The scaling adoption and newfound acceptance of PV technology by utilities has been catalyzed by four primary factors according to EER's study: regulatory pressures at the state and national levels; widespread cost reductions in the PV sector; fossil fuel price volatility and overarching carbon concerns; and PV's siting flexibility allowing utilities to leverage multi-pronged strategies. EER has forecasted that utilities will add 21.5 GW of solar PV to their generation portfolios between 2009 and 2020. Led by utility involvement, the US PV market will accelerate between 2011 and 2015, growing from 2 GW in 2011 to 12 GW in 2015, a more than 460% increase.
"At this early stage of PV adoption in the US, utilities are under significant regulatory and planning pressure to address their solar procurement strategies going forward, says EER Solar Research Director Reese Tisdale. "Unlike other larger, centralized power generation technologies such as natural gas, wind, concentrated solar power, and geothermal, PV offers scale and unique siting versatility. These key differentiators allow PV to be deployed in a wide range of geographies."
Furthermore, PV's versatility potentially circumvents transmission build-out bottlenecks that pose significant hurdles in the path of centralized renewables deployment, according to Tisdale.
Exhibit 4-2: RPS is Primary Driver for US PV Deployment
Source: Emerging Energy Research, US Utility Solar PV Markets and Strategies 2009-2020
In the immediate term, the primary driver for PV utility deployment is state-level renewable portfolio standards (RPSs). Of the top 20 states in which utilities have signed PV agreements, 18 have an RPS in place, and 13 have a distributed generation or solar carve-out.
Already facing a shortfall to meet the state's 20% renewables by 2010 target and its recently formalized 33% 2020 target, California utilities have begun adding PV to their pipelines at scale -- Pacific Gas and Electric Co., Southern California Edison, Los Angeles Department of Water and Power, and San Diego Gas & Electric account for approximately 75% of the US solar PV pipeline. Despite the lack of a distributed generation or solar carve-out target, California utilities have announced a 2.3 GW PV pipeline, or 48% of announced utility projects, according to EER.
In the wake of California activity, a wave of utilities in Florida, North Carolina, Illinois, Ohio, and New Jersey are following suit. The largest plant in the US totaling 25 MW has been commissioned in Florida in November by Florida Power & Light, with another 10 MW expected to go online in 2010.
Exhibit 4-1: US Utilities Scale PV PositionsSource: Emerging Energy Research, US Utility Solar PV Markets and Strategies: 2009-2020
According to EER's analysis, cost remains the most significant barrier to widespread utility PV penetration. While costs are rapidly declining through improved manufacturing, technology improvements and supply and demand imbalance, the cost of energy for PV in most cases remains far from competitive prices in the wholesale market, according to EER.
"Because of the high costs, utility PV adoption-particularly where other renewables such as wind, biomass, and geothermal are available makes PV less compelling for meeting general RPS mandates," says Tisdale. "However, if PV's declining economic forecasts come to fruition to foster more widespread demand-centralized, commercial, and residential-utilities will want to be at the industry's forefront to shape the market in their favor."
About the Study - US Utility Solar PV Markets and Strategies: 2009-2020Comprised of 170 pages and 149 exhibits, US Utility Solar PV Markets and Strategies: 2009-2020analyzes the role of utilities in adopting solar PV covering the overarching regulatory mandates, long-term pipelines, technology evolution, solar resources, developing cost trends, and the economic environment impacting project build-out in the US Solar PV industry through 2020. US Utility Solar PV Markets and Strategies: 2009-2020 is now available for downloading from EER's website. For the study's Table of Contents and Order Information follow this link.
About Emerging Energy Research Emerging Energy Research is the leading provider of analysis on clean and renewable energy markets. With offices in Cambridge, Massachusetts and Barcelona, Spain, EER provides strategic advice to over 1,000 stakeholders across the emerging energy industry, providing market research, support, and analysis to executives and decision-makers at utilities, developers, independent power producers, technology promoters, manufacturers, and investment companies. For more information visit www.emerging-energy.com