the U.S. have been cancelled, blocked, or delayed, and dozens more are being challenged in 20 states.

Some states such as Kansas are considering moratoriums against new coal-fired generation – and this is even before nationwide mandatory carbon caps. California utilities are prohibited from buying new coal-fired power from out of state. In this new world, solar can help deliver the reliability that utilities need.

As conventional electricity sources such as coal, natural gas, and nuclear become increasingly expensive and solar technologies continue their inexorable price decline, the promise of a solar future beckons. Already, solar power can compete in regions with high electricity rates and with favorable incentives. It can compete effectively today for peak power production, in grid-constrained territories, and for applications that are off the grid.

Indeed, solar offers a number of significant benefits to utilities struggling with the complex issues of today’s energy landscape. These benefits include:

• Solar can offer a price hedge against volatile and increasing costs for fossil-fuel resources like coal and natural gas. Once installed, solar provides stable fixed prices to utilities and users.
• Solar is becoming a cost-effective peak generation resource.
• Within a decade, solar power will be cost-competitive in most regions of the U.S. on a kilowatt-hour (Kwh) basis.
• Compared to coal, nuclear, and gas-fired power plants, solar has no fuel costs, low maintenance costs, and will provide credits, rather than costs, in a carbon-regulated world.
• Solar PV is a widely available resource, suited to most locales around the nation.
• Solar PV can ease congestion in regions where energy demands have stressed the grid.
• Utilities can use solar to meet state, and potentially national, Renewable Portfolio Standard (RPS) requirements.
• Solar is a domestically available, carbon-free energy source
  

Getting to Cost Parity

Capital costs for conventional energy sources are, in many cases, not dissimilar to the capital costs for solar PV. As solar prices decline and the capital costs for coal, natural gas, and nuclear plants increase, we are reaching a crossover point. Solar also has a number of additional advantages when comparing it with a comprehensive view of the expense of conventional resources, including no “fuel” costs, low operating and maintenance costs, zero on-site emissions, and broad public approval.

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