Solar Energy: Strong as it has Ever Been
By David Hodes
Solar energy and the associated installations, solar farms and component manufacturing developments have taken their place as part of the economic engine in the country, creating jobs, rejuvenating manufacturing operations and providing cheaper, more diversified sources of energy for business to use within the framework of a leveled playing field with traditional sources of energy.
The U.S. solar energy industry now employs 100,000 Americans at more than 5,600 companies, mostly small businesses, across all 50 states.
The industry more than doubled the amount of solar installed in the United States in the second quarter of this year compared to 2011, and growth is expected to continue in the second half of 2012.
What’s more, more than 400 utility-scale solar projects larger than 1 megawatt are currently under construction in the United States, according to the Solar Energy Industries Association (SEIA). The solar industry is the strongest it has ever been, says Monique Hanis, director of communications for the SEIA in Washington, D.C. “We have huge public support,” she says. “Basically nine out of 10 Americans feel we should be using our solar and we are beginning to see the mainstream adoption of solar.”
That adoption is based on smart policy that began six years ago, Hanis says. Policy includes such activity as development of interconnection standards and the creation of the Solar Energy Investment Tax Credit — a 30 percent tax credit for commercial and residential solar systems that was created in 2005 to jump-start investment. “Right now there is enough solar capacity — 5,700 megawatts — in place in the United States to power about a million households with a goal by 2016 of and name goal,” Hanis says.
According to a report released by the SEIA, “U.S. Solar Market Insight,” the United States installed 742 megawatts of photovoltaics in the second quarter of 2012, with utility installations leading that growth by nearly doubling on a quarterly basis (including the largest quarter ever — 2nd quarter 2012 — for utility photovoltaic installations). This represents 45 percent growth over quarter one 2012 and 116 percent growth over the second quarter of 2011.
Leading states with photovoltaic installations include the usual sunny suspects for solar — California, Arizona, Texas and New Mexico. But also in the top 10 are Massachusetts, New Jersey and Illinois, illustrating just how broad the reach is for this developing industry and how widespread its economic impact.
Still, much of the industry show-stopping development news is coming from the west and southwest. Consider Texas, where the solar industry is doing more to create jobs now, says Mario Hernandez, president of the San Antonio Economic Development Foundation (SAEDF). For example, two San Antonio solar companies, OCI Solar Power and CPS Energy, recently signed a deal to develop, own and operate the largest municipal utility solar project in the country, creating 800 jobs and an estimated $700 million in economic impact each year.
CPS is the nation’s largest municipally owned natural gas and electric utility company, which has allowed them to leverage the purchase of energy into economic development projects. “So what has happened is that as we buy solar generated energy the utility is acquiring companies that will sell the power to us to also invest in the community to create jobs,” Hernandez says.
The city has a 139-acre site 14 megawatt solar farm installation being built south of the city. This Blue Wing Solar Project will create enough energy to power 1,400 homes a year.
SAEDF is also working in partnership with a California-based SunEdison’s Somerset and Centennial Solar Farms that create just over 30 megawatts of electricity. CPS now is able to offer customers a combined 44.8 megawatts of solar energy.
“We would really like to be in the future recognized as one of the leading if not the leading city in renewable energy,” Hernandez says. “There is an economic development component that can benefit the community and bring in more jobs and investments, so that is our goal.”
Hong Kong-based photovoltaic manufacturer SunGen is a key player in the solar energy mix in Addison, Texas. Principal Solar Inc. (PSI), based in Addison, develops and manages solar power companies. They are currently working to create the world’s first distributed solar utility, and took another step in that direction with the acquisition of a 3.5 megawatt project slated for Andover, Massachusetts from SunGen and R&D Solar that will interconnect with the national grid substation and expand the presence of PSI in New England. PSI has a second solar installation in Massachusetts and one in Maine.
Construction is expected to begin on the Andover project in mid-2013 and may represent a key development in solar energy’s path to a true parity with traditional forms of energy.
Michael Gorton is CEO and chairman of PSI and co-author of a white paper demonstrating how solar projects could produce power at significantly lower costs than coal, nuclear or natural gas by 2020. The paper examines how solar utility scale projects could potentially reach a price per kilowatt hour that will be at or less than traditional energy generation as soon as 2014. “The trend line in solar is that solar is going to be cheaper than natural gas in the near future,” Gorton says. “Now exactly when that is going to happen is subject to debate. But it will definitely happen within 10 years and maybe as soon as two years.”
“But most importantly, we already have one of the best backups for solar and that is natural gas power plants.” He says if he were an electric utility executive and had natural gas in his solar plant, he would ramp down natural gas when solar is generating during peak demand hours, then ramp it back up with the sun sets.
It’s that working together of energy sources that needs to be envisioned and accepted in both camps of energy production, instead of energy producers taking sides against each other. Gorton says that the people who run the energy industry understand the natural gas and oil sector extremely well. “And if the solar advocate is out there lambasting coal or natural gas or nuclear energy, they are making enemies of people that ought to be their friend.”
Greg Hribar, program manager for the Sacramento Municipal Utility District (SMUD) says that SMUD has over $90 million in signed contracts and current initiatives that include programs for 100 megawatts of solar but also other potential sustainable opportunities in geothermal and wind. They are the first California utility to meet and exceed the state mandate of 20 percent sustainable energy generated. “We are working to develop a technologically agnostic plan that balances environment stewardship with competitive rates and reliability,” he says.
SMUD is working closely with regional planning solutions and various jurisdictions about sustainable energy availability and usage. “It’s not a one size fits all model,” he says. “Different regions have different permitting requirements.”
The sustainable energy industry has had its ups and downs this past decade, most recently with new hydraulic fracturing methods of extracting natural gas from the Marcellus and Utica shale fields in the Midwest and along the east coast which has created an energy gold rush of sorts for natural gas — and a resulting belief that the country has enough fossil fuels for foreseeable energy needs.
That development came on the heels of the Solyndra debacle, where California-based solar cell maker Solyndra defaulted on its federal loan in a solar energy scandal that rocked Capitol Hill and put the solar industry on the defensive.
But those small hiccups in the development of this emerging industry have not deterred proponents from forging ahead with the development of more solar farms, and has even sparked an economic recovery in manufacturing in the hardest hit parts of the country — such as Michigan — that have reconfigured auto manufacturing plants to assemble photovoltaic panels for solar energy and wind turbines for wind energy.
Prices for photovoltaic modules continue trending down and will open up additional markets and drive demand.
Solar has emerged from the shadows of the past to take its place among the menu of other renewable energy offerings. Eight states installed projects of over 50 megawatts each in 2011. The industry has made huge inroads in just the last five years, Hanis says. “To put that in perspective, we installed more solar energy capacity in the second quarter of this year than we did all of 2009,” she says. “That just shows you that it has really been accelerating.”
Gorton says that the long-term plan for solar energy development in the country is more about gigawatts. “But you don’t build gigawatts today because it’s going to cost too much,” he says. “I think the smaller megawatts projects serve a very specific need right now.”
David Hodes is a business freelance writer for several business publications. He is based in Arlington, Va., and can be reached by e-mailing email@example.com.
For complete details about the organizations featured in this article, visit:
CPS Energy (San Antonio), www.cpsenergy.com
OCI Solar Power, www.ocisolarpower.com
Principal Solar Inc., www.principalsolar.com
Sacramento Municipal Utility District, www.smud.org
San Antonio Economic Development Foundation, www.sanantonioedf.com
Solar Energy Industry Association, www.seia.org