Utilities Continue to Drive Solar Expansion

By Mark Pabst, San Francisco

Utilities continue to be a major driving force behind the expansion of solar generated electric power in the United States according to a recently released report by the Solar Electric Power Association (SEPA). In 2010 the ten utilities with the highest number of megawatts generated collectively accounted for 561 megawatts of solar electric capacity, a growth of 100% over the previous year. The total annual solar capacity of the top ten utilities has increased almost 350% since 2008. According to the SEPA report the explosive growth is due to a number of factors, but “utility-led initiatives (are) behind much of the expansion of the solar market.”

One of the most notable trends is the expansion of utility-owned solar capacity. While utilities still purchased the bulk of their solar generated electricity from facilities owned by other parties, companies are beginning to recognize the benefits of owning their own solar facilities. In 2010 utilities owned 140 megawatts of solar generated electricity, a 300% increase over 2009.

Despite the increase, the distribution of utility-owned capacity remains uneven. California-based Pacific Gas and Electric (PG&E) installed 157 megawatts of solar capacity in 2010, nearly twice as much as any other utility. However, about 104 megawatts of PG&E’s 2010 solar portfolio came from customer photovoltaic (PV) projects, with another 48 megawatts coming from the purchase of output from Nevada’s Copper Mountain PV facility. The second largest player in solar, Florida Power and Light (FPL) installed 87 megawatts, most of it from two utility-owned facilities. A relatively small number of companies account for much of the utility-owned capacity. In fact three entities, FPL, Arizona Public Service, and Duke Energy Carolinas, are responsible for more than a third of utility-owned solar capacity.

While large utilities like PG&E and FPL accounted for the vast majority of new solar capacity in 2010, smaller companies held their own when ranked based on solar-watts installed per customer. Silicon Valley Power, a California-based municipal utility with a modest 52,000 customers, ranked first nationally with almost 40 watts per customer. By contrast PG&E, with a huge customer-base spread across Northern California, generated slightly more than 30 watts per customer, ranking fifth nationally.

Overall, the SEPA report reveals a solar sector characterized both by growth and diversity. While different utilities are taking very different approaches to solar, strong growth in the sector seems to be an ongoing trend. Utility size, location, access to technology, and available tax incentives all still affect the growth of solar, but solar generating capacity seems poised to continue its upward trajectory.


Source: Utilities Continue to Drive Solar Expansion.