Utility scale solar power

Conergy’s Gary Sheehan and Sarah Hetznecker on the case for photovoltaics in the utility industry.

Utility scale solar power, historically underutilized, is poised for explosive growth in the US. The case for utility scale photovoltaics (PV) is compelling. As renewable portfolio standards (RPS) are now promulgated in 30 states, many utility companies are mandated by state law to obtain a percentage of their power from sources such as solar PV.

Why utility scale?
Utilities understand many of the benefits of solar PV, including timely peak energy production, grid stress relief, capacity factor, favorable permitting and construction timeframes, and growing public understanding and desire to use solar energy. Some utilities already offer ratepayers clean energy such as wind and solar at a premium.

But PV must make sense financially. The economic benefits of utility scale solar PV are improving as installed PV costs drop, and solar modules and inverters gain in efficiency. And even at higher costs, solar energy currently benefits from incentives in many regions. As the PV industry ramps up to meet growing global demand, manufacturing and production of PV components are bringing well paying jobs and tax base to the workforce and to local regions.

Base load energy prices increase roughly four percent per year, and many markets have seen jumps of 25 to 70 percent in retail costs as the market deregulates and rate caps expire. Wholesale kilowatt hour (kwh) pricing during peak are also increasing, as energy demand and fossil fuel costs rise.

Because of its fuel source, solar PV produces the most electricity when prices are highest and energy is most needed. Solar PV plants provide a reliable and predictable base load year round. PV adds to overall capacity generation for a utility, particularly during June through August. As utility scale solar plants are commissioned, the early assessments indicate capacity factor of solar exceeds that of wind.

Solar PV technology is known as an exceptionally reliable source of electricity, having been used on US satellites since the early 1960s. Some of that era’s solar modules still produce electricity, earning PV the reputation as an ‘old’ new technology. Typically, solar output is reliably predicted using 30-plus years of insolation data from more than 200 weather stations in major cities and towns throughout the US.

Putting the deal together
State renewable portfolio standards (RPS) mandate that utilities source a percentage of their generation from renewable sources. Many states promote solar PV with a specific carve out. This creates a tradable solar credit, kind of a ‘market-based feed-in tariff’, that helps finance solar power plant construction, In addition the federal investment tax credit (ITC), set to expire this year, may be extended and broadened to bring tax advantages to utilities as well.

Solar PV plants are quickly permitted and built in comparison to conventional power plants. For example: some conventional power plants can take as long as 10 years to permit. Utility scale solar PV plants are being built at costs in the range of $6000 to $7000 per kilowatt, in time frames of one to two years, and the price is becoming more stable as the industry matures.

The capacity of a conventional plant per acre is much greater, but the fuel for a solar plant is free, and makes for a ‘clean neighbor’. Solar power plants can run with minimal maintenance. Tracker technology improves both yield and capacity factor. Solar plants can be small to medium, distributed on thousands of residential, school, business and industry rooftops in towns and cities, or very large multi-megawatt plants built at sites such as farms, landfills, or former brown fields.

Solar PV provides energy when it is needed most. Conergy has taken a leadership position on both the east and west coasts, from developing and building a 3MW power plant with Exelon Power in Pennsylvania, to building a 1.5 MW single axis tracker plant for SSJID in the Central Valley of California, to a 2 MW plant at Fort Carson, Colorado.

For more information, please contact Sarah Hetznecker and Gary Sheehan at www.conergy.us