On September 15, Duke Energy announced plans to commit $500 million to utility-scale solar power in the state of North Carolina. This announcement is the latest development in an industry-wide embrace of large-scale renewable energy generation by utilities across the country.
These efforts grew out of a Request for Proposals (RFP) that Duke issued in February of this year. Among other things, the RFP sought projects that were in the company’s current transmission and distribution queue and that could be stitched together to provide a significant amount of power (hundreds of megawatts (MW) in total) from renewable sources.
The roadmap that emerged from the RFP led the company to develop plans for constructing and acquiring three utility-scale solar facilities that will generate a total of 128MW of capacity. The plan calls for a 40MW facility to be built in Wilson County, another 23MW facility in Bladen County, near Cumberland County line, and a 65MW facility in Duplin County facility – the largest solar facility on the East Coast. In addition, Duke has developed five purchase-power agreements that will provide a further 150MW of power. In sum, Duke will add 278MW of solar power to its portfolio, catapulting North Carolina to the forefront of the renewable energy revolution. This massive commitment to solar highlights the many upsides associated with utility-scale solar.
Why Utility-Scale Solar Matters
Utility-scale solar is essentially a centralized, large-scale solar energy facility that is owned by or sells power to utility companies. Utility-scale solar projects are typically larger than rooftop solar systems. Many utility-scale solar facilities also utilize built-in electrical storage that provides power even when the sun is not shining.
Electric companies are embracing solar for a number of reasons. Utility-scale solar facilities provide a vehicle for utilities like Duke to meet state Renewable Energy Portfolio Standards and diversify their fuel sources to ensure greater stability and reduce emissions. As equipment costs continue to decline, solar will become an ever more attractive option for utilities.
Utility-scale solar projects are increasingly common. The U.S. Energy Information Agency has found that solar has experienced 418% growth since 2010. In 2013 alone, utility-scale solar accounted for 63 percent of new solar installations in 2013, adding 2,847MW of capacity.
Utility-scale solar makes up such a large percentage of solar growth because it has a number of advantages over other, smaller-scale solar models like distributed generation and rooftop solar. For instance, utility-scale solar is far more cost efficient than rooftop solar. Utility-scale solar installations are larger, ranging in size from 10MW to over 200MW, whereas a typical residential installation can generate about 5 kilowatts (KW) of power. A 50MW plant supplies enough energy to power 20,000 homes. As the scale of solar installations continues to increase, the price per-KW and per-MW decreases as a result of economies of scale as well as cost savings for maintenance and permitting.
Utility-Scale vs. Rooftop Solar
Equally as important, utility-scale is a much more inclusive and equitable means of providing solar energy. Competing models like rooftop solar require a consumer to own their own home, making it inaccessible for the 35 percent of Americans who are renters and for a large portion of demographic groups like African Americans, more than half of whom live in rental housing. Solar is also too expensive for most Americans, making it a luxury for higher-income households and a distant dream for those with lower or fixed incomes. A rooftop solar system costs between $18,000 and $40,000 dollars. Most families don’t have enough savings to last three month, so it’s unlikely that they have additional savings to purchase a rooftop solar system.
Solar leasing is always an option, but not for all consumers. Solar lessees must have a stellar credit history (in addition to owning a home). Many consumers, including low-income residents and many African American, lack adequate credit resources to qualify for solar leasing. This is precisely why solar leasing correlates with neighborhoods where homeowners have an average annual income of $100,000 or more. The realities of these preconditions limit access to solar for too many. Utility-scale solar, on the other hand, democratizes solar and makes it available for everyone.
A Brighter Future for Many
Duke Energy’s $500 million commitment to utility-scale solar is a huge step forward for the U.S. energy sector, for consumers, and for the state of North Carolina. Solar will likely play a larger and larger role in U.S. energy policy going forward, which is why efforts like Duke’s is important for helping states – and the country as a whole – figure out the best path forward.