Report: Utility scale solar to add 3.8 GW by year's end
- In the first half of 2014, utility sized solar installations have grown by 1.1 GW to about 7 GW of total capacity, according to a new GTM Research report. Power purchase contracts reveal the average price of solar is now $50/70 per MGWhr.
- First Solar produced the three biggest installations of the last three months, with 307.5 MW coming online.
- A further 3+ GW is in the process of construction or has been agreed on through power purchase agreements with utilities, with a total of 3.8 GW predicted to come online over the course of the year.
The increase in solar this year has given it a year-on-year growth rate of 32%, which may continue for the next few years. States such as Hawaii have already committed to grow their solar portfolio significantly.
The current flurry of activity has been spurred, according to the report authors, by regulatory commissions' search for a cost effective, alternative fuel source to natural gas as a replacement for coal and nuclear plants. Natural gas prices are volatile and prone to wide fluctuation, while solar power prices are decreasing as the resource is becoming more reliable.
The lowered prices are actually an advantage to the solar market, according to the report. Analyst Cory Honeyman said that "amidst this highly competitive landscape, developers have survived the low-price PPA environment by capitalizing on declining financing costs to eke out attractive returns."