Compared to wind and hydro, utility-scale solar’s footprint remains modest, totaling only 12.5 GW of capacity by the end of 2015. Solar only represented 0.7% (25.6 TWh) of total generation in 2015.
Yet, solar capacity has quadrupled since 2012 and growth will be very strong going forward. Utility-scale solar capacity remains heavily concentrated in a few key states—only three states have more than 1 GW of installed capacity, while 27 states have less than 5 MW. Nearly all of the capacity growth will be comprised of solar photovoltaic (PV). Concentrated solar power (CSP, also known as solar thermal) currently represents only 14% of utility solar capacity and the technology has been plagued by high cost and poor performance, suggesting that additional CSP projects are unlikely.
More than any other energy technology, solar PV costs have fallen dramatically over the past several years, declining ~80% since 2008. Much of the cost reduction has come from falling polysilicon costs. As a result, module costs have experienced corresponding declines. Massive manufacturing capacity expansions in China also helped drive down solar PV costs.
Additional cost improvements are expected going forward, though the magnitude of future reductions is highly uncertain. Declining PV costs have already opened new regions to solar development, but much of the activity remains policy-driven. At the federal level, the extension of the Investment Tax Credit (ITC) through 2020 will have a large impact on project development. Multiple states have also included solar-specific carve-outs in their RPS programs.
EVA tracks utility-scale solar development on a project-by-project basis and generates both long and short-term state-by-state forecasts. EVA’s suite of modeling capabilities allows it to evaluate potential solar development under multiple scenarios. This includes sensitivity runs based on different gas price curves, analyses of proposed policy changes and varying assumptions for solar PV cost/performance improvement.
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