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Until now, the U.S. solar photovoltaics (PV) market has been
dominated by small to intermediate-scale systems installed on the
customer side of the meter, which serve to displace grid electricity
used by individual electricity customers with clean solar-generated
electricity.
This clearly made sense when PV costs were still relatively high because “behind-the-meter” PV electricity competes against retail utility electricity rates, or the “all-in” price of delivering electricity to consumers, which includes the costs of generation, transmission, distribution, and other utility operations and overhead. States with high retail rates, along with effective net metering and interconnection rules and targeted incentive programs, have experienced the bulk of this development. And this market segment will continue to grow and likely accelerate in the coming years. But a new wave of PV project development at “utility-scale,” or multi-megawatt (MW) project sizes, is taking shape as PV costs continue to move down the industry learning curve. U.S. electric utilities are increasingly motivated by the need to comply with state renewable energy portfolio standards and to prepare for regulation of carbon emissions.
These utilities are also realizing that PV can be deployed in smaller but significant power blocks that can be sited more easily and brought into production much more quickly than other generation options. And investor-owned utilities (IOUs) can now use the 30% Federal business energy investment tax credit (ITC) for solar, a credit that is available through 2016.
All of this points to a flood of utility-scale PV projects in the years ahead. Already, a number of IOUs are either deploying or preparing to deploy PV. This past year, the first utility-scale PV power plants (35 MW in total) were built in Florida to supply Florida Power & Light. In Nevada, NV Energy has contracted for 46 MW from two projects that will come on line in 2010. And in California, both Pacific Gas and Electric and Southern California Edison are launching programs that will each result in 500 MW of larger-scale distributed PV generation from projects owned both by the utilities and non-utility developers.
Publicly-owned utilities (POUs) are also pursuing PV projects. Tri-State Generation and Transmission Association will purchase power from a 30-MW project in New Mexico, Salt River Project from a 20-MW project in Arizona, and POUs in Texas, such as Austin Energy and CPS Energy, have committed to multi-MW PV purchases.
Finally, non-regulated generation companies, like Sempra Energy, are locating large PV projects on available lands surrounding existing power plants where siting is less restricted and transmission is already available. Sempra has utility-scale PV projects under development in both Nevada and Arizona.
And this is by no means an exhaustive list, as utility-scale PV projects are also moving forward in Colorado, Illinois, Maryland, New York, North Carolina, and Ohio. And although feed-in tariffs (FiTs) have yet to gain significant traction in the U.S., programs currently being designed in California could result in the deployment of nearly 2,000 MW of utility-scale solar over the next several years.
PV is going utility scale!
