Which U.S. electric utilities are using the most solar? In ranking utilities by their totals of newly installed solar power, the fourth annual Utility Solar Rankings report from the Solar Electric Power Association (SEPA) reveals several striking trends.
These key takeaways recap a record-setting 2010 for the industry and provide cues for the future of the utility solar power market.
1. Utilities' solar portfolios are growing rapidly.
The report highlights the myriad ways that utilities can incorporate PV and concentrating solar power (CSP) into their portfolios – including through power purchase agreements, small distributed customer-owned systems, or projects that they develop and own themselves.
Regardless of the way the solar power is procured, the results are positive: The top 10 utilities integrated a total of 561 MW of solar last year, which represents 100% year-over-year growth.
‘Solar power is becoming recognized as an important element in the energy supply planning and customer energy management of utilities nationwide,’ the report says.
2. It's not all about California anymore.
Among the top 10 utilities, more than half – seven – were not based in California, and four were located in the Eastern region. Moreover, the non-California share of the utility solar market has grown substantially over the past two years, from 25% in 2008 to 63% in 2010.
In a separate list that ranked utilities by solar watts per customer, utilities from six different states, including three from the East, made the top 10 – another significant change from just one year ago.
3. The top spots remain the same.
Pacific Gas & Electric (PG&E), which installed 157 MW of solar in 2010, retained its position at No. 1. Although Florida Power & Light (FPL) jumped two spots to occupy the No. 2 position, the top four utilities – which also include Public Service Electric & Gas Co. and Southern California Edison (SCE) – also constituted the top four in 2009.
Similarly, SCE and PG&E continued to dominate the rankings for cumulative solar installations, at 578.3 MW and 476.5 MW, respectively. This is the third straight year that these two utilities have held the top spots.
4. PV is in; CSP is out (for now).
Aside from FPL's 75 MW Martin Solar Center, all of the projects that comprised the top 10 utilities' capacity were photovoltaic installations.
‘These PV projects, which ranged in size from 1 kW residential installations to 48 MW power plants, have much shorter planning horizons and project completion times, along with lesser siting, permitting, financing and transmission requirements at these small and medium scales,’ the report explains.
Although PV projects above 50 MW are subject to many of the same challenges as CSP projects, their ability to be built and energized in subsections results in less construction risk and balance-sheet impact.
Additionally, just three of the top 10 utilities in cumulative solar capacity have significant CSP portions in their portfolios.
5. Utilities increasingly like owning their own solar capacity.
SEPA called utility ownership of solar projects a ‘new impact’ on this year's ratings. Thirty utilities now own 18% of the market – a combined 140 MW.
The impact was felt even more strongly among the top 10 utilities, which reported owning 23% of their total annual solar capacity. Arizona Public Service, Duke Energy Carolinas and FPL own more than a third of their solar capacity.
‘The utility ownership is expected to continue its growth, with at least 1,100 MW of announced utility-owned projects in the pipeline over the next few years,’ the report adds.
6. IOUs dominate, but municipal utilities continue strong growth.
‘All but one of this year's Top 10 Solar Megawatt rankings were investor-owned utilities (IOUs), which may be a result of the larger average size of IOUs relative to municipal and cooperative utilities,’ SEPA reports. Likewise, all of the top 10 utilities in the rankings for cumulative solar megawatts were IOUs.
Municipal utilities nevertheless continued to fare well, according to the report. Annual solar capacity from all participating municipal utilities totaled 87.5 MW, which represents a year-over-year increase of more than 165%.
Texas-based CPS Energy took the top spot among municipal utilities, with 15.4 MW of solar power. Arizona's Salt River project dropped from No. 1 to No. 5, with 9.1 MW of solar.
7. Watts-per-customer tells a different – and compelling – story.
SEPA's report also features a separate set of rankings that measures utilities by their number of solar watts per customer. Here, smaller utilities – as well as municipal utilities and cooperatives – retain a better chance of competing against the large IOUs, and varying approaches are possible.
This leveled playing field is demonstrated by the top two utilities in watts per customer: Silicon Valley Power, with 39.95 W per customer, and PSE&G, with 35.19 W per customer.
‘The two utilities are very different,’ the report notes. ‘Silicon Valley is a California municipal utility with just under 52,000 customers, average electricity rates and a better-than-average solar resource, which interconnected just over 1.8 MW of PV from 74 distributed customer systems in 2010.
‘PSE&G, in contrast, is a large New Jersey IOU with more than 2.1 million customers, in a region with higher-than-average electricity rates and a lower-than-average solar resource, which interconnected 75 MW from 1,057 PV systems, of which 13% is utility owned,’ the report adds.
Photo: The 12 MW Wyandot solar farm in Wyandot County, Ohio. Credit: John Masi, via the Public Service Enterprise Group