Tuesday, February 10, 2015

Huge California Solar Power PV Plant Goes Online, DOE Says Told You So

on February 09, 2015 at 3:15 PMjewel solar 15U.S. Department of the Interior Sec. Sally Jewell at Desert Sunlight. Photo credit: Tami A. Heilemann.

Desert Sunlight is online and the U.S. Department of Energy has dropped the mic.
The world-record-tying 550-megawatt photovoltaic solar plant in Southern California,formally dedicated on Monday, is the last of the big PV plants supported through the DOE’s loan guarantee program, the one that Republicans love to malign but which keeps showingsolid results.
Not only did the LPO back the country’s first five 100-MW-plus PV plants, but in doing so the program opened the door to a wave of utility-scale PV projects that didn’t require similar public support, the DOE said in a report issued Monday [PDF].

“The initial investments made by LPO built a market that subsequently financed an additional 17 PV projects larger than 100 MW in the United States – all financed without DOE loan guarantee,” the DOE said.
danko doe solar
Source: DOE
Whether it was worth the public investment or not might be debatable, and there are those who fear the impact of these big plants on a fragile desert environment. But there’s no doubting that the loan program accomplished exactly what it was intended to do when it was enacted under President George W. Bush and then pursued with vigor under President Barack Obama.
The DOE acknowledged that the 30 percent solar Investment Tax Credit, extended in 2008 through 2016, had set the stage for the building boom. California’s renewable portfolio standard was driving interest in utility-scale solar, as well – three of the DOE’s Big Five are in California and the other two, in Arizona, send power to Golden State utilities.
It also didn’t hurt when the 2009 stimulus temporarily transformed the ITC into a cash grant, a direct payment to developers once their project was up and running.
Add it all up and, the DOE said, “By 2009, the pipeline for utility-scale PV solar projects had reached more than 6,000 MW in announced projects, including several greater than 100 MW capacity. Project sponsors were prepared to invest equity and had signed long-term agreements with electric utilities to purchase the power, but could not get commercial lenders to provide all of the loans necessary to fully finance construction of the projects.”
Enter the loan program, and watch the building boom unfold. From 22 MW of utility-solar in 2008, “In total, over 8,100 MW of utility-scale PV solar (has) been installed in the United States through the first three quarters of 2014,” the DOE said.
Along the way, the stuff has gotten cheaper. Way cheaper.
“Between 2008 and 2014, the cost of power purchase agreements (PPAs) – effectively the price a utility pays a solar power plant for its energy – for utility-scale PV solar projects has decreased by more than 60%,” the DOE said. “In the first half of 2014, PPA prices ranged between $50 and $70 per megawatt-hour, down from 2008 averages of nearly $175.”
Still, for all the DOE’s bow-taking, there is one unanswered question: What might happen to big solar if the Investment Tax Credit drops from 30 percent to 10 percent come 2017, as the law now holds? The trade group Solar Energy Industries Association is pushing hard to prevent that, suggesting that the decrease would severely crimp growth.
But that view isn’t universal, even among solar advocates. Last month, solar entrepreneur Jigar Shah told Breaking Energy that solar has come far enough that simply changing the ITC to allow programs under construction before the end of 2016 to qualify – and doing that soon, to avoid uncertainty – will be enough to keep the market rolling for years to come.

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