For the first time ever utility-scale solar projects will add more new capacity to the nation’s grid than any other industry this year, the U.S. Energy Information Administration reported Tuesday.
Natural gas and wind energy follow somewhat closely, according to the EIA’s monthly report, which notes that solar, gas and wind energy will make up 93 percent of all new energy. Solar projects will generate about 9.5 gigawatts of new energy. Natural gas, meanwhile, will add 8 gigawatts while wind is poised to create 6.8 gigawatts.
One gigawatt is enough energy to power about 700,000 average homes.
“I think it’s great, it’s evidence that the [solar] industry’s moved really into the mainstream,” said Justin Baca, vice president of markets and research at the Solar Energy Industries Association, in an interview with ThinkProgress. Seven years ago solar energy was proving that it was a real alternative to fossil fuels, he said, but now, “we’ve demonstrated that we are a real significant player in electricity markets.”
The EIA report comes less than a month after the Solar Foundation said the U.S. solar industry now employs slightly over 200,000 workers, representing a growth of 20 percent since November of 2014.
The new report further cements the scale of solar energy growth, since solar additions coming online this year are much higher than the 3.1 GW added to the grid in 2015. What’s more, this year’s growth would be more than what the industry achieved in the past three years combined.
Just last month officials in southern California unveiled one of the largest solar power plants in the world near Palm Springs. The top five states where solar capacity is being added are California, North Carolina, Nevada, Texas, and Georgia.
The overall growth of the solar industry is partly attributed to a reduction in costs, a rush to take advantage of federal tax cuts that were recently extended, and beneficial state policies like renewable energy mandates.
Another important player is technological innovations. Every year solar panels are able to turn more sunlight into energy. On Wednesday, for instance, Panasonic announced a new efficiency world record of 23.8 percent. High efficiency panels help drive greater solar deployment and are particularly beneficial for homeowners who are looking into rooftop solar, which was not accounted for in the EIA report.
Still, solar energy growth this year is a major change to the status quo. Until now, natural gas has for the past 20 years accounted for most capacity additions, according to the report. Four states plan to add more than 1 GW of gas-fired capacity this year, including Pennsylvania, Virginia, Florida, and Texas.
For its part, wind energy — an industry known for requiring large upfront investments and more likely to face community’s push-back when compared to solar — will put slightly less new energy in the grid than it did last year. The wind energy industry has, however, also reported record growth recently. Wind industry developers installed more megawatts during the fourth quarter of 2015 than in all of 2014, according to the American Wind Energy Association.
Yet challenges for renewable energy remain. The newest one is the stay the Supreme Court put on the Clean Power Plan, a rule that called for carbon emissions reductions from the electricity sector by 32 percent in the next 15 years.
“The industry had been anticipating the Clean Power Plan and we still expect the Clean Power Plan to ultimately be implemented,” said Baca, who noted the Supreme Court action has created some uncertainty among developers.
And yet the energy industry says it’s been facing uncertainties as to how best to fulfill the nation’s energy need even before the Supreme Court stay. That comes in part because much higher-emitting but still somewhat more reliable sources of energy like oil and coal are barely adding new output. In fact, according to the EIA these sources are lagging behind all others except hydroelectric power.
“The reality is that we are not building coal plants; getting approval to build nuclear remains difficult; and we cannot maintain the fuel diversity that ensures affordable and reliable electricity for customers with natural gas and renewables alone,” said Richard F. McMahon, vice president of energy supply and finance at Edison Electric Institute, in a speech to Wall Street officials last month.
“It is critical that we double down on industry-wide innovation in deployment of energy technologies such as energy storage, which will be used for reliability,” he added.
That improvement in technology is meanwhile happening slowly but surely. Just last year utilities Southern California Edison and San Diego Gas & Electric said that supply from batteries now competes against natural-gas fired plants, according to published reports.
“For the past century it has been cheaper to schedule coal, gas and hydroelectric generators than to store energy in batteries,” said Hugh Bromley, an analyst for Bloomberg New Energy Finance, to Bloomberg. “That is starting to change as technology costs are pushed down the learning curve, largely due to the experience and scale nurtured in the consumer electronics and electric vehicle industries.”