Rising Solar Power Production In U.S. Likely To Make It Second-Largest New Source In 2013

Solar power is on the rise, even as the growth rate of U.S. electricity consumption has been slowing. This year, energy generated from solar power will be the second-largest source added to the U.S. electric grid.

“Solar is going to move into the No. 2 position in terms of new build, second only to gas,” Recurrent Chief Executive Officer Arno Harris said in an interview yesterday at the company’s main office in San Francisco.

Rooftop solar systems can be installed for about $4 a watt and utility-scale systems for $2 a watt, Harris said. “We can see our way to $1.50,” he said. “At those kinds of costs, we’re competitive in the Southwest with conventional electricity.”

Panel prices have fallen almost 69 percent in the past two years, benefiting companies such as Recurrent that purchase and install the equipment and sell electricity from the systems to utilities. Falling costs also have enabled developers to accept lower-priced contracts. First Solar Inc. has signed a power purchase agreement for a project in New Mexico that will sell electricity at a lower rate than new coal plants earn.

Specifically, another report projected the U.S. would install a total of 4.2 gigawatts of solar PV power in 2013. Last year, the U.S.’s share of the global solar installations grew strongly, from 7 percent to 11 percent. Globally, expected demand for solar photovoltaic installation is expected to grow by two gigawatts, or a 7 percent rise.

Solar, wind, and biomass comprised all new installed electricity capacity that came on line in January 2013. Despite what certain news organizations would have you believe, the U.S. has great potential for solar power, especially in the Southwest. And despite what you may hear about individual companies, the industry is growing globally and creating jobs in the U.S.

Where can the U.S. look to for inspiration for ways to further strengthen solar capacity in the U.S.? Rooftop solar installations in certain sectors of the Australian market have already reached the saturation point, to the extent that the peak electricity demand curves are being reshaped. For instance, midday electricity demand on the grid is down 15 percent despite higher nighttime demand.

As solar power grows, the need for adequate energy storage grows too. Fortunately, a recent report shows that global energy storage is expected to grow exponentially in the next nine years.

23 Responses to Rising Solar Power Production In U.S. Likely To Make It Second-Largest New Source In 2013

  1. fj says:

    It seems the trend is building that we can bring emissions to near zero if we really try.

  2. Mike says:

    The reason the price of solar panels is failing is because there is a glut on the market.

  3. Joe Romm says:

    Guess we’ve had a glut for most of the last 30 years.

  4. fj says:

    This rapid price reduction was predicted several years ago in a New York Times article because it’s essentially the same electronic chip technology that goes into computers.

    And, once it’s in place there are virtually no moving parts and it will last a long time.

    Of course climate change should be forcing the most rapid deployment possible.

  5. Omega Centauri says:

    Mike is partly right. Superimposed on the learning curve trend we have a very strong boom/bust cycle, which has pushed prices far below trend. This has been pushed primarily by the high growth rate, and the lag times associated with building new PV production capacity. The industry had been creating manufacturing capacity as if the precrisis exponential growth rates would continue, but the largest market was Europe which is flat. This is due to two reasons. One; Germany the largest market is struggling to accommodate the rapid rate of PV growth onto the grid, and is cutting FIT rates to slow the market. Most of the rest of Europe is starved of investment because of austerity. The up and coming new growth markets; USA, Latin America, the Persian Gulf, India, and China, are growing rapidly, but not yet large enough to take up the slack. As markets come closer to balance (which is probably still a few years off), I expect prices to converge with the longterm trendline. That probably means the rapid price drops are over and prices may not decrease much more for a while.

  6. Addicted says:

    The problem is not many politicians or investors think long term. A visionary like Elon Musk, on the other hand, does.

    He realizes that the reality is that the energy end game is solar. Humanity will reach peak energy demand due to rising efficiencies, and lowered energy expenditures (due to stuff like work from home and telecommuting).

    At that point we will have solar providing essentially all our energy needs, building panels only for replacing damaged/older panels.

    Solar is an energy end game. Any time spent on anything else right now is simply a waste of resources (heck, as we can see with older coal plants right now, it isn’t even a guarantee that coal plants will last their expected lifetimes before being voluntarily shut down, while otoh solar panels are outlasting their expected lifetimes).

  7. Addicted says:

    This is irrelevant. The panels are not a significant cost of installation anymore (and won’t be even if it reaches equilibrium prices).

    The biggest issue for solar (and renewables in general) is storage. And energy storage WILL improve. If the solar industry can’t do it, then Apple and Samsung from the cell phone industry will make sure this happens.

  8. Omega Centauri says:

    Its not irrelevant, for the manufacturers it means an extremely difficult environment, where even first tier producers like SunTech can slip and be forced into bankruptcy. On the installation end, we should be taking advantage of the cheaper than should be prices -which incidentally makes the business environment for the producers a little less dire. I think we both agree, that we should be pushing installations as hard as we can. But we should be realistic, and not expect panel prices to keep getting cheaper.

  9. Mulga Mumblebrain says:

    Yes, indeed. ‘Waiting for The Market’ (which, like Godot, may never show up, being mugged along the way by vested interests) is not the recipe for success in this predicament. Considering the lateness of the hour, government policy and direction is required. Governments, after all, are what ‘democracy’ is all about, is that not the faery story?

  10. Jimmy Cracks Capricorns says:

    The issue with Solar is it is not a consumable product meaning is has very long lifespan in market and once you make the panel and install it you are done with that customer for 30 years.

    Western economies rely on throw-away cycles for all goods…cars, phones, clothes, t.v.s, computers and pads, shoes, etc…electric motors are solid state compared to combustion engines, the rolling out of electric cars will destroy the second-hand service related industry. Electric car motors can last years without anything breaking down because there are far fewer moving parts.

    I for one look forward to installing $2 solar on my roof and buying a car with a battery that gets me 300 miles on a 10 minute charge.

  11. Omega Centauri says:

    Don’t wait for our government. Its mostly bought off. As well as trying to take the government back, we have to do what we can without it.

  12. Omega Centauri says:

    We can use capitalism’s shortsightedness against it. Solar isn’t much of a consumable, but thirty years is far beyond the systems planning ability. And the expansion of PV (and supporting grid and storage), will be very capital intensive. Plenty of money to be made during the buildout.

  13. gerald says:

    Spot on Sir!!

  14. Steve says:

    to “addicted”: the biggest market by far in terms of megawatt is grid-tied. states with feed-in-tariff will see the most solar development.

  15. Russ says:

    Have had solar on roof for 9 years at a cost of $10/watt. It has paid for itself and then some. Have had hot water solar on roof for 23 years and it has paid for itself 3 or 4 times in that time. I am out of roof!! In that period usage to power company has declined by 2/3rds. I was tired of paying for Three Mile Island. I advise everyone to get busy. Regards, Russ

  16. fj says:

    Civilization thrives on continuous acts of creation by its better angels

  17. wili says:

    Good point. Railroads were/are relatively durable and long lasting, but that didn’t prevent their rapid build out in the second half of the 19th century.

    I still think we should not only be relying on greed to get us out of problems caused by greed.

    When faced with the existential crisis of WWII, we did not sit back and say, “Oh, we don’t have to do anything–the market will take care of it.”

    Anyone claiming this would have been seen as laughably idiotic, insane, or a traitor.

    This is an even more dire and total existential crisis. Yet “Let the market take care of it” is the common chant in nearly all mainstream sources of opinion.

    Perhaps we have all gone insane?

  18. Omega Centauri says:

    “Perhaps we have all gone insane?”
    Decades of indoctrination will do that to you.

  19. Gingerbaker says:

    This is irrelevant. The panels are not a significant cost of installation anymore

    For rooftop installs that is true, but as installs get larger and larger, the cost of installation itself comes way down, surely?

  20. Gingerbaker says:

    The issue with Solar is it is not a consumable product meaning is has very long lifespan in market and once you make the panel and install it you are done with that customer for 30 years.

    That is not an issue with solar – it is a feature.

    The problem is thinking that our solar future depends on a for-profit business model that has “customers”, rather than a public commons model that has “users”.

  21. I am very happy that solar installations are on the rise. With the low cost of solar panels and the various tax incentives and rebates being offered, almost everyone in the USA should be adding solar arrays on their rooftops. Most people over-estimate the cost of adding solar PV to their homes and businesses. A recent study said that 97 percent of respondents over-estimated the cost of a solar installation. Now is a great time to consider solar energy.

  22. You make a very good point. The cost is much lower now and the payback period is shorter. If solar was a good deal at $10/watt, it is an even better deal at $4/watt. The last I checked, bank interest was less than 2%. Solar can provide returns of about 10% annually and provide a great hedge against future rate hikes by your utility.