September 1, 2017 Read More →

IEEFA Update: The Solar Incursion

Arizona, Florida, Europe, Asia, South America, the World …

The sun shines almost all day every day in Arizona, where the National Oceanic and Atmospheric administration puts “yearly averages of percent of possible sunshine range” at 90 percent, give or take.

This abundance is fueling a new Navajo Nation utility-scale solar installation that went online last week with the capacity to power 13,000 homes. The Kayenta Solar Facility is a going concern not just because the region is blessed with bounteous sunshine but, as the Associated Press noted in its coverage, “the area’s energy landscape is changing.”

A transition is under way:

“The countdown has begun for the December 2019 closure of the coal-fired Navajo Generating Station, which will leave a site that both tribal and private entities say is rife with potential for renewable energy development.”

“Perhaps most important about the solar plant’s completion is it proves to investors, developers and other tribal communities that a renewable project is possible despite hurdles like complicated land ownership structures and sometimes confusing government processes that come with working on the Navajo reservation.”

IN FLORIDA, THE TAMPA BAY TIMES TODAY COINS A POETIC PHRASE for the history of solar energy in the Sunshine State: “An ironic afterthought.”

The afterthought is catching up, though, with Duke Energy’s plans to increase its Florida solar footprint by 35-fold in four years, to 700 megawatts from 20. Florida Power & Light is shooting for a total of 2,435 solar megawatts by 2023 compared to its current 335.

From the Times article:

“The current solar boom is coming about because of the right mix of factors. A major contributor is price—over the past five years, the cost of building solar installations has dropped by nearly 65 percent, said Sean Gallagher, SEIA vice president for state affairs.. That, he said, has largely been driven by a spike in competition in the solar market and a dip in the cost of manufacturing for everything from solar panels to the literal nuts and bolts for installations.”

“And as more solar arrays are built, companies find more efficient ways to install the arrays, driving down installation costs.”

“Regulation, too, is turning into a favorable environment for new solar efforts. New regulations that went into effect Aug. 1 eliminated tax barriers for homeowners and businesses looking into solar installations, making it more accessible.”

THE TREND TOWARD GREATER UPTAKE OF SOLAR COMES AS A SHOCK TO SKEPTICS FOR THREE REASONS, Vox explains yesterday in a blog peppered with informative graphics:

Policy support: For the most part, models can’t or don’t take into account the kinds of tech-specific, country- or state-level policies that have been crucial to PV’s growth — especially feed-in tariffs (which guarantee homeowners a fixed 20-year return on PV investments) implemented early on in Germany, Spain, Italy, and China. The US used the investment tax credits and net metering. Other countries have other tools, but almost every country has some kind of support for PV. That support has dramatically accelerated its growth and innovation.”

Rapid learning: The costs for solar PV modules “have decreased by 22.5% with each doubling of installed capacity,” which is a considerably more rapid learning rate than your average tech. (It’s a “steep learning curve,” in the jargon.) Faster capacity growth than expected + faster technological learning than expected = lower prices than expected.”

Cost increases of competing clean energy sources: Models tend to be wildly optimistic on nuclear power and carbon capture and sequestration (CCS), despite the fact that, unlike PV, those technologies fall short of model projections again and again. The more decarbonization work that models assign to them, the less is left over for PV. Put more bluntly: Models stubbornly keep favoring nuclear and CCS over PV; the real world stubbornly keeps favoring PV over nuclear and CCS.”

Elsewhere in this week’s recommended-reading file: a Bloomberg New Energy Finance analysis of the market forces at work behind solar—a highly-readable summary that talks about the trend taking root in places that include Brazil, Chile, Australia, the U.K., and Germany.

From the BNEF summation:

“In much of the clean energy transition, the world is moving from technologies in which lifetime costs are split between upfront capital expenditure and ongoing fuel purchasing, to technologies in which upfront capex is dominant.”

As energy investors put money into getting solar (and wind) complexes up and running, in other words, the power to run them is there for the taking.

Karl Cates is IEEFA’s director of media relations.

 

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