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From Clean Edge
A new study makes the case that solar power is emerging as a cost-
effective hedge against fossil fuels and is likely to reach cost
parity with retail-electricity rates in most regions of the U.S. in
less than a decade.
The Utility Solar Assessment (USA) Study, produced by clean-tech
research and publishing firm Clean Edge and green-economy nonprofit
Co-op America, provides a comprehensive roadmap for utilities, solar
companies, and regulators to reach 10% solar in the U.S. by 2025.
The report can be downloaded at www.cleanedge.com and www.solarcatalyst.org (Co-op America's solar
program Web site).
The study finds that significantly scaling solar power in the U.S.
will require the active involvement of utilities. The study delivers
a to-do list for the three key stakeholders in the nation's solar
industry. Among others, the action items include:
-For utilities: Take advantage of the unique value of solar for peak
generation and alleviating grid congestion; implement solar as part
of the build-out of the smart grid; and adapt to new market
realities with new business models.
-For solar companies: Bring installed solar systems costs to $3 per
peak watt or less by 2018; streamline installations; and make solar
a truly plug-and-play technology.
-For regulators and policy makers: Pass a long-term extension of
investment and production tax credits for solar and other
renewables; establish open standards for solar interconnection; and
give utilities the ability to "rate-base" solar.
The USA Study also reports that:
-For the first time solar power is beginning to reach cost parity
with conventional energy sources. As solar prices decline and the
capital and fuel costs for coal, natural gas, and nuclear plants
rise, the U.S. will reach a crossover point by around
2015.
-Installed solar PV prices are projected to decline from an average
$5.50-$7.00 peak watt (15-32 cents kWh) today to $3.02-$3.82 peak
watt (8-18 cents kWh) in 2015 to $1.43-$1.82 peak watt (4-8 cents
kWh) by 2025
-Solar power offers a number of advantages over conventional energy
sources. Among them, the ability to deliver energy at or near the
point of use, zero fuel costs, minimal maintenance requirements and
zero carbon-based source emissions.
-The investment to arrive at 10% solar in the U.S. is not small,
reaching $450 billion to $560 billion between now and 2025, an
average of $26 billion to $33 billion per year. However, given
utilities' existing capital costs such an investment is not
prohibitive. To put the investment in perspective: Utilities spent
an estimated $70 billion on new power plants and transmission and
distribution systems in 2007 alone.
"One of the big takeaways from this report is that, in many ways,
the future of solar is in the hands of utilities," said Ron Pernick,
Clean Edge cofounder and managing director and USA Study
coauthor. "Reaching 10 percent of our electricity from solar sources
by 2025 will require the active participation of utilities along
with the support and participation of regulators and solar
technology companies."
In just the past year, a number of utilities and solar companies
have announced aggressive programs to deploy large-scale solar power
projects, including Southern California Edison's plan to install 250
megawatts of distributed solar PV, Duke Energy's stated goal of
investing $100 million in rooftop solar, and Pacific Gas &
Electric's announcements to invest in thousands of megawatts of
concentrating solar power in California's deserts. While these
players are still in the vanguard, a number of other utilities are
looking to join them to help bring solar power to scale – and the
study shows that solar could become "ubiquitous" as with earlier
semiconductor-based revolutions.
"As capital and fuel costs have doubled or tripled for coal, natural
gas, and nuclear power over the past few years, solar power costs
are coming down," explains Alisa Gravitz, Co-op America executive
director and USA Study project director. "For the first time in
history, cost-competitive solar power is now within the planning
horizon of every utility in the nation."
The study, written by Pernick and Clean Edge contributing editor
Clint Wilder, is based on interviews with more than 30 solar,
utility, financial, and policy experts and leverages proprietary
Clean Edge data on solar PV market size, cost and pricing history
and projections, and other key market factors.
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