Solar Needs Market Changes To Bring Benefits To ‘Untapped’ Texas

5/3/13Follow @bromano

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Solar power production peaks at the same time as electricity demand: on hot, summer afternoons when everyone is turning up the air conditioning. Solar panels can also be installed on rooftops in urban load centers, quickly adding generation closer to where it is needed, without costly and time-consuming transmission upgrades.

“Solar is one of the fastest technologies to bring online, and could be helping out as soon as summer 2014 if there was a viable solar market,” David Brochu, vice president of development for Recurrent Energy, which builds utility-scale solar projects, says via e-mail.

And photovoltaic solar panels use almost no water (except for occasional cleaning) to generate electricity, which should be top-of-mind as much of Texas endures its third consecutive year of drought.

“As a state that needs more generation, it’s really important that the generation they select is cognizant of the water resource restrictions they have,” says Yates, SunEdison’s director of governmental affairs for the Intermountain West.

Moreover, making power from sunlight provides a hedge against fluctuating fossil fuel prices.

“Over a long-term basis, we’re not exposed—and we don’t expose ratepayers and customers—to the risk and volatility of the natural gas market or just the general energy market,” Yates says, adding that this can help keep prices predictable, bolstering Texas’ attractiveness for new businesses.

SunEdison has developed about two-thirds of the utility-scale solar currently online in Texas. Its parent company, MEMC Electronic Materials, has a polysilicon factory in Pasadena, just east of Houston, which makes the raw material for SunEdison solar modules, as well as for the semiconductor industry. The company is also considering building additional solar equipment manufacturing capacity in Texas, Yates says.

About 3,200 people work in the solar industry in Texas, according to The Solar Foundation.

The usual knocks on solar—and other renewable energy sources—are cost, particularly in a period of low natural gas prices, and reliability.

Solar costs have declined dramatically in the last three years, however, amid a global supply glut. And utilities—including municipal utilities in Austin and San Antonio—are designing incentive programs for rooftop solar that recognize its value in avoided costs for environmental compliance, transmission development, and fuel associated with natural gas power generation.

“Solar’s declining cost curve will catch up with the electricity cost curve eventually, bringing solar into the Texas energy mix,” Brochu says.

Yates says SunEdison solar is ready to compete in Texas without subsidies—a position that surprises some people in the energy industry. “We’re not looking for special incentives or unique subsidies to help our technology compete,” she says. “We just want to compete on a level playing field.”

As for reliability, solar is still subject to the vagaries of clouds and sun, but with forecasting improvements, solar output can be predictable an hour or a day in advance, allowing grid operators to plan accordingly. Emerging electricity storage technologies make this easier, while adding costs. (It’s also worth noting that all energy generation sources have reliability issues over the long term. The rolling blackouts that hit Texas in February 2011 were caused in part by coal power plants that went offline because they were unprepared for a cold snap.)

With all of its potential benefits, why has Texas been slow to adopt solar? … Next Page »

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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