2013 Solar Outlook
Utility-scale solar installations soared in 2012 -- setting records, in fact -- reaching 8.5 GW of installed capacity.
view the full-size chart.
2013 will mark an important milestone as the first time that solar capacity additions surpass wind capacity additions in the United States. This is, in part, a reflection of solar PV's increasing competitiveness as a form of renewable power generation, according to IHS.
IHS projects that PV installations will reach 35 GW in 2013 -- up from 32 GW in 2012.
Solar photovoltaic will hold its spot as the fastest growing technology in the U.S. energy industry for the next four years due, in part, to falling prices of solar modules and the emergence of new financing models for the residential market, according to Frost & Sullivan.
"In the last two years, the expanded manufacturing capacity in the solar industry, in combination with technological improvements, has lowered the wholesale module prices, making solar panels reasonably priced," said Frost & Sullivan Senior Industry Analyst Georgina Benedetti.
Without public policy goals and direction, vendors and utilities will surely be left with a lot of unanswered questions.
A looming solar fiscal cliff will further propel the number of solar plants constructed in the United States through 2016. At the end of 2016, solar investments can be expected to taper off as the solar federal investment tax credit plummets from 30 percent to 10 percent, giving utilities and developers just enough time to get a utility-scale solar project up and running while still qualifying for the incentive.
In 2013, innovative financing methods, such as solar securitization (in which installation leases are bundled and sold to investors), power purchase agreements, and crowdsourcing, will break down some of the barriers to the high initial cost of solar installations.
Mosaic -- a startup that has launched an online marketplace that connects investors to high-quality solar projects and has raised $1.1 million to finance rooftop solar power plants in California, Arizona and New Jersey -- is joining forces with industry leaders and bankers to make the sun "bankable" utilizing crowdsourcing.
Standardized Risk Assessment
Mosaic is collaborating with 16 solar industry market leaders to standardize risk assessment and develop a score similar to a credit rating for each solar project.
"Mosaic provides a unique way for small investors to reap the same returns that major investors in solar have been enjoying for years while providing the industry with an additional influx of capital," said Marco Krapels, Executive Vice President at Rabobank North America and Mosaic board member.
Recognizing the pent-up demand for investing in solar, Mosaic is working to increase the efficiency with which projects can be evaluated in order to maintain high-quality standards while reducing the time that it takes to bring solar projects to the platform.
Standardizing the way that solar projects are evaluated will significantly improve efficiency and increase the rate at which projects can be financed.
"The process to evaluate projects is very similar to that of other financial institutions, except that after the due diligence we make it possible for the public to participate in and reap the rewards of investing in solar," said Mosaic's Chief Investment Officer Greg Rosen.
After nearly 3 years in the making, BrightSource's solar thermal system is being deployed at the Ivanpah Solar Electric Generating System (ISEGS) in California's Mojave Desert. The 377 MW solar thermal power plant (the first to be built in the United States in more than 20 years), which uses mirrors to focus the sun's power on solar receivers atop power towers, is set to go online in 2013.
At the beginning of 2012, the Ivanpah plant was 25 percent complete with only two of the three towers partially constructed. By the end of 2012, all three towers were fully constructed and more than 50 percent of the three solar fields were installed.
Once complete, the $2.2 billion Ivanpah project will be the largest solar thermal power tower system in the world with a three-unit power system built on approximately 3,500 acres of public desert land. The solar thermal project represents a durable model for far-reaching employment and economic benefit both locally and nationally, according to investors Google and NRG.
Regulators will be watching particularly close to make sure the facility lives up to this billing.
Solar Energy Storage
Batteries are increasingly being seen as an attractive way of retaining PV electricity, letting people use the power later in the day to avoid paying high prices for electricity from the grid. According to IHS, energy storage will transform the solar industry and forecasts a big jump in the number of residential PV systems installed with batteries attached.
In California, 2013 will mark the first large-scale solar project in the state to include energy storage capabilities with the California Public Utilities Commission approval of the sale of power from SolarReserve's $750 million, 150 MW Rice Solar Energy Project to Pacific Gas & Electric.
The project's energy storage capability comes from thousands of mirrors that focus sunlight onto a central tower containing molten salt, which is funneled through a steam generator to produce electricity, retains heat and produces power at night, Bloomberg reported.
On the Hot Seat
Despite a record-setting year in 2012, utilities will be under increasing pressure to do more to promote solar installations in 2013.
The National Renewable Energy Laboratory recommends utilities take a larger role engaging with legislators and regulators at the federal, state, and local levels to best inform policy and program decisions as they pertain to the development of solar energy resources.
The Department of Energy's Solar Energy Technologies Program can be a useful tool for utilities in developing better, more engaging solar programs via technical and informational assistance in promoting awareness, acceptance and use of solar technologies to customers.
Callout: Solar photovoltaic will hold its spot as the fastest growing technology in the U.S. energy industry for the next four years.