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Berkeley Lab: U.S. Solar Prices Keep On Dropping

U.S. solar energy system pricing is at an all-time low, with the median installed price of solar in the country having dropped by 5% to 12% in 2015, according to new reports by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory.

The “Tracking the Sun IX” report focuses on the U.S. distributed PV market, while the “Utility-Scale Solar 2015” report covers, as its name suggests, the U.S. utility-scale market.

Within the distributed solar market, installed prices in 2015 declined by $0.20/W (5%) year-over-year for residential systems, by $0.30/W (7%) for smaller non-residential systems, and by $0.30/W (9%) for larger non-residential systems. Prices for utility-scale PV systems that came online in 2015 fell by $0.30/W (12%) from the prior year. Furthermore, Berkeley Lab says preliminary data for the first six months of 2016 suggest that prices have continued to fall within most states and market segments.

“This marked the sixth consecutive year of significant price reductions for distributed PV systems in the U.S.,” noted Galen Barbose of Berkeley Lab’s Electricity Markets and Policy Group and the lead author of “Tracking the Sun.” The continued decline is especially noteworthy given the relatively stable price of PV modules since 2012. The report attributes recent system price declines, instead, to reductions in other hardware costs and to solar “soft” costs. The latter includes such things as marketing and customer acquisition, system design, installation labor, and permitting and inspections.

Both reports also highlight the tremendous variability in PV system pricing. For example, among residential systems installed in 2015, 20% sold for less than $3.30/W, while another 20% sold for more than $5.00/W. As Berkeley Lab’s Naïm Darghouth explained, “This variability reflects a host of factors: differences in system design and component selection, market and regulatory conditions, and installer characteristics, to name a few.”

Utility-scale projects completed in 2015 also vary widely in price, with the cheapest 20% priced below $1.60/W compared with the most expensive 20% priced above $2.60/W. Berkeley Lab’s Joachim Seel noted, “Some of the observed price differences between projects can be explained by varying lag times between contract negotiation and project completion, as some of these projects have been under development, or even construction, for several years.”

Within the utility-scale sector, PV project performance - as measured in terms of “capacity factor” - has improved among more recently built projects, driven by advances in both technology and project design. In particular, an increasing number of projects are deploying solar tracking technology to boost performance. In addition, developers have been augmenting the size of projects’ solar arrays relative to their inverters (resulting in higher inverter loading ratios) as another way to boost output. Finally, over the past few years, projects have, on average, been built at sites with stronger solar resources, as measured by global horizontal irradiance.

Changes in these three parameters have driven mean capacity factors higher by project vintage over the last four years - to nearly 27% among 2014-vintage projects (whose first full operating year was in 2015).

Furthermore, lower installed project costs and higher capacity factors have enabled levelized power purchase agreement (PPA) prices from utility-scale PV projects to fall dramatically over time - by $20-$30/MWh per year, on average, from 2006 through 2013, with a smaller price decline of ~$10/MWh per year evident among PPAs signed in 2014 and 2015. Berkeley Lab says most PPAs in 2015 were priced at or below $50/MWh (levelized, in real 2015 dollars), with a few priced as aggressively as ~$30/MWh.

According to the lab’s Mark Bolinger, “Falling PPA prices have enabled the utility-scale market to expand beyond the traditional strongholds of California and the Southwest into up-and-coming regions like Texas, the Southeast and even the Midwest.”

Looking ahead, the lab says that the improving economics of solar power demonstrated in these two reports, coupled with the extension of the 30% federal investment tax credit through 2019, should drive a continued expansion in all sectors of the U.S. solar market over the next few years.

 

Another U.S. City Makes 100% Renewables Commitment

At a recent event, Boulder, Colo., Mayor Suzanne Jones announced that the city would commit to being powered by 100% renewable energy by 2030. According to the Sierra Club, Boulder now represents the 17th city in the U.S. to commit to 100% renewables and is the second city in Colorado to make such a pledge, following Aspen. The organization says Jones’ announcement came after the city council directed staff in May to develop an implementation plan, which is slated to be formalized later this year.

Jones was joined by Thomas Herrod, climate and greenhouse-­gas (GHG) program administer for the City and County of Denver, who announced that Denver would also undertake plans to examine how to move to 100% clean energy.

The announcements were made at an event hosted by Sierra Club Rocky Mountain Chapter, Environment Colorado, Google Project Sunroof and Climate Reality Project, at which more than 30 groups and organizations came together to urge cities in Colorado to commit to 100% clean energy, such as wind and solar. The event was part of the Sierra Club’s Ready for 100 campaign.

“Boulder is committed to achieving 100 percent renewable electricity by 2030 as part of our strategy to achieve 80 percent greenhouse-gas emission reductions by 2050,” said Jones. “[It] is increasingly clear that Congress is not going to address climate change; cities like Boulder need to take the lead. We can act as a model for cities across Colorado to craft a sustainable future by shifting our energy model from the dirty fossil fuels of the past to clean, renewable energy.”

Herrod said, “Denver recognizes that our goal of 80 percent reduction in GHG emissions by 2050 will require big shifts in how we power our buildings, homes and transportation sector. We are committed to exploring efforts like 100 percent renewable electricity as part of our 80-by-50 process and look forward to having our partners here today help us take on this challenge, immediately initiating that work with a draft of results by mid-2017.”

The Sierra Club says that with Boulder’s announcement, 17 cities, including major ones like San Diego and Salt Lake City, have announced commitments to 100% clean energy, and five cities in the U.S. have already achieved 100% clean energy and are powered today with entirely renewable sources.

In a statement, Michael Brune, executive director of the Sierra Club, said the group “applauds the City of Boulder and Mayor Suzanne Jones for this historic commitment.”

“From sea to shining sea, our cities are once again inspiring the world by paving a path toward an economy powered by 100 percent clean energy,” stated Brune.

 

Vivint Expands Into Florida, Creating Jobs

Residential solar provider Vivint Solar has announced its expansion into Florida, with availability beginning in the Tampa Bay area. The company has hired approximately 40 employees in the state and plans to continue hiring as it extends into new regions.

Vivint Solar now operates in 13 states, including Arizona, California, Connecticut, Florida, Hawaii, Maryland, Nevada, New Jersey, New Mexico, New York, Pennsylvania, South Carolina and Utah. The company says its recent growth is indicative of the growing adoption of residential solar as a mainstream energy source for homeowners.

“We now have more than 80,000 customers nationwide who are enjoying the financial and environmental benefits of our systems, and we are thrilled to be making that available to the residents of Florida,” stated David Bywater, interim CEO of Vivint Solar. “Floridians will now be able to enjoy the clean solar power their homes are able to generate, which can save them money and reduce impact on the environment.”

 

Utility And Solar Stakeholders Unite Under Landmark Deal

In what Xcel Energy is hailing as the largest proposed deal of its kind in Colorado history, the utility and nearly two dozen parties have reached a settlement agreement on a variety of key energy issues in the state, including solar.

The Colorado Solar Energy Industries Association (COSEIA), one of several solar stakeholders involved, has lauded the agreement and says it resolves a host of challenges facing the state’s solar sector while setting the stage for progressive future energy policy.

In filings with the Colorado Public Utilities Commission (CPUC), Xcel Energy and 22 of 26 intervenors agreed, in total or in part, on a global settlement on three recent Xcel Energy filings, including the company’s Phase II Electric Rate Case, Solar*Connect, and the 2017 Renewable Energy Plan. The deal is the result of discussions between the utility and the intervenors over the past several months. (Notably, the settlement is separate from a compromise Xcel announced earlier this year with community solar developers.)

“The agreement will benefit Xcel Energy’s Colorado customers by allowing us to move forward with the ‘Our Energy Future’ initiative. It will allow us to meet our customers’ expectations by giving them more control over their energy choices. It will bring more renewable and carbon-free energy to Colorado through the use of new technologies, and it will provide affordable and reliable energy to further power the state’s economy,” said Alice Jackson, regional vice president for rates and regulatory affairs of Xcel Energy - Colorado, in a press release.

The proposed settlement will go before the CPUC for approval, and parties anticipate hearings on the settlement to take place as early as this month, with a decision by the end of the year. Although the settlement includes provisions affecting various energy resources, some major solar-related provisions include the following:

• Xcel Energy and parties have agreed to begin a transition and test out new rate designs for its residential customers. Specifically, Xcel would gradually offer energy-based time-of-use (TOU) rates to volunteer customers over the next three years. COSEIA says the strategic shift from flat rates to more sophisticated TOU ones would give customers more influence over their electric bills. These rates, now popular in some other markets, assign higher costs to energy during times when demand raises the cost of electricity. COSEIA says that because solar generates electricity during most of these hours, TOU rates more fairly account for the value of solar to all ratepayers. At the end of 2019, Xcel would present the outcome of the voluntary program, which would require meter upgrades, to the CPUC. Provided the analysis shows that the program should be expanded, all residential customers would transition to energy-based TOU billing some time in 2020.
• Xcel Energy would withdraw its grid-use charge as originally filed.
• The utility would be allowed to pursue its previously proposed Solar*Connect program but under a new name, Renewable*Connect. Renewable*Connect calls for a new, 50 MW solar resource; it would initially be available to residential and small-commercial customers.
• Xcel Energy would increase the level of participation in the Solar*Rewards midsize program to 24 MW a year and would offer the large-size program for the first time since 2012. In all, Xcel says the program expansion would result in a maximum of 342 MW of new solar between 2017 and 2019.
• In an effort to make solar more accessible to low-income customers, Xcel Energy would provide for new offerings for both solar gardens and private (on-site) solar. The company says it would work with the Colorado Energy Office to develop the rooftop solar program and would reserve a portion of its solar garden offerings for low-income customers.

“This settlement signals cooperation rather than confrontation,” said John Bringenberg, COSEIA’s board president, in a press release.

COSEIA’s national counterpart, the Solar Energy Industries Association (SEIA), was also involved in the negotiations with Xcel. Sean Gallagher, vice president of state affairs at SEIA, called the settlement “a massive undertaking” and praised Xcel for its leadership.

This settlement agreement comes as some power providers and solar stakeholders continue to battle each other across the U.S. over energy policies, especially net metering. However, utilities and local solar sectors in several states, including Massachusetts, New Hampshire, Georgia and New York, have recently collaborated to reach compromises, as well.

 

SEPA Names Top ‘Solar Power Players’ Of 2016

The Smart Electric Power Alliance (SEPA) has announced the winners of its 2016 Solar Power Player Awards. Now in their eighth year, the awards recognize electric utilities, their industry partners and individuals for creating programs embodying the innovation and collaboration that drive smart utility solar growth and expand consumer access to distributed energy technologies.

Chosen by a seven-member panel of judges with diverse experience in the utility and solar industries, the winners named in the five award categories are the following:

Investor-Owned Utility of the Year: Pepco, an Exelon company, for its development of automated tools to increase the amount of solar that can be connected to its distribution system and to streamline the interconnection process for customers and installers.

Public Power Utility of the Year: Village of Minster for an innovative, privately financed solar-plus-storage project that is providing the Ohio town and its partners with four different revenue streams.

Electric Cooperative of the Year: Green Power EMC for helping 38 electric cooperatives in Georgia implement a comprehensive solar strategy, upping these utilities’ solar capacity under development from 7.5 MW to 240 MW.

Innovative Partner of the Year: Clean Energy Collective for its deployment of a community solar development platform and toolkit that provide utilities with a turnkey option for standing up community solar programs.

Solar Champion: Dora Nakafuji of Hawaiian Electric Co. for her leadership in developing data-driven tools for the utility to maintain grid reliability as it integrates ever-higher amounts of solar, moving toward the state’s goal of 100% renewable energy by 2045.

“Our 2016 Solar Power Players all have fresh, exciting stories to tell about the potential for innovative projects and programs when utilities and their solar industry partners work together on the solutions needed to bring more solar and other distributed technologies to the grid,” said Julia Hamm, SEPA president and CEO. “Our winners provide ample evidence of the changes in institutional culture and operational style taking root across our industry, driving a transformation of our energy system that benefits all stakeholders - consumers, utilities and the solar industry.”