There’s a large and growing amount of information out there for consumers and businesses interested in going solar, but what about the U.S. utility customer looking at taking the solar plunge? Although hundreds of utilities now have solar power plants as part of their generation mix, hundreds more have yet to add solar to their grid networks. For utility managers thinking about going solar, here are five things you should know.
Utility solar is no longer expensive or unproven.
While most utilities perceived “going solar” as expensive and risky a decade ago, that is no longer the case. Hundreds of investor-owned, municipal/public and rural electric co-op utilities have had solar power plants installed in recent years. Iconic investors like Warren Buffett believe in the value of solar and have poured billions of dollars into new solar projects. In 2016, more than 10 GW of new utility solar capacity was added in the U.S., a sizeable chunk of which was implemented by utilities in states like Utah, Minnesota and Georgia, according to the most recent “U.S. Solar Market Insight” report. On the cost side, the same report shows the modeled average U.S. utility solar system cost has dropped to around a dollar per watt for a turnkey installed system. That’s right: a buck a watt. In some areas, solar is already cost competitive with new-build natural gas alternatives.
Utility solar ownership comes in several flavors.
While some utilities like DTE and Duke Energy have chosen to own their large solar assets themselves, many more utilities buy the power generated from the solar farms from an independent power producer (IPP) or other asset owner under the terms of a long-term power purchase agreement (PPA) or third-party leasing deal. With a solar PPA or lease (or lease to own) arrangement, the upfront costs for the utility are minimal, since the development and construction of the solar project is borne by the developer/owner.
Helpful hint: Build your solar plant close to an existing substation.
When you start your solar site selection process, keep in mind that you have the opportunity to place a flexible, scalable power generation plant on those “needier” parts of your network. To make interconnection easier once the solar system is built, choose a site that is close to an existing substation to avoid additional infrastructure costs and reduce transmission losses. For examples and best practices of utilities that have followed this game plan for solar, the Smart Electric Power Association (SEPA) and National Rural Electric Cooperative Association (NRECA) are good sources of information.
Coming soon to a power station near you—energy storage.
Solar has come into its own as an increasingly important part of the energy generation mix in parts of the U.S, but its clean energy cousin—storage—is just starting to make an impact. Solar and battery storage pair nicely, and provide a bridging solution for intermittency, grid resiliency and demand response issues. If you’re thinking of pulling the trigger on solar, you might want to consider looking at front-of-the-meter storage options in parallel.
Reach out to your utility colleagues and solar experts.
You’re not alone in the solar wilderness, far from it—there is a large and growing community of utility professionals with solar expertise as well as many qualified solar development and EPC (engineering, procurement and construction) firms like Inovateus Solar that would be happy to share their experiences and knowledge as you prepare your solar RFP. In addition to SEPA and NRECA, the Solar Energy Industries Association (SEIA) has a trove of informational resources, while trade publications like Greentech Media, PV Magazine, Solar Power World, Solar Industry, and Utility Dive offer the latest news and analysis.
Utility solar has been and will continue to be the growth engine of the U.S. solar boom, and we would encourage you to reach out to Inovateus with any questions you may have. In upcoming blogs, we will be exploring frequently asked questions about utility solar financing, operations and other topics for utility managers taking the next step in the ongoing clean energy transition.
By Nathan Vogel, director of strategy, Inovateus Solar
