A BRIGHT QUARTER FOR SOLAR CALIFORNIA

In June, GTM Research and the Solar Energy Industries Association (SEIA) released their US Solar Market Insight report for the first quarter of 2015. Their report and others from a variety of state and federal sources indicate the solar industry in California continues its impressive growth. The state remains above the national average in the rate of growth in residential and commercial solar capacity, and continues to contribute well over half the national utility capacity added. The US Energy Information Agency reports that last year California became the first state to obtain more than 5% of its electricity production from utility-scale solar power. While the glass appears more than half full, we must not become complacent as there are a number of long-term issues — warning clouds on the horizon — that we must face and resolve.

First quarter residential additions reportedly totaled 231 MW; that is enough to power an additional 60,000 homes with solar energy. This added capacity is 78% larger than the capacity added during the same time last year — a year-over-year growth not even dreamed of in most industries. And for the naysayers who claim this is all subsidized, the California Solar Initiative program has pretty much run its course so that over 80% of these installations occurred without need of state support.

Commercial or non-residential on-site (commonly rooftop) systems have experienced marked growth also, though at more modest volumes. The GTM Research/SEIA study identifies 88 MW added in the first quarter—small compared to residential activity, but still a healthy 42% increase over the 62 MW added in the first quarter of 2014. As with residential systems, these too are increasingly being installed on their economic merits without state subsidies.

Taken together, these 3-month additions bring the total residential and commercial capacity to over 3000 MW of Photovoltaics. When operating in full sun, these systems generate more kilowatt hours of electricity than the 2200 MW capacity of the state’s remaining nuclear power plant at Diablo Canyon:  more than a nuclear power plant’s energy production on our rooftops with far less risk or controversy.

And speaking of power plants, utility scale PV is the third category of solar production. The 399 MW reportedly added was less than was added during the same quarter last year, but these numbers tend to be lumpy. Utility-scale additions often are tallied in chunks of various sizes, like the 550 MW Topaz and Desert Sun projects that were phased in during 2014. With 5400 MW installed at the end of 2014, and over 4500 MW planned for installation during the next few years, quarterly comparisons are less significant.

So in summary, past quarter growth has been strong and the market outlook is bright. Governor Brown announced in January (and the Assembly is considering) the goal to obtain half the state’s electricity from renewable sources by 2030. The 2016 goal of 25% has already been achieved; the 2020 goal of 33% appears achievable, maybe even sooner. These policies should serve to maintain efforts to expand renewable energy production.

Potential market expansion programs are imminent. The Green Tariff Shared Renewables program should expand the PV market to include renters and single family homeowners whose homes don’t lend themselves to on-site generation (due to structural, shading and other site-specific constraints). The state’s three large investor-owned utilities will be rolling out programs to provide renewably-sourced electricity to customers later this year. In parallel with this, cities and counties are assessing the benefits to residents of Community Choice Aggregation programs where-by they can source the electricity for resale to their residents. If priced and operated in a manner appealing to the untapped market, these programs could expand the potential number of households that source their electricity from solar sources by at least fourfold.

But there are competing perspectives to be balanced as the state moves forward, and not all focus on the same single issue of carbon reduction. The question of rate-payer equity and possible subsidization of PV owners by other utility customers needs to be addressed. This struggle to identify an equitable means of Net Energy Metering is not unique to California, but it is critical for its potential to up-end the economic attractiveness of residential and commercial scale PV systems. Its importance to the continued expansion of solar energy use in California is emphasized by Bernadette Del Chiaro’s guest commentary elsewhere on this website.

And at the federal level, the reduction (commercial) or expiration (residential) of the 30% investment tax credit has the potential to depress demand not just in California but nationwide. Falling prices of PV systems may soften this effect, but its loss could still be damaging to both the industry and our climate.

Industry reports this past quarter were widely favorable, and the solar industry in California appears to be under the influence of the Irish blessing:

May the road rise up to meet you

May the wind always be at your back,

May the sun shine warm upon your face,

and rains fall soft upon your fields.

Though we are falling short of the soft rains! We need to deal quickly and effectively with the warning clouds on the horizon — lest the resulting rain be not as soft as either the traveler or we Californian’s desire.

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