June 27, 2008—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 US 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 US by 2025.
The study finds that significantly scaling solar power in the US 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, including:
- 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.
Solar power offers a number of advantages over conventional energy sources, such as the ability to deliver energy at or near the point of use, zero fuel costs, minimal maintenance requirements, and zero carbon-based source emissions, notes the study.
The investment to arrive at 10% solar in the US 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, says the report, which points out that utilities spent an estimated $70 billion on new power plants and transmission and distribution systems in 2007 alone.
