Electric Utilities Rise to Meet Solar
Call-to-Action
WASHINGTON, May 28, 2009 -- BUSINESS WIRE
As financial markets deteriorated in October 2008, Solar Electric Power
Association Executive Director Julia Hamm challenged the solar and utility
industries to deploy solar power on a massive scale despite new economic
barriers. She issued the challenge in a speech at Solar Power International,
the nation's largest solar conference and trade show. Today, the Solar
Electric Power Association (SEPA) issued a report demonstrating that the
industry has responded even amidst a tough economic climate.
SEPA's "2008 Top Ten Utility Solar Integration Rankings" report identifies
the utilities in the U.S. that have the most significant amounts of solar
electricity integrated into their portfolio, and records the increased
collaboration of the U.S. electric utility and solar energy industries. The
report demonstrates that the utility segment is making a major investment to
increase the amount of solar energy in power portfolios, with many utilities
doubling the amount of solar power in their portfolio in just one year. The
overall installed solar capacity of the top ten ranked utilities rose from
711 megawatts to 882 megawatts, reflecting 25 percent growth. Ninety-two
utilities participated in this year's survey, an increase of more than 80
percent over last year, showing that the utility industry's interest in
solar power is stronger than ever.
"This year's report demonstrates that solar electricity is finally on the
radar screen of utilities across the country," said Julia Hamm, executive
director of the Solar Electric Power Association. "Solar plants large and
small are ready for significant build-out, and the utility industry is
moving quickly toward mass adoption to meet a variety of business needs."
Renewable portfolio standards, impending carbon policy, and fluctuating
costs of power generation and fuel resources top the list of drivers towards
improved utility perception of solar electric options.
The report also documents a wave of utility-driven installations, pointing
to the growing importance of utilities in the solar power market, and the
growing importance of solar power to the business of utilities.
Historically, the solar power market has been dominated by customer-driven
installations.
"Residential and commercial photovoltaic projects will continue to be
important stimulants for job creation and small business growth, but they
will be complemented by large-scale photovoltaic and concentrating solar
power projects," said Mike Taylor, director of research and education at
SEPA. "The variety of ways solar power is being implemented signals an
increased maturity in the market."
The Challenge
At Solar Power International in October 2008, Julia Hamm challenged electric
utilities and solar power providers to meet aggressive growth forecasts for
the industry. Prior to the economic downturn, analysts had predicted a
thirty-fold increase in solar capacity between 2009 and 2016, which would
create 440,000 permanent jobs, and over $230 billion in investments and
associated economic development benefits.
More specifically, the challenge called for a wider range of utilities to
participate in solar adoption. "We must move beyond having 97 percent of all
grid-connected solar installations in just 10 utilities' service
territories," said Hamm at the time. This year's "Top Ten Utility Solar
Integration Rankings" report shows that 88% of new annual growth was in the
Top Ten service territories. The distribution of solar power is also
spreading geographically. Twelve utilities in eight different states topped
the annual and cumulative solar megawatts categories.
To foster an economically-driven solar business that benefits utilities,
solar companies and electricity consumers, SEPA also called for increased
collaboration on new business models and "bold new ideas developed in tandem
for the mutual benefit of both industries, and society at large." The 2008
Top Ten Utility Solar Integration Rankings report documents that utilities
have continued to develop renewable energy in innovative ways. For example,
Arizona Public Service, Duke Energy, Pacific Gas and Electric, Public
Service Electric & Gas, San Diego Gas and Electric, and Southern California
Edison have all recently announced individual but similar PV programs that
will provide more than the equivalent of an entire year's worth of past
solar installations in the U.S. These specific programs provide for the
utility to own the panels at utility and customer sites in a "distributed
power plant" design. Through SEPA's Utility Solar Business Model initiative,
electric utilities are collaborating around innovative business models to
encourage solar power deployment.
"We are working with many creative companies to find utility business models
that provide solid financial returns, increased renewable energy adoption,
and customer benefits," said Mike Taylor, SEPA's lead on the Utility Solar
Business Models initiative.
Report Reveals Major Trends
This year's report shows that 2008 solar power growth came almost entirely
from thousands of distributed generation projects, which grow more steadily
and consistently than centralized plants. However, SEPA anticipates that in
future years centralized solar electric plants will play an equal or larger
role.
"Traditional fossil-fuel power plants come in two sizes, large and larger,"
said report author Mike Taylor. "The solar market is more vigorous, complex
and democratic because of the combination of distributed generation and
large-scale projects." Large-scale centralized solar plants will allow
utilities to jump up in the rankings quickly, but are currently at an
earlier stage of development with most large-scale projects in the contract
or construction phase. The solar industry is developing a robust foundation
for the future by using a diversified approach of distributed and
centralized projects owned by a variety of market players.
The report also serves as a valuable tool to indicate the future direction
of solar power markets. Solar power is entering a similar growth phase as
wind power did a few years ago, with a dramatic increase in capacity
expected. Large-scale solar projects could face some of the same challenges
wind projects faced, but will also benefit from the experience and impact of
the wind industry on grid integration. The last six months have seen a
significant increase in the national conversation about increasing
electricity transmission resources as well as changes to the grid that will
allow it to manage integration of intermittent wind and solar power.
Key Findings and Methodology
This year's report is based on the 2008 Utility Solar Electricity Survey
completed by utilities in April 2009. The report catalogs how much solar
electricity was interconnected by surveyed utilities in calendar year 2008
and what was installed cumulatively up through the end of 2008, including
both photovoltaics and concentrating solar power. It includes all solar
electricity generation integrated into the utility's portfolio regardless of
whether it was owned by the utility, their customer, or a third-party
company, and regardless of whether it was installed on the utility or
customer side of the meter. The participating utilities are generally
self-selecting for having more active solar programs and projects, so
results are not necessarily representative of a typical utility in the
United States.
The "2008 Top Ten Utility Solar Integration Rankings" report shows an
average increase of 2 megawatts per participating utility over the twelve
months of 2008. Two megawatts is enough to offset the use of over 300 homes
on an annual basis. In the total solar-watts-per-customer category,
utilities added an average of 33 watts per customer, or the equivalent of
one residential-sized system for every 90 customers. However, the median
utility added about one watt per customer, showing that watt-per-customer
growth is still concentrated in certain utility markets.
Pacific Gas and Electric Company, based in San Francisco, California, was
the most solar integrated utility for the year 2008, interconnecting 85 MW
of new capacity. This number represented over 44 percent of the survey
total. Ranked second and third were Southern California Edison and San Diego
Gas & Electric, rounding out a sweep of the top three spots by California
investor owned utilities. For the solar watts-per-customer category in 2008,
the San Francisco Public Utilities Commission (SFPUC), a water utility that
provides electrical generation to its municipal buildings, ranked first with
almost 2700 watts per customer for its 340 customer sites. SFPUC has
invested in many PV projects with the assistance of state incentive programs
to achieve this coverage for its city buildings. Second and third were Kauai
Island Utility Cooperative in Hawaii and Palo Alto Utilities in Northern
California. On a cumulative solar megawatt basis, Southern California Edison
was ranked first, followed by Pacific Gas & Electric and NV Energy, a Nevada
utility. Cumulatively in watts per customer, SFPUC ranked first again,
followed by the Port of Oakland, and Southern California Edison. Both the
SFPUC and the Port of Oakland are not electrical utilities in the
traditional sense, serving residential and commercial customers, but
entities that procure electricity for their municipal and port accounts.
For the first time this year, the report provided separate rankings for what
was installed in calendar year 2008 and what was installed cumulatively up
through the end of 2008. Participating utilities had an average of 11
megawatts in their cumulative portfolio, and the Top Ten utilities
represented 93 percent of all solar capacity. Because of their head-start,
the large investor-owned utilities in California are likely to retain a lead
in the overall cumulative rankings even as the year-to-year rankings shift.
Overall Rankings - Fast-Facts
New Projects in 2008
Total Solar Megawatts
-- Participating utilities saw an average increase of 2 megawatts and a
median of 0.1 megawatts of solar added to their portfolio in 2008.
-- The Top Ten utilities represented 88% of the survey megawatt total.
-- Utilities in seven different states placed in the Top Ten.
Total Solar Watts per Customer
-- Participating utilities saw an average increase of 33 watts per customer
and a median of 1 watt per customer of solar added to their portfolio in
2008.
-- Nine of the Top Ten utilities are from California and Hawaii.
Cumulative
Total Solar Megawatts
-- Participating utilities had an average of 11 megawatts and a median of
0.2 megawatts of solar in their cumulative portfolio.
-- The Top Ten utilities represented 93% of the survey megawatt total.
-- Utilities in six different states placed in the Top Ten.
Total Solar Watts per Customer
-- Participating utilities had an average of 97 watts per customer and a
median of 2 watts per customer of solar in their cumulative portfolio.
-- Nine of the Top Ten utilities are from California and Hawaii.
About the Solar Electric Power Association: SEPA is comprised of over 550
utilities and solar industry members. From national events to one-on-one
counseling, SEPA is the go-to resource for unbiased and actionable solar
intelligence. Breaking down information overload into business reality, SEPA
takes the time and risk out of implementing solar business plans and helps
turn new technologies into new opportunities. www.solarelectricpower.org
SOURCE: Solar Electric Power Association
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