How do we know when solar becomes a mainstream energy source?
One tipoff: when mainstream energy companies get serious about solar.
For example, take NRG, a Fortune 250 wholesale energy generator with about 26 GW of capacity in its portfolio. Most of that is coal, natural gas, oil and nukes.
That’s the past.
Going forward, as per Platts article:
“About 85% of NRG Energy’s committed investments for the next three years will go to solar projects, mainly for three utility-scale projects that have received federal loan guarantees, the company said Thursday.
Next year, the independent power producer expects to spend $705 million on its solar projects compared with $120 million on conventional projects. From 2013 through 2014, the company intends to spend $315 million on its solar projects and $65 million on conventional projects.
Princeton, New Jersey-based NRG has $3 billion in federal loan guarantees for three projects, with the company having a combined 733-MW stake in the facilities. Now that the Department of Energy loan process has ended, NRG has started to look for entities that would like to buy some of the company’s solar stakes, David Crane, NRG president and CEO, said Thursday during a conference call with analysts.
Without the availability of federal loan guarantees, a program that ended in September, the wave of massive solar projects is probably over, according to Crane. Wall Street does not have the capacity to provide debt financing for the large projects, which have price tags of more than $1 billion, he said. Looking ahead, utility-scale projects will range from 20-MW to 100-MW, he said, noting that the company will pursue those types of projects.
Solar development will come more from rooftop projects, according to Crane. “The distributed, residential is going to end up swamping the bag-scale projects,” he said.
NRG plans to install 733 MW of solar panels over four years on warehouse owned by ProLogis under a partnership backed by DOE and Bank of America.
A form of Moore’s law – the doubling every two years of the number of transistors that can be placed on an integrated circuit – applies to photovoltaic technology, according to Crane. In the last two years, the delivered cost of energy from PV was cut in half, he said. NRG expects the cost to fall in half again in the next two years, which would make solar power less expensive than retail electricity in roughly 20 states, he said. The expected drop in solar costs has “the potential to revolutionize the hub and spoke power system, which currently makes up the power industry,” he said.
While the solar industry has benefited from federal support, the driver for the industry has been state renewable portfolio standards, led by California’s 33% mandate, according to Crane.
In defense of solar in a “highly politicized post-Solyndra world,” Crane said that PV puts less strain on air, water and land resources than other forms of power generation. It is also more predictable and reliable than wind farms, he said.
Meanwhile, NRG is moving to build about 1,500 MW of natural gas-fired generation, Crane said. It has another 1,500 MW of gas-fired projects that have been permitted but lack power purchase agreements, he said.
The company is also open to buying coal-fired generation, Crane said. “We’re not afraid of owning conventional generation,” he said. “We would like to own more generation in the Northeast.” However, the outlook for coal plants in the Northeast is dim, according to Crane. “The economics of coal plants in the Northeast are phenomenally challenged right now,” he said. “It’s not a pretty picture.”
In the same vein, General Electric CEO Jeff Immelt made clear that he’s seen the future, and the future’s solar-powered. GE is building a 400 MW solar manufacturing facility in Colorado. How do they feel about the prospects of solar in a post-Solyndra world? Pretty good:
“We are all-in. We are going to invest what it takes … Because I know by 2020 this is going to be at least a $1 billion product line. I don’t care about Solyndra or any of that other stuff, we did this with no government funding. We can do this,” Immelt said.
Solar. Its not just for hippies anymore.
Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.
2 comments
When you see PV on your, and your neighbor’s rooftop, and you both own it, then it has become a mainstream energy source. When you and your neighbor have an extra $200-300 dollars in your pocket every month (because of a $0 power bill), then it has become a mainstream energy source. When you and your neighbor have quit using gasoline because your EV battery has solar charged, then it has become a mainstream energy source (this weekly fuel savings will be in your pocket too). When the air in your neighborhood (or city) is noticeably cleaner, then it has become a mainstream energy source. When our military (and the associated trillions in costs) has receded from the mid-east, then it has become a mainstream energy source. When you see thousands employed in local area jobs, then it has become a mainstream energy source. When small businesses and residential homes have mandated solar built in, then it has become a mainstream energy source. When you start seeing Banksters, Utilities and oil companies a little saddened by the consumer’s financial liberty, then it has become a mainstream energy source.
I love it…”it’s not just for hippies anymore”. What a funny statement. Although, it’s very true. If we had only listened to those we thought were “hippies” 40 years ago, we wouldn’t have this crazy mad rush right now. Perhaps we wouldn’t even have as bad of an economic slump right now. Interesting food for thought…
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