More and more U.S. utilities are transitioning from brown to green power. These are clues of how utilities approach solar and clean energy. Retail costs are only relevant for distributed solar. Utility-scale must compete with wholesale prices to make more financial sense to consumers. It’’s crossed a threshold where it is cheaper on a wholesale price.
And as prices and new contracts decrease, it can easily compete with the depressed cost of gas generation. Utility-scale solar is one of the cheapest form of electricity generation due to its consistent prices. Unlike fossil fuel generation, volatile fuel markets rule its industry. Utilities are now procuring large-scale solar from or building it themselves. About 10 GW of utility-scale solar went online last year. Half of that was driven by renewable energy mandates. This includes more than 2 GW that resulted in voluntary procurement by utilities. Voluntary procurement excludes scenarios where businesses are buying power from renewable energy projects. These arrangements keep the increasing number of corporations with 100% renewable energy goals as customers.
Not all interest in solar is not limited to investor-owned utilities. Utilities aren’t the fondest of all mechanisms of procurement. As it has gone from obscurity to becoming a big driver of utility-scale solar, the Public Utilities Regulatory Power Act of 1978 (PURPA) has inspired particularly heated resistance. Utility arguments against PURPA have centered on cost while some state regulators expressed that their utilities are being forced to buy large amounts of power that don’t need. Customer-sited solar that utilities like are the ones they own. In fact, utilities as geographically distinct sought to expand programs that allow them to own rooftop solar and deploy it on their customer’s homes. This keeps utilities in the game and allows them to design systems that provide greater visibility into grid operations. The best compromise for utilities and customers who want solar is community solar. It offers cheap power due to economies of scale, allows renters and homeowners who do not have suitable roofs to contract with power from solar, and it gives utilities a way stay in the game while providing their customers with what that they want. Rethinking the operation of the grid is vital.
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