Solar projects are becoming hot investments.
Scott M. Gawlicki is Fortnightly’s contributing editor, based in Hartford, Ct.
Taught from an early age to generate or procure power from the lowest-cost resources, America’s utilities historically have scoffed at solar energy. In addition to its comparatively high cost and diminutive plant capacity, solar’s variable and non-dispatchable output poses technical issues that most utilities would prefer to avoid.
But solar technologies have been steadily scaling up in recent years, and becoming more cost effective. Plus, renewable portfolio standards (RPS) in 33 states are forcing utilities to make solar and other renewable energy sources a substantial part of their generation mix. A 2010 market study by consulting firm IHS Inc. spells it out: cumulative renewables demand across all states with binding RPS policies will grow from an expected 137 TWh (terawatt-hours) in 2010 to 479 TWh by 2025, an increase of approximately 250 percent.
Facing the need to comply with state mandates, utilities are increasingly moving toward development and ownership of renewable assets—including solar.