NewEnergyNews: TODAY’S STUDY: How One State Is Getting Ready To Grow Solar

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    Monday, August 27, 2018

    TODAY’S STUDY: How One State Is Getting Ready To Grow Solar

    Pennsylvania’s Solar Future Plan

    July 7, 2018 (Pennsylvania Department of Environmental Protection)

    Executive Summary

    Today Pennsylvania is well situated to lead the country into the next age of energy development: clean, renewable solar photovoltaic (PV) energy. While nearby states have embraced solar development to a greater degree than Pennsylvania, the experience they gained can now be used here to enhance both distributed generation and large “grid scale” solar PV farms connected to the transmission grid. In fact, whereas in 2000, Pennsylvania had less than one Megawatt (MW) of solar installed, today, there are over 300 MW installed in Pennsylvania. 1

    Pennsylvania is moving forward in the solar marketplace, but there is significant potential for solar to continue this growth and transform the electricity generation sector. The benefits of an increased share of solar in the electricity generation sector are enormous…

    The Finding Pennsylvania’s Solar Future planning project brought together expert stakeholders from across sectors to explore whether Pennsylvania has sufficient technical and economic potential to increase in-state solar generation to provide 10 percent of in-state electricity consumption by 2030. Stakeholders explored likely pathways to achieving that target and identified, through modeling, associated economic, environmental, and health impacts.

    Before the Finding Pennsylvania’s Solar Future stakeholder process began, it was clear that Pennsylvania already possessed a unique set of assets that can position the state to take the lead in solar development and maintain its stance as an energy leader…

    With those assets in mind, stakeholders provided input regarding pivotal factors influencing solar PV deployment and associated considerations, risks, and benefits. Several stakeholder workshops were held across the state, with diverse sector participation (FIGURE 1). During each workshop, facilitators engaged stakeholders in breakout sessions for three main workgroups: Markets and Business Models, Policy and Ratemaking, and Operations and Systems Integration. Stakeholders provided feedback within these workgroups as well as during general listening sessions.

    Stakeholder input was supported by a process of modeling and data analysis investigating three primary scenarios to achieve the 10 percent target by 2030: the Reference Scenario, the Solar A Scenario, and the Solar B Scenario.

    The Reference Scenario assumes “business as usual” markets and energy consumption within the state and offers a baseline comparison. Solar A and Solar B Scenarios articulate two contrasting pathways for achieving 10 percent solar energy demand, using the same total energy consumption as in the Reference Scenario (TABLE 1) In the Solar A and B Scenarios, most of the new solar development comes from Grid Scale solar that is connected directly to the transmission and distribution system, rather than behind the customer meter.

    The stakeholder engagement process worked to identify the most impactful and realistic strategies that would move Pennsylvania towards that the target of 10 percent solar by 2030. The stakeholders discovered that the pathway to successfully reaching the target will likely require a suite of strategies:

    1) Cross-cutting (Grid scale and Distributed)

    2) Grid Scale Solar Generation

    3) Distributed Solar Generation

    Their goal was to identify the most impactful effective strategies to maximize Pennsylvania's solar future.

    Cross-Cutting Strategies

    The cross-cutting strategies, such as changes to the Pennsylvania Alternative Energy Portfolio Standard (AEPS) and adoption of carbon pricing, will dramatically impact both grid scale and distributed generation.

    The key to the overall effort was to identify strategies that will bring the project costs of solar to a price point that will encourage the market’s swift adoption of the technology. The price of solar is decreasing globally, and this is projected to continue, although perhaps at a slower pace than in the past decade. While the global supply and demand for solar modules are an important factor on price that the Pennsylvania market will have little influence on, there are several local factors that impact the installed cost for new solar in the state and policies and market conditions that impact the returns on solar investments. Implementing the cross-cutting strategies could shift the price point of solar and increase both grid scale and distributed generation.

    Even if adopting these cross-cutting strategies influence the price point of solar, it is still necessary to consider costs and benefits associated with transforming the electricity generation sector. The modeling process helped guide stakeholder analysis by producing cost information relative to an increased level of solar development.

    Economic cost: The modeling found that over 15 years, the Solar A and Solar B scenarios have average net annual economic costs ranging from $513 million to $613 million. These estimates represent the lifetime costs and savings associated with the solar capacity in each scenario compared to the reference scenario.

    By way of context, Pennsylvania’s annual energy expenditures are roughly $45 billion. Therefore, over the 15-year study period the investments required for the Solar A and Solar B Scenarios are just 1.2 to 1.4 percent above current energy spending.

    Economic and environmental benefit: In addition, the modeling shows that the Solar A and Solar B scenarios both provide net economic benefits in excess of $25 billion from 2018 to 2030, when accounting for environmental externality costs. Further, in both scenarios, economy-wide greenhouse gas emissions decrease by 2-3 percent by 2030.

    Land use: Another important issue identified by the stakeholders is how much land use would be required to achieve that level of solar development for both distributed generation and grid scale. The modeling found grid scale solar would use 89 square miles (56,800 acres) in Solar A Scenario and 124 square miles (79,200 acres) in Solar B Scenario. Roof-top systems are not included in the land use numbers; however, a 2008 study on rooftop solar potential in Pennsylvania found that more there is space for more than 27 GW of solar PV panels on existing rooftops statewide alone, nearly three times the amount needed for the entire 10 percent target.

    To put the acreage into perspective, the required land use to meet the grid scale levels for each scenario represent a negligible fraction (less than three-tenths of 1 percent) of Pennsylvania’s total land area and less than half of the total abandoned mine lands in Pennsylvania. Therefore, it’s clear there is more than sufficient available land to accommodate both scenarios of Grid Scale solar within Pennsylvania and land use strategies can be pursued.

    Jobs. The modeling process estimated job impacts of the solar scenarios using the Jobs and Economic Development Impact (JEDI) model. 7 Combined with the itemized cost for solar installation and maintenance, the JEDI model uses economic input output analysis to provide an estimate of how much of the investment in solar recirculates within Pennsylvania, supporting local businesses and jobs. (TABLE 2).

    Grid Scale Strategies

    As the modeling scenarios discussed above indicate, any significant increase in statewide solar generation is expected to come, in large part, from grid scale deployments of solar. Although not necessarily required to meet the target, the modeling expects 65 to 90 percent of the solar generation to be grid scale.

    While there are cross-cutting issues that reflect on all solar deployment, there are several approaches and considerations that are relevant to only grid scale that may help alleviate some of the hurdles currently holding back grid scale solar development in Pennsylvania.

    Through the Pennsylvania Solar Future planning process, it became clear that grid scale solar will need to maintain a growth rate higher than it has averaged in the past to reach the target. However, other markets around the country have seen sustained growth well above the rates required by the solar scenarios.

    In both solar scenarios, grid scale solar grows faster than distributed solar. This is because Pennsylvania, like other nascent solar markets, has significantly more distributed solar installed today than grid scale. The solar scenarios show quick growth in grid scale largely because that sector has driven the growth in most states with mature solar markets. Under either solar scenario, implementing the strategies above will require accelerated grid scale growth.

    Distributed Generation Strategies

    The modeling scenarios assume distributed solar generation will be responsible for a smaller fraction of the overall deployment than grid scale solar—likely between 10 percent and 35 percent. In order to meet these targets, the distributed generation annual growth rate would need to be sustained at current levels for the next 12 years. Current growth rates from 2013-2017 were 22 percent for residential and 7 percent for commercial solar. The following strategies could help to support and continue the growth seen in recent years and therefore meet the target for distributed generation.

    While the scenarios are dominated by a significant build out of grid scale solar in a manner not yet experienced in Pennsylvania, efforts should also be made to overcome barriers for distributed generation and community solar so Pennsylvanians may maximize the opportunities to develop all solar resources commensurate with broader social, environmental, and economic benefits.

    The strategies contained in the PA Solar Future Plan recognize that with the removal of barriers for all sectors of solar development, the actual achievable solar penetration could far exceed the target of 10 percent by 2030 as is being demonstrated in many states in the region.

    Next Steps

    The Finding Pennsylvania’s Solar Future Plan demonstrates that by implementing strategies that increase solar generation, Pennsylvania will gain significant economic, environmental, and health benefits. Pennsylvania can continue its energy leadership role and advance policies that advance solar energy’s role in the state. We recognize that achieving the 10 percent target by 2030 would be challenging and would take a sustained growth rate in excess of business-as-usual. But this plan challenges the narrative that solar can’t work in Pennsylvania and presents several strategies that can be combined to create many pathways that lead to the 10 percent target, should policy makers commit to that path.

    Going forward, the Pennsylvania’s Solar Future Project Team and stakeholders will continue to discuss these strategies with an eye to implementation details and the keys to achieving market transformation, while minimizing ratepayer cost impacts.

    Finding Pennsylvania’s Solar Future is a project of the Pennsylvania Department of Environmental Protection (DEP) Energy Program’s Office (EPO) with funding from the U.S. Department of Energy Solar Energy Technologies Office. DEP brought together a project team that, along with DEP and the U.S. Department of Energy, included Citizens for Pennsylvania’s Future (PennFuture), The Vermont Energy Investment Corporation (VEIC) and Pennsylvania-based solar subject matter experts (“Facilitators”) Sharon Pillar, Dr. Jeffrey Brownson, Ron Celentano, and Maureen Mulligan. The Project team took significant input from both our committed partners and our robust stakeholder group composed of over 500 members.

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