Move over shale. The sun is now the fastest growing source of U.S. electricity.
Solar power capacity in the U.S. has jumped 20-fold since 2008 as companies including Apple Inc. use it to reduce their carbon footprint. Rooftop panels are sprouting on homes from suburban New York to Phoenix, driven by suppliers such as SolarCity Corp. and NRG Energy Inc.
Giant farms of photovoltaic panels, including Warren
Buffett’s Topaz array in California, are changing power flows in the electrical grid, challenging hydro and conventional generators and creating negative prices on sunny days. The surge comes after shale drilling opened new supplies of natural gas, contributing to the 47 percent drop in oil since June.
“Solar is the new shale,” Michael Blaha, principal
analyst of North American power at Wood Mackenzie Ltd. in Houston, said April 8. “Shale has lowered cost and enabled lower natural gas prices. Solar will lower costs for electricity.”
Solar capacity surged 30 percent in 2014 to more than 20 gigawatts and will more than double by the end of 2016, according to the Washington-based Solar Energy Industries Association. That’s enough to power 7.6 million U.S. homes, up from 360,000 in 2009. The biggest gains will be in California, Arizona, Texas, Georgia, New York and New Jersey.
Even with the rapid growth, solar still accounts for less
than 1 percent of total U.S. power production, behind coal, natural gas, oil, nuclear and hydroelectric, according to the government’s Energy Information Administration. Because output suffers on cloudy or hazy days, grid operators have to keep conventional plants on standby.
On April 23
, spot wholesale prices at Southern California’s SP15 hub, which includes Los Angeles and San Diego, averaged minus $60.94 a megawatt-hour for the 10 hours from 8 a.m.
, with solar accounting for as much as 23 percent of power generation in the hour ended at noon
. The negative price meant that the seller, wanting to keep its generator running, paid the buyer to take the power.
"I was here before we broke ground and seeing it then and now amazes me at how quickly we were able to build the project and coexist with the environment and generate 550 megawatts of green power,” Gary Hood, project manager for Topaz, about 250 miles southeast of San Francisco, said as he showed a visitor around.
Berkshire is already producing power at Solar Star, which will be fully operational in the third quarter. Apple said in February it is investing $850 million in a plant that First Solar Inc. is building nearby.
“We will see renewables increasingly make up part of the resources stack just because it makes economic sense,” Jonathan Mir, head of North American power and energy at Lazard Freres & Co. LLC in New York, said by phone May 13.
“Appreciating that there are important qualitative
differences between non-renewables and renewables, I don’t think people can simply say with a straight face any more that renewables are more expensive,” he said.