Solar Power, Hot in 2016, Could be Broiling in 2017

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Solar energy developers are excited about the expected growth of solar electric generation this year in the U.S. Although this year looks like it will set records for construction starts, number of projects and megawatts added, project data tracked by Industrial Info suggest 2017 could be an even hotter year for solar power.

Recent research from the Solar Energy Industries Association (SEIA) (Washington, D.C.) and GTM Research (Boston, Massachusetts) predicted U.S. solar developers will install 14,500 megawatts (MW) of solar power this year, nearly double the 7,500 MW they installed last year. This research credits sharp declines in the cost of solar cells as one of several factors driving a surge in solar power. The wholesale price of a solar panel today is about $0.65 per watt, compared with $0.74 per watt a year ago and $4 per watt in 2008, according to U.S. Solar Market Insight report for the second quarter, jointly prepared by SEIA and GTM Research.

But the market could be even brighter than that. Industrial Info's North American Industrial Project Data Base shows 115 solar power projects valued at $11.68 billion are scheduled to begin construction across North America this year. Next year, North America is scheduled to see construction begin on 130 solar power projects valued at about $20.39 billion. In 2018, dirt is scheduled to be turned on 41 North American projects valued at $7.52 billion.

Click on the image at right for a year-by-year breakdown of scheduled construction starts for North American solar power projects.

By contrast, data tracked by Industrial Info showed 38 solar power projects valued at $7.21 billion were scheduled to begin construction across North America in 2015.

Across North America, Industrial Info is tracking 344 active central-station solar power projects scheduled to be built in North America, valued collectively at $54.66 billion. By country, 236 of those projects valued at $42.5 billion are scheduled to be built in the U.S. Another 70 projects valued at about $9.7 billion are slated for Mexico. Canada is scheduled to be home to 38 projects with total investment value (TIV) of approximately $2.4 billion. California, Nevada, Arizona and Texas are the North American states with the highest level of scheduled solar power project construction.

Click on the image at right to see which states in North America are planned to have the greatest amount of solar power project activity.

"While solar developers have a large book of planned projects in North America, we don't expect all of those projects to begin construction as planned," said Britt Burt, Industrial Info's vice president of research for the global Power Industry. "Historically, solar power projects have had higher rates of delay and cancellation than other generation projects. We would estimate about 33% of the solar projects we are tracking will begin construction according to their original timeline."

It's possible the five-year extension of the federal Investment Tax Credit (ITC) signed into law in late 2015 could reactivate some solar power projects that are today on hold or cancelled. According to Industrial Info's North American Industrial Project Database, developers cancelled or placed on hold a total of 114 solar projects valued at about $26.35 billion that were scheduled to start construction between January 2015 and December 2016. For more on how the extension of the ITC could bring some projects back to life, see January 15, 2016, article -- Extension of PTC and ITC Could Bring Some Renewable Energy Projects Back from the Dead.

As has long been the case, California is the state with the most active solar power development. The largest solar projects scheduled to begin construction in 2016, all of which are located in the Golden State, are:

• Calexico Solar Farm, a 200-megawatt, $800 million grassroot project scheduled to be built in the Imperial Valley. The project is being developed by 8minutenergy Renewables LLC (Folsom, California). The project, scheduled to kick off in mid-2016, is scheduled to be completed by yearend 2017.
• Naval Air Station Lemoore Solar Project, slated to be constructed in Kings County. This $500-million, 195-MW project, scheduled to begin turning dirt in the fourth quarter of 2016, is scheduled to be operating by the third quarter of 2018.
• Beacon Solar PV Energy Project, a 162-MW, $500 million project scheduled to be built in Kern County. This project, being developed by Sustainable Power Group (sPower) (San Francisco, California), is scheduled to begin construction later this summer and be operating by November 2016.
• Iris PV Solar Farm, a 130-MW, $416-million project scheduled to be built in Imperial County. Under development by a unit of 8minutenergy Renewables LLC, this project is slated to become operational in early 2017.
• California Flats Solar Project Phase 1, a $315 million, 130-megawatt (MW) project located in San Luis Obispo County. McCarthy Building Companies Incorporated (Newport Beach, California) is the engineering, procurement & construction (EPC) services firm for this project.

"Declining solar power materials costs, supportive state and federal policies and rising customer demand are driving a surge in solar power project spending," said Industrial Info's Burt. "Although our project data does not include rooftop solar projects, that segment of the industry is growing rapidly. For some utilities, particularly in California and Nevada, rooftop solar is the biggest competitive challenge to an electric utility's traditional monopoly."

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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.