Utilities are becoming increasingly interested in procuring photovoltaic (PV) solar power generation systems, according to a survey sponsored by the Solar Electric Power Association (SEPA).
SEPA and Gartner, Inc. conducted a survey of utilities in Europe and the U.S. to understand their requirements and objectives for integrating PV solar systems into their energy generation portfolios.
They found that PV is one of the leading technologies for near-term
renewable energy for utilities. The also noted that utilities
view onshore wind and biomass as the other key near-term renewable
energy sources.
“System costs have decreased by over 30 percent since 2008. This has lowered the cost of electricity from these systems and improved their competitiveness relative to other renewable energy sources," said Alfonso Velosa, research director at Gartner.
Utilities in Germany clearly lead in the use of PV resources, with 75% of the German utilities surveyed currently using PV as part of their energy resource portfolio. An additional 15% of utilities are considering adding PV to their portfolio within five years. To a large extent, this reflects a decade-long effort by the German government to support renewable energy.
Among U.S. utilities, 44% of those surveyed indicated they had PV solar energy resources and another 33% consider PV solar power generation for use within five years.
The survey found that renewable energy requirements and government requirements are the top two global factors behind the utilities’ decisions to integrate PV supply into their energy portfolios. This is due to the higher costs of PV energy relative to retail and wholesale electricity prices, and, more importantly, the prevalence of various procurement and incentive requirements in different countries.
“Overall, the survey indicated that federal policy and state regulatory levels have strong influence over utility procurement decisions and strategies,” said Mike Taylor, director of research at SEPA. “Although price declines will continue to make PV more competitive with retail and wholesale electricity pricing, it is unlikely that the importance of policy will decline significantly in the near-term.”
“U.S. utilities will continue to have strong influence over compliance options for meeting national or state-level renewable portfolio standard (RPS) obligations, but while EU utilities feel a similar influence from policy, their mechanisms and processes for acquiring PV generation are very different,” Velosa said. “This points to a hazard for the PV industry. If policy does not adapt to the changing pricing environment and other budgetary pressures, there may be a backlash against PV and other renewable energy sources.”
The SEPA report “International Utility Survey: Utility Procurement Influences & Practices," will be available tomorrow (Thursday, August 19) at the link below.
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