Suddenly, the Future is Clear for Solar Energy

May 19, 2016 | 5:07 pm
Mike Jacobs
Senior Energy Analyst

In the last 24 hours, the path to greater reliance on solar energy has become much clearer. The US Department of Energy-sponsored assessments of the benefits of solar and the tools for addressing grid impacts celebrated the 65% decline in cost for solar energy over just 5 years. Meanwhile, the North American Electric Reliability Corp., (NERC) significantly revised (as in tripled) its projections of wind and solar coming on the grid over the next 15 years, and moderated its language about the reliability impacts.

Courtesy U.S. Department of Energy

Courtesy U.S. Department of Energy

The DOE’s SunShot Initiative has focused efforts on reducing the cost and increasing the deployment of solar energy, with the goal of supplying 14% of U.S. electricity demand in 2030, and 27% by 2050. Eight new studies released together describe the progress and challenges. With the continuation of cost declines, and grid and business adaptations, these reports forecast solar installations over 300,000 MW in 2030 and 700,000 MW in 2050. (You gotta say “Wow!”)

NERC, the safekeeper of reliability of the electric power grid, has tripled its projections of wind and solar in its review of the EPA’s carbon-reduction rules known as the Clean Power Plan. For the years 2016 – 2030, NERC estimates new construction of 120,000 MW of wind and solar generation, up from 35,000 MW in its previous report on the Clean Power Plan.

NERC has made considerable progress in recognizing the ability of the power system to provide reliability with high levels of renewable energy. One sign of this is where their report illustrates a key finding by saying the Southwest Power Pool (think of the southern Plains states) could be getting 46% of its energy from renewables in 2030, and that this spurs the need for additional transmission.

NERC’s changing perspective on a future with more solar and wind includes these renewables contributing to grid reliability in various ways. They also recognize that “integration of large amounts of renewables are expected regardless of the EPA Clean Power Plan.” NERC further recognizes “that the development of storage and other commercial technologies can serve to mitigate some of the [intermittency] effects.”

This NERC report is much closer to the many studies released by regional grid operators that describe the flexibility of the generating fleet, and the use of gas-fired peaking plants to smooth the supply of electricity before the rise of energy storage.

UCS’s present forecast of renewable energy is mid-way between these two, with new renewable energy capacity additions of 202,000 MW through 2030. Assumptions about technology and financing costs explain most of the differences in these three studies.

Topping off this stack of reports is a look at how affordable rental housing in California can make solar energy even more beneficial and economic by including energy storage. Present-day utility rates for commercial buildings make energy storage in California state programs an attractive investment for rental housing owners. This state-level study illustrates a point made in one of the DOE reports that solar plus storage is more effective at replacing fossil-fired power plants than either solar or storage acting alone. As we get more solar in more places and storage becomes common, the path to a renewable energy future will become a well-traveled road.