Study Offers Roadmap to Solar Power Goal

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 percent solar in the United States by 2025.

The report can be downloaded from www.cleanedge.com or www.solarcatalyst.org.

The study, which finds that significantly scaling solar power will require the active involvement of utilities, delivers a to-do list for the three key stakeholders in the nation's solar industry. Among others, the action items include:

• 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.

The USA Study also reports that solar power is beginning to reach cost parity with conventional energy sources. As solar prices decline and the capital and fuel costs for coal, natural gas, and nuclear plants rise, the United States will reach a crossover point by around 2015.

The investment to arrive at 10 percent solar will reach $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. To put the investment in perspective: Utilities spent an estimated $70 billion on new power plants and transmission and distribution systems in 2007 alone.

"One of the big takeaways from this report is that, in many ways, the future of solar is in the hands of utilities," said Ron Pernick, Clean Edge co-founder and managing director and USA Study coauthor.

In just the past year, a number of utilities and solar companies have announced aggressive programs to deploy large-scale solar power projects, including Southern California Edison's plan to install 250 megawatts of distributed solar PV; Duke Energy's stated goal of investing $100 million in rooftop solar; and Pacific Gas & Electric's announcements to invest in thousands of megawatts of concentrating solar power in California's deserts. While these players are still in the vanguard, a number of other utilities are looking to join them to help bring solar power to scale – and the study shows that solar could become "ubiquitous" as with earlier semiconductor-based revolutions.

"As capital and fuel costs have doubled or tripled for coal, natural gas, and nuclear power over the past few years, solar power costs are coming down," explains Alisa Gravitz, Co-op America executive director and USA Study project director. "For the first time in history, cost-competitive solar power is now within the planning horizon of every utility in the nation."

The study, written by Pernick and Clean Edge contributing editor Clint Wilder, is based on interviews with more than 30 solar, utility, financial, and policy experts and leverages proprietary Clean Edge data on solar PV market size, cost, and pricing history and projections, and other key market factors.

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