Small-Scale Solar Has a Big Role to Play in the U.S. Energy Revolution
For all the talk in recent years about Germany’s Energiewende — the Teutonic moniker for that country’s bold bid to replace its aging nuclear reactor fleet with renewables and efficiency — America is in the midst of its own energy revolution, finds a new report by Bloomberg New Energy Finance.
“A revolution is transforming how the U.S. produces, delivers, and consumes energy. The mix of supply is changing rapidly, with low-carbon sources gaining share, while consumption is declining, despite overall economic growth,” according to the 2014 Sustainable Energy in America Factbook, commissioned by The Business Council for Sustainable Energy and released this week.
The report highlights the current big trends in energy efficiency, transportation and electricity generation and concludes that these have combined to put U.S. carbon-dioxide emissions “on a long-term downward trajectory.”
Among the key findings are that solar power’s contribution to the nation’s electricity portfolio is growing quickly and that small-scale solar electric systems have only just begun to unleash their “disruptive potential” upon the business-as-usual utility segment.
Fueled by falling prices for photovoltaic (PV) panels and solar-generated electricity, Bloomberg NEF forecasts that the record year for U.S. PV capacity additions in 2013 — including approximately 2,000 megawatts from centralized PV power plants and another some 2,000 megawatts from small-scale, distributed solar plants and rooftop systems — will repeat in record fashion in 2014.
“Prices of solar modules have declined by 99 percent since 1976 and by about 80 percent since 2008,” according to the data-rich report, which says that all-time-low solar electricity prices now have plummeted below 7 cents per kilowatt-hour for large-scale PV and helped to rally billions of dollars in investment for third-party-financed small-scale solar installations. Third-party financers, according to the report, raised $6.7 billion between 2008 and 2013 to build and lease small-scale solar systems — sized 1 MW in capacity and below — at U.S. homes and businesses.
Thanks in part to this expansion of innovative financing solutions that overcome the upfront cost barrier for many homeowners and business owners, “distributed generation emerged as a transformative phenomenon — if not yet in substance, then as a foreshadower of what’s to come,” said Bloomberg NEF.
Even though the vast majority of the country’s electricity continues to come from large-scale, centralized power plants, “the rise of distributed generation is ushering into the U.S. power industry new players and new business models, and testing the durability of old ones,” assessed the report, adding, “What lies ahead when it comes to distributed generation is more important than the current situation.”
In reference to the recent and ongoing disputes over net energy metering services for solar-powered utility customers in states like Arizona, California, Colorado and Hawaii, the report said that the “intense regulatory battles that played out across the country in 2013 over the relative costs and benefits of distributed PV” are a testament to how serious of a threat of small-scale solar has become.
Solar panel photo CC-licensed by Flickr user Chandra Marsono.
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