Solar fastest-growing U.S. power source since shale boom

Data from the U.S. Energy Information Administration (EIA) has revealed that solar energy is set to grow by more than 30% over the next year, generating an increase in capacity not seen since the last boom in shale gas.

Solar power capacity in the U.S. has increased 20-fold since 2008, boosted by both residential growth across a number of sun-friendly states, as well as a series of large-scale developments that have transformed the country’s PV landscape.

The giant Topaz array in California, coupled with the thousands of new solar customers added every month thanks to suppliers such as SolarCity, NRG Energy and Vivint Solar, have slowly transformed an energy landscape that was last shaken up by the shale gas boom a few years ago.

In April, Michael Blaha of Wood Mackenzie Ltd. told Bloomberg: “Solar is the new shale. Share has lowered cost and enable lower natural gas prices. Solar will lower costs for electricity.”

Solar’s input into the electrical grid is challenging hydro and conventional generators, even delivering negative power prices on sunny days, Bloomberg reports.

In 2014, solar capacity grew by 30%, reaching more than 20 GW cumulatively, and the Solar Energy Industries Association (SEIA) forecasts that figure to have doubled by the end of 2016. By that time, more than 7.6 million U.S. homes will be able to be powered by solar energy. In 2009, that figure stood at just 360,000.

However, solar’s overall share in the U.S. energy landscape stands at less than 1%, behind coal, natural gas, oil, nuclear and hydroelectric power. The EIA states that solar’s intermittent nature means that many grid operators have to keep conventional power plants on standby during cloudy days, but some public service commissions are overhauling their rate system in order to keep transmission owners profitable as more and more U.S. citizens begin producing their own power.

At the other extreme, the U.S.’s largest solar power parks are already caused waves across the power market, with the 550 MW Topaz plant – the world’s largest – and the forthcoming 579 MW Solar Star Project set to inject vast amounts of solar power into their local grids, disrupting energy prices in the process.

On April 23, reports Bloomberg, spot wholesale prices at Southern California’s SP15 hub – an area that covers Los Angeles and San Diego – averaged minus $60.94/MWh between 8am and 6pm. By noon that day, solar power accounted for 23% of the power generation of the region. The negative price of energy meant that the sell paid the buyer to take the power, so as to be able to keep its generator running.

In addition to the Topaz and Solar Star plants, Apple is also investing $850 million into a nearby solar plant, being built with the assistance of U.S. thin film company, First Solar.