SEIA: U.S. Solar Power Could Double by Yearend 2016

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The U.S. Solar Power Industry has grown dramatically over the prior decade, and a leading solar trade group predicts U.S. solar generating capacity will double to 40,000 megawatts (MW) by the end of 2016.

Industrial Info is tracking 140 active U.S. utility-scale solar projects valued at $29 billion that are scheduled to begin construction between January 2015 and December 2016. The states with the largest dollar value of utility-scale projects over this two-year period include California, Nevada, Arizona, New Mexico and North Carolina. For more on U.S. solar development, see April 9, 2015, article - U.S. Solar: Record Year in 2014, Brighter Prospects in 2015 and 2016.

Click on the image at right to view the value, by state, of utility-scale solar projects scheduled to kick off between January 2015 and December 2016.

U.S. solar power (photovoltaic and concentrating solar thermal) increased from 500 MW in 2004 to 20,000 at yearend 2014, according to "Solar Energy in the United States: A Decade of Record Growth," prepared by the Solar Energy Industries Association (SEIA) (Washington, D.C.). Over that decade, the cumulative investment in domestic solar installations soared from $2.6 billion to $71.1 billion, the trade group said.

SEIA reported that 7,000 MW of new solar power was brought online last year, and it predicted U.S. solar generating capacity will double to 40,000 MW at yearend 2016, from 20,000 at yearend 2014.

Reflecting on this growth, Rhone Resch, SEIA's president and chief executive, said: "Without question, effective, forward-looking public policies, like the solar investment tax credits (ITCs), Net Energy Metering (NEM) and Renewable Portfolio Standards (RPS), are helping to drive solar energy's remarkable growth."

The federal ITC offers solar owners a tax credit equal to 30% of the cost of the installation for units operating by yearend 2016. The tax credit is available for utility-scale owners, as well as residential and commercial owners of solar assets that have a federal tax liability. After 2016, the ITC falls to 10%.

Net Energy Metering is the process, regulated at the state level, where owners of a solar installation are able to sell excess power back to the local utility for a predetermined price. Although nearly 30 states have enacted an RPS mandate for renewable electricity, utilities in many of those states report they are nearing, or have attained, their requisite level of renewable generation. And while California recently decided to increase its RPS to 50% by 2030, several other states have taken steps to freeze or roll back their renewable mandates. For more on the California RPS, see January 27, 2015, article - California Governor: 50% of Electricity from Renewables by 2030.

The SEIA report, released May 19, details the industry's significant accomplishments:

• From 2004 to 2014, the amount of installed utility-scale solar capacity in the U.S. increased more than 30 times over, from 365 MW to 11,440 MW.
• From 2004 to 2014, the number of utility-scale solar projects in the U.S.--both PV and concentrated solar power (CSP)--increased more than 10-fold, growing from 100 projects to nearly 1,100 projects, spread across 30 states.
• In 2004, approximately 15,500 homes had solar photovoltaic (PV) installations across the U.S. Through the end of 2014, that number had grown to 600,000.
• Over the 10-year period studied, the average price of an installed residential PV system dropped more than 60%, and utility-scale prices plummeted more than 73%.
• In 2014, for the first time in history, each of the three major U.S. market segments--utility-scale, commercial and residential--all installed more than 1 gigawatt (GW) of solar PV.

SEIA's Resch noted there were less than 20,000 people working in the U.S. Solar Power Industry in 2004, but that number jumped to 174,000 at the end of 2014, and more jobs were being added each day.

"We expect 2015 will be a robust year for solar power construction, but not all of it will take place at the utility-scale level," said Brock Ramey, Industrial Info's North American power specialist. "At the utility-scale level, we expect a fair amount of these larger proposed projects to be pushed back or cancelled. The cost to build those types of generation, the ability to finance it and securing a PPA with a utility remain significant challenges to developers."

"We don't see a federal RPS on the horizon, but the Obama administration's Clean Power Plan is placing a dollar value on carbon dioxide (CO2) emissions," Ramey said. "That could give a dramatic boost to renewables--providing the plan survives court challenges. Aside from future project activity in utility-scale solar, we see no dimming of interest in solar by residential and commercial customers, who also are eligible for the 30% ITC on systems installed by December 31, 2016."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.