The plunging cost of solar power is leading US electric companies to capture more of the sun just when President Donald Trump is moving to boost coal and other fossil fuels. Solar power represents just about 1 per cent of the electricity US utilities generate today, but that could grow substantially as major electric utilities move into smaller-scale solar farming, a niche developed by local cooperatives and non-profits.
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It’s both an opportunity and a defensive maneuver: Sunshine-capturing technology has become so cheap, so quickly, that utilities are moving to preserve their core business against competition from household solar panels. “Solar growth is so extensive and has so much momentum behind it that we’re at the point where you can’t put the genie back in the bottle,” said Jeffrey RS Brownson, a Pennsylvania State University professor who studies solar adoption.
“You either learn how to work with this new medium, solar energy, or you’re going to face increasing conflicts.” The transition away from coal-burning power plants now seems unstoppable, even if Trump scraps rules requiring utilities to reduce greenhouse gas emissions. The average lifetime cost for utility-scale wind and solar generation in the US is now cheaper than coal or nuclear and comparable to natural gas, according to financial advisory firm Lazard, which compared the fuel costs without their federal tax subsidies.
Wind and solar were expected to account for about two-thirds of the new electricity generation capacity added to the nation’s power grid in 2016, outpacing fossil fuel expansion for a third straight year, according to the US Energy Department. And even though big investor-owned utilities operate as legal monopolies in many states, the bill-lowering appeal of rooftop solar for many homeowners could eventually threaten their ability to finance and manage the power grids.
These trends help explain why utilities are increasingly adopting a model called “community solar,” or “shared solar,” which involves customers agreeing to buy or lease solar panels on large arrays built for the utility, or to buy the power they produce.
That electricity is then credited off utility bills under contracts that can lock in power prices for 10 years or more. Utility-run shared solar also can address competition from independent solar companies that install and operate rooftop solar panels, harvesting and providing the energy at a fixed cost to the individual consumer or some other buyer.
These projects also could appeal to the roughly half of American households that can’t install solar panels because they don’t own their homes, lack the good credit needed to finance an installation, or lack sufficient roof space where the sun shines consistently, the Energy Department’s National Renewable Energy Laboratory reported.