Solar Energy Economics
Solar energy has evolved from an environmental green to the color of money. As the result of rapidly declining module prices and increasing development productivity, solar energy is no longer just good for the planet. Solar is now important for business economics. In 2019, the solar industry accounted for over $18 billion of investment in the American economy. Global investment is solar capacity is estimated to reach $2.7 trillion over the next decade.
Plummeting price of solar energy
As costs decrease, ROI increases, leading to more and more investment. Over the past decade, the cost of photovoltaic (PV) solar energy has dropped by 82 percent according to the International Renewable Energy Agency. Module prices are a third of what they were in 2016. During the same period global solar capacity increased 1,350 percent, from 40 GW to 580 GW. Solar power is becoming cheaper than coal powered electricity and is pacing to become the lowest cost form of electric power generation.
The global coronavirus pandemic has reduced electricity consumption has solar component manufacturers have been cutting prices. Looking ahead, these lower prices will further increase the competitiveness of photovoltaic electricity relative to natural gas and coal.
Solar connections to the grid
As coal-powered generating stations are closing down, industrial scale solar facilities can and are being located in close proximity to take advantage of the existing transmission infrastructure. Photosol’s proposed Shiprock Solar facility in northwest New Mexico is a perfect example. This 372-megawatt facility will be located in close proximity to existing interstate transmission infrastructure and where the coal-fired San Juan Generating Station may close in 2022. Industrial scale solar projects such as this will help New Mexico meet its goals of carbon-free electricity generation by 2050.
In Nevada, Arevia Power is moving forward with its Gemini Solar Project. This 690-megawatt facility is located near Las Vegas and will generate enough solar energy to serve about 400,000 homes per year. A 380 megawatt battery storage system will help ensure power is available when needed most.
A 2018 article by Bloomberg described a Kentucky coal company’s plan to convert an abandoned strip mine into the state’s largest solar farm, putting former miners back to work.
Airport solar energy
Veregy is a leader in commercial renewable energy. Solar-covered parking canopies at airports are a unique opportunity to generate energy while improving the parking amenity. Airport budgets benefit from reduced energy costs and increased parking fee revenue. For example, the canopy installation at the Evansville, Indiana regional airport generates 1.3 megawatts over 400 parking spaces. These solar canopies supply half of the terminal’s power needs.
At the Tucson International Airport, Midstate Energy installed 2.4 megawatts of panels over 12 acres of parking. This facility is expected to save the airport $35,000 per year in utility expenses while cutting CO2 emissions by over 4 million pounds annually.
New improvements in battery storage technology further enhances the value of solar energy by allowing supply to reliably match demand. Between 2015 and 2018, nearly 500 megawatts of large battery storage was installed on the national grid.
Triple Point Solutions for Solar Energy
Triple Point Strategic Consulting works with renewable energy service companies and environmental consulting firms to support the planning and development of commercial and utility-scale projects. IMPLAN is a valuable tool for assessing the economic impacts of constructing and operating renewable energy facilities. Earlier this year, a group of Colorado business leaders launched the Signal Tech Coalition to support public-private partnerships and leverage Colorado’s clean energy for the coming economic recovery, demonstrating that what was once just good for the planet is now good for business.