ORIGINAL REPORTING: How Utilities And Their Regulators Will Determine The Future Of Solar
How utilities and their regulators will determine the future of solar; Rate design holds the key to whether there are 40 states with solar at grid parity in 2020, or just two
Herman K. Trabish, February 25, 2016 (Utility Dive)
The battle to defend solar goes on.
Solar has reached competitive pricing with traditional generation resources in at least 20 states, but how utilities and regulators structure rates will determine if that number grows or shrinks in the coming years. With solar-friendly policies, the number of states with solar at grid parity could double by the end of the decade, or dwindle to only a few, according to U.S. Residential Solar Economic Outlook 2016-2020 from GTM Research. The biggest factor in whether there are 42 states or two states at grid parity in 2020 is whether and how much solar installation cost declines outpace any downward changes in the solar value proposition through NEM and rate reforms, study author Cory Honeyman told Utility Dive…
Residential solar growth numbers continue to make solar the fastest growing sector of the solar market. Since 2013, residential solar has grown over 50% year-on-year. This growth calls for a better understanding of solar “grid parity,” which is “the minimum threshold of economic attractiveness where the levelized cost of energy (LCOE) dips below a customer’s electricity bill savings in year 1 of system life…Without regulators’ understanding of the intricacies of solar savings, the path to grid parity might be harder to attain. If every state’s major utility added the monthly $50 fixed charge for solar owners that has been proposed in several states already, only Hawaii and California would still be at parity. The trend suggests that the major national solar installers should diversify geographically as a hedge against being exposed in states where net metering or rate reforms may roll back the solar value proposition… click here for more