PV solar power poised for significant growth, Barclays Capital research says
The solar industry could add significant capacity over the next three years as large utilities green their generation portfolio to meet state and possible federal requirements to produce more electricity from renewable resources. Surprisingly, solar photovoltaic (PV), rather than thermal concentrating solar power (CSP), could account for much of that new capacity.
CSP systems produce electricity by capturing solar heat to drive steam turbines or reciprocating engines that spin electric generators. PV systems use electronic photovoltaic modules and inverters to convert sunlight into electricity. CSP plants currently account for the bulk of the project pipeline of utility-scale solar generation.
But in a research note released today, Barclays Capital analyst Vishal Shah writes that the 2009-2012 period could see major utilities turn to PV for large utility-scale projects. He says that the lower cost of solar PV could lead to the installation of nearly five gigawatts of PV capacity. “Solar thermal companies have dominated the utility solar landscape to date with several large project wins; however, with solar PV cost declining significantly, the advantage of solar PV technology over solar thermal…has recently increased,” he writes.
Just last week Southern California Edison secured regulatory approval to develop a 500-megawatt PV project. The PV arrays are to be installed on the rooftops of commercial buildings across its service area. In San Francisco, Pacific Gas and Electric said last week that it would purchase an average of 592 gigawatt-hours of electricity annually from a 230-megawatt PV facility to be developed by NextLight Renewable Power. Both SCE and PG&E are required by state mandates to produce 33 percent of their electricity from renewable sources by 2030 and 20 percent by next year.
Citing data from the Bureau of Land Management, Shah notes that 20 applications — totalling 13.7 gigawatts of new capacity — have so far been made for solar PV projects. Applications for solar thermal projects account for 30 gigawatts of potential solar generation capacity. “We expect a greater percentage of solar PV projects to get constructed and see a potential shift from solar thermal to solar PV project development,” Shah predicts.
Shah adds that the only edge solar thermal technology currently has is its ability to store electricity. That’s crucial. because unlike current PV facilities, solar thermal plant’s ability to store their electricity output means they can supply the grid during both peak and off peak periods. But Shah counters that the storage technology “is unproven and highly maintenance intensive. As such, several developers are inclined to prefer the solar PV option.”
Shah says that demand for utility-scale solar projects — both PV and solar thermal — could eventually make up half of the U.S. market.