Big solar is winning.
There are tens of millions of rooftops throughout the United States – on homes and businesses alike – where solar power could be saving electricity consumers money and reducing their carbon footprint, all the while avoiding the environmental conflicts that big solar increasingly finds itself enmeshed in. Yet projects over 1 megawatt – and often dozens and even hundreds of megawatts in size – continue to represent the lion’s share of U.S. solar growth.
The latest report from the Solar Energy Industries Association and GTM Research, released last week, highlights the trend. Photovoltaic installations grew by 1,133 MW in the second quarter of 2014, the report said, and “as has been the case for the last two years, the utility PV market drove the majority of this growth, accounting for 55 percent of capacity installed in Q2 2014.” While utility-scale solar surged, the residential market experienced “incremental growth,” up 2 percent over the first quarter of the year, while non-residential PV was up 13 percent.
SEIA/GTM Research put U.S. utility-scale solar capacity at the year’s midway point at 7,308 MW, a 309 percent increase in two years, more than twice the rate of growth of residential PV (136 percent) and more than three times the rate of growth of non-residential PV (91 percent).
A global perspective shows just how extraordinarily weighted U.S. solar is toward utility-scale projects. The U.S. Energy Information Administration tracks plants greater than 1 MW in size, and as of the end of June, said the United States had 6,242.2 MW in the category. That’s more than any other country in the world, according to the Wiki-Solar database, even though the United Sates entered 2014 trailing Germany (35.9 gigawatts), China (18.3 GW), Italy (17.6 GW) and Japan (13.6 GW) in total solar PV capacity. Even in China, where big projects have jacked up growth in recent years, “the government is aiming for at least 60 percent of this year’s installations to be rooftop capacity,” Bloomberg New Energy Finance reported earlier this year.
So can the U.S. market shift toward a more balanced solar profile – one that takes advantage of the vast opportunities available for distributed generation?
More than a few solar advocates would like to see it happen. For some, big solar is an environmental issue becoming more contentious every day, right in line with the sector’s growth. Chris Clarke, the leading reporter on the conflict between big solar and the environment, recently noted that more and more environmental groups are raising red flags when it comes to big solar.
And there are broader arguments made against big solar. A commentary in the Boulder Daily Camera this past spring, in response to a column celebrating Xcel’s planned construction of a utility-scale project in Colorado, was a classic example of the anti-big solar POV. “Every dollar sucked up by a large utility-scale project is a dollar that cannot be invested in rooftop solar, smart inverters, battery storage, small scale hydro, smart appliances, and other mass market technologies that result in long-term community-based jobs and manufacturing,” wrote R.J. Harrington from Clean Energy Action in Boulder and co-author Timothy Schoechle.
Curiously, just a year ago, there was talk that big solar was on the wane: In June 2013, Greentech Media ran a commentary headlined, “Utility Solar Is Dead; Long Live Distributed Generation.” But that report of big solar’s death was clearly premature, and just last month GTM Research offered a very different take, announcing “Utility-Scale Solar Is Back from the Dead.”
The confusion is understandable. A swirling mass of issues cloud the U.S. solar future – the impending drawdown of the federal tax credits for renewable energy, state-level fights over rooftop-friendly net metering policies, the fate of renewable policy standards and the impact of tariffs on Chinese and Taiwanese solar products among them.
John Farrell, Director of Democratic Energy for the Institute for Local Self-Reliance, is an advocate for and leading expert on distributed solar. In an email, he said utility-scale solar’s current dominance in part reflects that “a couple of very large utility-scale projects finally came online after being in the pipeline for quite a while.” But he also said that changing the solar landscape in the U.S. will require making a profound shift.
“The problem in my mind is that we’re very much focused on the transition to distributed renewable energy and how it impacts the utility business model (with some saying it’s a ‘death spiral’ and others suggesting it’s no big deal), but very few folks are focused on the fact that we should be trying to undermine the utility revenue model,” Farrell said. “[If] we can profitably generate energy from our own rooftops, is there some reason that a utility should still be getting a 10-11% return on equity (and more if they build unnecessary high voltage transmission lines) for building in infrastructure?”
