The falling cost of solar panel production in the United States is giving solar innovators financial leeway to add technologies and expand into new markets, industry leaders say, enabling them to meet growing demand.
“As the U.S. solar market continues to mature and grow, it is vital for every company to find a competitive edge … and diversification is increasingly part of the business model,” Rhone Resch, president and CEO of Solar Energy Industries Association (SEIA), told reporters this week on a conference call.
For SolarReserve, adding solar photovoltaic (PV) capacity to its existing portfolio of utility-scale concentrating solar power (CSP) has allowed the firm to expand beyond the U.S. Southwest, where the bulk of its activity has been thus far.
The Santa Monica, Calif.-based developer teamed up with San Francisco’s GCL Solar Energy last fall in a 50-50 joint venture to develop, build and operate up to 400 megawatts in PV facilities across the country.
“Several years ago, SolarReserve realized that numerous types of technologies are going to be deployed in the U.S. for solar energy,” said Tom Georgis, the company’s senior vice president of development. “As a developer, we took a look at the market conditions, the price of various technologies and made a strategic decision to diversify and expand our development portfolio to include PV products.”
Resch said that a mix of strong federal programs, such as the U.S. Department of Energy’s loan guarantee program and investment tax credits plus higher technology efficiency, allowed the cost of PV solar systems to drop 20 percent last year.
Lower PV prices will help the domestic solar market double from 1,000 megawatts of new solar capacity in 2010 to 2,000 megawatts later this year, he said. That number could double again in 2012, if the DOE’s 1603 tax grant program is extended beyond its deadline this fall.
SolarReserve has more than 3,000 megawatts of CSP projects in various stages of development. Its 110-megawatt Crescent Dunes Solar Energy project on federal lands in Nevada just received a conditional offer of $737 million in loan guarantees from the DOE last week.
The 150-megawatt Rice Solar Energy Project near Blythe, Calif. — which would produce enough solar power for 68,000 homes annually — is also in the running for a loan guarantee.
SolarReserve has not disclosed the price tags of the projects, but CSP systems, also known as solar thermal, generally cost up to $1 billion to bring online.
The developer’s solar thermal technology requires the Southwest’s intense levels of solar radiation to reflect sunlight off a field of mirrors directed at a central receiver atop a tall tower.
As the receiver heats up, a fluid made from salt compounds runs through a boiler-like system that captures the heated liquid. The thermal tower can store the heated fluid during the day and run liquid through a heat engine at night to turn a generator and make electricity.
SolarReserve has no plans to slow down its CSP development, but the addition of PV solar to its profile can help the firm move beyond solar thermal’s geographic restrictions and to nab a share of the growing global solar market, Georgis said.
‘A Healthy Mix’
“SolarReserve’s philosophy and approach is that there is plenty of opportunity for both solar thermal and PV, and we think from a diversification standpoint that there needs to be a healthy mix” of both, he added.
Schott North America Inc. has echoed that sentiment at its $125 million Albuquerque solar manufacturing facility, where polycrystalline PV modules are made alongside receiver tubes for CPS systems.
“Schott has looked at the full spectrum of solar products, and being a component supplier, we thought there was opportunity … in both solar thermal and PV electricity generation,” Jim Stein, Schott’s vice president of government affairs, told reporters.
“We have hedged our bets across the spectrum.”
Of the 25,000 megawatts of U.S. utility-scale solar power in development, more than two-thirds are PV solar projects while around 8,000 megawatts are from CSP systems, according to SEIA.
Stein said that the Elmsford, N.Y.-based firm hopes to grow the New Mexico facility’s workforce from 300 employees to 1,500 as both solar markets expand in the next few years.
SEIA says that about 100,000 people are working in the U.S. solar industry today, a figure that Resch said could more than double in the next two years.
Changing Economics
Just west of Schott’s manufacturing space, Arizona Public Service (APS), the state’s largest electric utility, is mixing up the way it distributes PV solar.
“There are a number of things we can do far more economically [today] than we thought we would be able to do just a few years ago,” Pat Dinkel, APS vice president of power marketing and resource planning, said on this week’s call.
Under the utility’s ongoing $500-million AZ Sun Program, APS plans to take ownership of 100 megawatts of utility-scale PV power plants developed by a third party.
Rather than snatch up a single large-scale solar farm, however, APS will take on six projects ranging from 15 to 20 megawatts apiece across the state. The utility to date has five contracts totaling 83 megawatts for PV plants in Gila Bend, Hyder, Chino Valley and the Luke Air Force Base in Glendale.
APS is also offering 200 customers in Flagstaff the chance to join a community pilot project. Participants will host distributed PV systems on their rooftops or properties and receive a long-term fixed power rate in exchange as APS studies how a saturated PV solar space might work.
An area school will host a 0.5 megawatt concentrated PV system connected to battery storage and smart grid technologies to run as a working lab for APS.
“We’ve certainly been able to deploy solar technologies much more effectively and reach different parts of the market because prices have come down and because of the way that PV is scalable,” Dinkel said.
The utility is also contracted to receive all the output from the 250-megawatt Solana solar trough CSP plant developed by Spain’s Abengoa Solar. The project in Gila Bend is backed by a $1.45 billion loan guarantee awarded by the DOE last year.
“We are seeing diversification [of solar technologies], and it is allowing us to be much more effective in deploying different solutions for our customers,” he said.
About This Story
Perhaps you noticed: This story, like all the news we publish, is free to read. That’s because Inside Climate News is a 501c3 nonprofit organization. We do not charge a subscription fee, lock our news behind a paywall, or clutter our website with ads. We make our news on climate and the environment freely available to you and anyone who wants it.
That’s not all. We also share our news for free with scores of other media organizations around the country. Many of them can’t afford to do environmental journalism of their own. We’ve built bureaus from coast to coast to report local stories, collaborate with local newsrooms and co-publish articles so that this vital work is shared as widely as possible.
Two of us launched ICN in 2007. Six years later we earned a Pulitzer Prize for National Reporting, and now we run the oldest and largest dedicated climate newsroom in the nation. We tell the story in all its complexity. We hold polluters accountable. We expose environmental injustice. We debunk misinformation. We scrutinize solutions and inspire action.
Donations from readers like you fund every aspect of what we do. If you don’t already, will you support our ongoing work, our reporting on the biggest crisis facing our planet, and help us reach even more readers in more places?
Please take a moment to make a tax-deductible donation. Every one of them makes a difference.
Thank you,
