December 1, 2009

The Power of Light: U.S. Solar Energy Trends

Angela Neville, JD

Forecast: Partly Sunny

Overall, the experts we spoke with were optimistic about solar energy’s increasing impact in the U.S. over the coming decades. For example, Winston & Strawn’s Bloom presented the following long-term projections about solar energy’s growing importance: "Today the percentage of solar power generated in the United States is approximately 1%," he said. "While that percentage will increase in the next five years, it likely will remain a relatively insignificant portion of the power generated in the United States. However, this does not mean that we should in any way diminish our current commitment to the development of solar generation resources. But it does mean that solar should not be misperceived as the answer to energy independence and global warming. It is an absolutely crucial component of the answer, but it is not the sole component."

As the solar industry matures, the technology will be refined and improved, and the cost will come down, as occurred in wind energy industry during the past 20 years, he explained. Solar is where wind was many years ago, and the cost curve analysis over time looks very similar. This is good news for solar and those regions of the country with great potential for the deployment of solar resources.

As the country moves toward a cap-and-trade system for greenhouse gas emissions, the cost of fossil fuel generation will increase. With the tax benefits and the push for a national renewable portfolio standard, expect more utilities to seriously consider the solar option in the future.

Sandia’s Mancini predicted that "molten salt power towers most effectively integrate the collection and storage of thermal energy of any of the systems currently proposed for deployment," he said. "I believe that they may very well represent the next transitional phase of CSP deployment. Within the next five years, we may see two plants deployed. Within the next 20 years, I believe that we could see up to 1 GW of high-temperature power towers deployed in the U. S."

According to NREL’s Kutscher, there are currently contracts for about 4,500 MW of CSP in the Southwest: 1,400 MW of troughs, 1,750 MW of Stirling dish installations, 1,200 MW of power towers, and a 177-MW project of linear Fresnel. "These are slated to be built in the next few years, but with the economy being what it is, how much of this is built will depend on the extent to which financing can be raised," he said. "Also, applications to lease land from the U.S. Bureau of Land Management for solar energy projects have totaled 97,000 MW of which about 40% are troughs and 20% are power towers. These would be longer-term projects, and, again it is difficult to know how many will actually be built."

BrightSource’s Wachs commented that solar thermal energy will play an increasingly large role. Currently, there are roughly 6,000 MW of solar thermal power purchasing contacts with U.S. utilities. He emphasized that how much solar energy comes online in the U.S. depends on a number of factors, including the ability of policymakers to create a clear set of policies that encourage development and the ability of companies to permit, finance, and build these projects.

"I expect solar energy to only play an incremental role in generating electricity in the short term in the U.S.," Kailasam, the SIMULIA scientist, said. "This will most likely be in the form of a few large centralized power plants, but mostly in the form of distributed generation spurred along by state and federal government subsidies and renewable energy mandates. In the long term, as storage technologies mature, efficiencies of solar energy conversion become much higher, grid interconnectivity and efficiency increases, and costs become competitive, centralized power plants will become more common along with more widespread adoption of distributed generation. So in the longer term solar energy-based electricity will probably be a significant fraction of the overall electricity production."

The eSolar executive, Rogan, took the position that solar energy stands to play a major role in how the U.S. generates its electricity both in the near and long term. "Currently, 24 states and the District of Columbia have mandatory or voluntary renewable energy portfolio standards in place, with California mounting the most aggressive campaign to spur the development of utility-scale renewable energy projects," he said. "Utilities nationwide are realizing that we can’t rely on fossil fuels forever, especially as energy prices are increasingly volatile and energy security concerns intensify. The combination of these policy mandates, the disparity between our traditional energy sources and our growing needs, and our abundance of renewable resources (the Southwest in particular has a tremendous wealth of solar well-suited for CSP) make solar and CSP well-positioned to play a growing and permanent role in our national energy mix."

Like all other energy resources in the U.S., solar energy has its strengths and weaknesses. But as we look to the future, we must understand the true value of each resource and figure out how they all can fit together to create a reliable, cost-effective, and clean energy mix.