[Note, this story goes live on Day 1 of Solar Power International, the nation's largest solar power industry trade show.  At the show many of the topics discussed in this in-depth Renewable Energy World North America magazine article will be highlighted, discussed and on display.  Keep your eye out for coverage of the event right here on RenewableEnergyWorld.com.]

Then there's the 21 MW Blythe power plant in Riverside County, Calif. First Solar developed and built the plant. Electricity generated by the facility is being sold to Southern California Edison (SCE) under a 20-year power purchase agreement. The Blythe plant is one of the largest thin film PV projects in the U.S.

Dayton Power and Light's 1.1MW PV array opened in June 2010.  It includes 9120 thin film solar modules.  Photo: Sharp Solar.      See 10 solar images by clicking "View All images," on the right-hand side of this article.

Spawning developments like the Blythe plant, California continues to lead the U.S. solar market with 53 percent of U.S. PV on-grid installations, according to Solarbuzz, a market research business focused on solar developments. But solar power is no longer just a California thing.

"Now just about every place in the U.S. is being represented by solar," Kenedi said. "In the Southeast, you have Tennessee and Florida; in the Northeast, Pennsylvania and New Jersey; in the West, Colorado, California and Nevada."

Sharp began developing solar cells in 1959 and now spreads its solar reach across the nation: a 6 MW plant in Mendota, Calif., a 1.1 MW plant in Dayton, Ohio, as well as several projects in Pennsylvania.

Julia Hamm, president and CEO of the Washington, D.C.-based Solar Electric Power Association (SEPA), said one of the major trends in solar is diversification. "We're seeing the solar development happen in a much broader way across the country rather than being so California-centric."

What Recession?

The solar industry shone brightly in 2009 while much of the rest of the economy was in a blackout. According to the American Solar Energy Society, 33,000 solar installations were made in 2009, a 40 percent increase from the 251 MW in 2008 to 481 MW in 2009. The Solar Energy Industries Association's (SEIA's) U.S. Solar Industry Year in Review 2009 (PDF) said total U.S. solar electric capacity from PV and concentrating solar power (CSP) technologies climbed past 2,000 MW. Venture capitalists invested more in solar technologies than any other clean technology in 2009, pumping some $1.4 billion into solar companies, according to SEIA.

Hamm said utility-scale projects grew by 267 percent in 2009. According to SEPA's latest ranking, top utilities were Pacific Gas & Electric Co. in California, Southern California Edison, Public Service Electric & Gas Co. in New Jersey, Florida Power & Light Co., San Diego Gas & Electric Co., Public Service Co. of Colorado-Xcel Energy, Arizona Public Service Co., Salt River Project in Arizona, Sacramento Municipal Utility District in California and the Los Angeles Department of Water and Power.

Big PV/CST Developments

When it comes to solar power, utilities have two technology choices: photovoltaic (PV) and concentrating solar power (CSP), or solar thermal. According to SEPA, almost two-thirds of the currently installed cumulative megawatts in the U.S. are PV. CSP makes up the remainder, facing longer planning and construction horizons. PV made up 98 percent of the installed megawatts in the U.S. last year, while two small CSP projects came online: a 2 MW plant in Hawaii and a 5 MW power tower in California.

Solar Energy Power Association

Hamm said there are more CSP projects being planned than PV, but the time frame is longer and the fall-off rate higher. Often, CSP projects will not go forward because of a company's inability to get necessary permits or financing.

Solar thermal technology has been coined by The New York Times as "the holy grail of renewable energy" because of its capacity to prolong the use of solar power into the evening hours through the use of energy storage. Santa Monica, Calif.-based SolarReserve is a solar-thermal developer that uses a molten salt system for energy storage to meet the problem that many other renewable energy technologies face: intermittency and instability. SolarReserve's technology, licensed from United Technologies' Pratt and Whitney Rocketdyne business unit, uses ground-mounted heliostats, heat-concentrating towers, high operating temperatures and molten salt storage. The heliostats reflect sunlight to a 100-foot-high receiver atop 553-foot-tall towers. There the receiver transfers the sun's concentrated rays to molten salt, heating the sodium and potassium nitrate mixture to 1,050 F. The liquid molten salt is then transferred to a storage tank where it loses no more than 1 degree a day.

With conventional solar technologies such as PV, power can only be produced during daytime hours. Tom Georgis, vice president of development for SolarReserve, said his company is "capturing and storing solar energy for use when it is needed most, even at night." Heat contained in the molten salt can be released on demand thus eliminating intermittency issues a traditional solar plant might experience.

"We have the ability to shift power generation," he said. "It doesn't stop when the sun goes down."

SolarReserve's largest project under development is a 150 MW solar farm in the Sonoran Desert east of Palm Springs. The Rice Solar Energy Project will store seven hours' worth of the sun's energy and is anticipated to go online in October 2013. In January, SolarReserve won a contract with Nevada's largest utility, NV Energy, for a 100 MW solar energy project that will break ground at the end of 2010 near Tonopah, Nev. This deal marks one of the first times a U.S. utility has contracted for solar power tower technology utilizing molten salt storage. This could be among the first commercial installations that will be able to avoid intermittency problems, as well as the ability to provide power after the sun goes down.

While NV Energy is working with SolarReserve on the Tonopah project, the utility's main solar focus is PV. Still in the development stage, NV Energy's largest PV project is Silver State Solar, a 50 MW plant near Primm, Nev. that is expected to be operational in 2012. Also in the works is the Fotowatio Nevada Solar Power, a 20.5 MW plant owned by Fotowatio that is expected to be operational in 2011, and Searchlight 1, a 17.5 MW plant owned by American Capital Energy that is expected to go online in 2011.

Another utility in the PV market is Southern California Edison (SCE), which saw 131 percent growth from 2008 to 2009 in cumulative solar megawatts, making the utility No. 1 for cumulative solar megawatts in the SEPA rankings. In the works for SCE is a 500 MW solar panel project consisting of 75 to 100 sites, each with a generating capacity of 1 to 10 MW. Four of the structures in the program will be placed at the Ontario, Calif. airport. SCE prides itself on the 13 billion kilowatt-hours of renewable generation it provides annually, boasting that the electric power it generates includes more alternate and renewable energy (16.7 percent) than almost any other utility. As an administrator of the California Solar Initiative, SCE has made it a goal to help the state meet its million commercial PV solar rooftops at a fraction of the cost of typical PV installations and without drawing funds from the California Solar Initiative.

Mark Nelson, director of SCE's solar PV project, said this goal is achievable by using existing rooftops and connecting to the distribution grids. "There's nothing in it for us to keep things to ourselves. We're continuing to push ahead, support policy and trying to bring down costs," Nelson said.

Supply and Demand

Competition from solar panels continues to make PV the fastest growing solar market in North America. PV is easier to finance, quicker to permit and easier to deploy than CSP. And panel costs are falling to the range of $3.50 to $5.50 a watt. Solar thermal costs remain largely unchanged at $7 to $8 a watt.

As Chinese manufacturers enter the solar market, competition has caused downward pressure on PV manufacturing prices. Aside from manufacturing, the solar power industry has recovered in the past year from oversupply to a healthier balance of supply and demand. Many solar programs were just launching when the recession hit, causing financing for big jobs to become congested. "The train got derailed for a little while," Kenedi said. With high demand from European markets whose incentives will soon run dry and the continual growth of the U.S. market, the balance of supply and demand is now more equal.

"The market has grown faster than we thought it would," Kenedi said. "We're doing a good job at lowering the price of solar." He said the cost of a PV system has dropped 35 to 40 percent in the last 14 months.

Tim Keating, vice president of marketing and field operations for Mountain View, Calif.-based Skyline Solar, said the balance of supply and demand in the solar market should hold through 2011. "It doesn't mean there isn't bunching up in the supply chain or second or third-level materials," he said. "But essentially, we see very good demand."

Tom Fair, vice president of renewables for NV Energy, said costs will continue to go down as more technology is developed and as companies become smarter on how to operate solar. "It's about how you do things; every hole you drill, every bolt you fasten, everything becomes a balance down to the knit. That's part of the economic equation for PV." But it's only part of the equation.

Incentives

Incentives work like a magnet to draw some power companies into renewables. One strong incentive has been the Treasury Grant Program, a cash grant that can be taken in lieu of the Investment Tax Credit, providing a 30 percent incentive to property that is part of a qualified facility, fuel cell property, solar property or small wind property. The 30 percent Treasury Grant Program was extended in October 2008 but is set to expire at the end 2010. As a result, many in the solar industry are rushing to meet the start-construction deadline of December 31.

Solar Energy Power Association

Dan Adamson, vice president of government affairs for SEIA, said the Treasury Grant Program has a good chance of being extended.

"That's been our top issue in our lobbying, and it has bi-partisan support," Adamson said. "If Congress passes some kind of an energy tax bill, we'll be able to get the energy grant bill extended."

Another potential cutback in funding for renewables is the likely reduction of the Department of Energy (DOE) loan guarantee. In early August, the Senate approved a $26 billion package to save states from laying off thousands of teachers and to fund Medicaid. This package hit the renewables market, as part of the funds will be drawn from the $6 billion DOE fund. This same fund was scavenged last year when the Senate cut $2 billion from it to give to the Cash for Clunkers program. The cuts leave the DOE fund at around $2.5 billion.

Adamson said solar will most likely be affected by this diversion of funds more than other renewables.

"Solar has more applications for loan guarantees than any technology, so it's likely to really hit solar in a negative way," Adamson said.

The uncertain extension of the Treasury Grant Program, as well as state regulatory barriers that affect utilities are the main hindrances to solar growth, Adamson said.

Currently, 31 states have renewable portfolio standards, and all 31 are different. Buck Martinez is senior director of solar development at Florida Power & Light (FP&L), the company responsible for the largest PV development in the U.S. to date, the 25 MW plant commissioned by President Obama in Desoto County, Fla. Martinez said that for the U.S. solar market to get "true penetration," sustainable long-term policies must be in place that extend beyond those that currently exist. Florida is one of 19 states without a renewable portfolio mandate.

"You have to feel safe that there's going to be long-term contract availability in your state. If not, people will continue to have solar farmed out to China, Mexico or other places," Martinez said.

Tom Fair of NV Energy said tax incentives need to be reliable for the solar industry to move forward. "It really does make for a more certain investment environment. If you know what your tax situation is going to be a couple years from now, then you can put your money into something."

The European Union (EU) has found success in its feed-in tariff program. And the Ontario Power Authority (OPA) was commissioned last fall by the province to commence a feed-in tariff program similar to that of the EU. Ontario adopted the Green Energy and Green Economy Act that provides a feed-in tariff program for all renewables: solar, hydro, wind and bio energy. In addition, the Act also includes a commitment to energy conservation improvements, smart grid developments, and supports the creation of 50,000 jobs over the next three years. Ontario's goal is to go off of coal by 2014, said JoAnne Butler, OPA's vice president of electricity resources. This will mean shutting down coal-fired plants that produce 6,000 MW province-wide. Butler said Ontario is well on its way to meeting this goal.

The challenge to renewable growth in Ontario is lack of available transmission capacity, Butler said. OPA's plan is to contract for 2,500 MW of renewables, but "that uses every megawatt of access capacity on the Ontario grid." However, Ontario is working on a series of transmission system expansion projects aimed at opening up capacity to accommodate more renewable projects in the future. (Read more about the Ontario feed-in tariff in this issue's Final Word column.)

Many solar providers in the U.S. hope to eventually adopt a tariff program similar to those in Europe and Ontario. Diana Drysdale, vice president of utilities for PSEG Solar Source, said incentives have helped accelerate the growth of solar technologies in the U.S. and abroad, but should be adjusted as companies outgrow the incentives. She compared incentives to putting training wheels on a bike.

"Without them, you're going to have some scabby knees. And you don't want them on there too long. Taking them away too soon would be disastrous for this industry," Drysdale said.

Future Projections

Solarbuzz released a study in July projecting that U.S. solar will grow tenfold by 2014. On a global scale, the U.S. is fourth in PV production behind Germany, Spain and Japan. In CSP developments, the U.S. is No. 1 for CSP production with 431 MW as of March 2010. Spain was No. 2 at 231 MW. However, Spain ranked No. 1 in solar thermal growth, adding 220 MW from March 2009 to March 2010. The U.S. added 7 MW.

So is the futue of solar in North America truly bright?

Tom Fair of NV Energy said he has a bullish outlook on the Southwest because of the resources and land available.

"Solar energy is space intensive, whether it's land or rooftop. You don't want to have to pay high land values to acquire sites."

Not only are companies staying in rural areas to cut back on costs, but many are moving toward distributed generation– smaller installations located at the site of energy demand.

Tim Keating of Skyline Solar said distributed generation is appealing because its generation is the most efficient. Skyline recently announced its first High Gain Solar commercial project, an 80 kW distributed generation installation in Nipton, Calif. on the edge of the Mojave Desert (see lead image), where Keating said over 85 percent of the power for the town can be generated by solar energy.

"If plants are distributing power to locations 100 miles away, then 30 percent of that power could be lost in transmission." With distributed generation, Keating said, "every bit of power gets used. It's 30 percent more effective from that alone." Distributed generation is easier and faster to build, can feed directly into the grid and allows power producers to experiment on a smaller scale with various technologies.

With distributed generation, producers do not have to obtain a reservation on transmission lines, which usually takes three to five years. Producers also need to keep in mind that the federal tax credit does not cover transmission lines, which can increase a project's overall cost, Keating said. Unless a power producer owns all the land the transmission lines occupy, the company could incur legal fees and property-use negotiations.

Fundamental Shift

The way in which electricity has been produced over the last century is transforming, said Julia Hamm of SEPA. "Before, it's been about very large power plants. Transitioning to a portfolio that includes a larger percentage of distributed solar is a pretty fundamental shift."

Hamm said that one of SEPA's challenges is educating regulators "about the true value of solar beyond just the value of the electricity itself." While most regulators are accustomed to utilities requesting approval for 500 to 1000 MW power plants, solar plants are frequently much smaller and "require fundamental changes to the way the utility industry goes about its business."

Hamm said a recent breakthrough in solar was the announcement from Colorado-based Tri-State Generation and Transmission Association Inc. to buy the power output from a 30 MW thin-film plant. "We've seen very little involvement in solar from the electric cooperative segment of the industry historically, and to have Tri-State buying 30 MW of solar electricity which they'll be providing to their 44 cooperative members is a really big deal in the utility sector."

For 2011, solar producers expect more jobs to be created and prices to continue to fall. Still, because solar power is produced only during peak hours, it provides less than 1 percent of U.S. power. Some analysts say the cost of nuclear and solar is now equal, but base load still has to be taken into account. While solar plants may be cheaper to build than nuclear or coal plants and may be less restricted by EPA regulations or other legislation when it comes to greenhouse gas emissions, solar is not capable of operating 24/7 like its fossil-fired or uranium-fueled competitors.

Still, solar operators remain hopeful, concentrating on the environmental benefits that solar encourages, the longevity of the products and the thousands of jobs that are expected to become available. SEIA estimates that employment increased by 10,000 people in the solar industry from 2008 to 2009. Solar providers are saying the next couple years have even stronger potential for job growth.

Sharp's Ron Kenedi said he expects the U.S. will have the largest solar market in the world by 2013 or 2014. "This is an American technology built in the U.S. to be used on American buildings to help us become better global citizens."

 

  To subscribe or visit go to:  http://www.renewableenergyaccess.com