US utility-scale market spurred by more than mandated goals - GTM

The report notes that the US will install more than 6GW of non-RPS utility solar in 2016. Image: Oregon Department of Transportation / Flickr

According to a new report from GTM Research, over half of new US utility-scale solar in 2016 will be developed outside of commitments to hit state-mandated renewable energy thresholds.

The report, titled, "The NextWave of U.S. Utility Solar: Procurement beyond the RPS", notes that legislated renewable energy targets in 36 US states and Washington D.C. — the “renewable portfolio standards" (RPS) — were the primary sparkplug for the utility PV installed through 2015, accounting for 61% of installations.

But 2016 will mark a tipping point, with 52% of all utility-scale solar beginning operations outside of the RPS. The report adds that the US will install more than 6GW of non-RPS utility solar in 2016.

According to the report, the two main factors spurring this growth are the dropping costs of solar and the fact that utility-scale arrays are fixed in with multi-year pricing deals — providing stability over natural gas prices.

Colin Smith, lead author of the report and solar analyst with GTM Research, said: “The wheels are in motion for a historic year for the utility-scale PV market. Utilities are embracing solar and voluntarily procuring vast amounts of utility-scale PV outside of RPS obligations.”

With the extension of the federal investment tax credit (ITC), the ceiling on competitive PPA pricing will drop below US$60 per megawatt-hour. Voluntary procurement by smaller-scale utilities — as well as the retail customer acquisition of centralized PV — are expected to help grow the expanding share of the utility PV market.

Smith added: “Corporations are diving into solar headfirst with entities like Amazon, Google, Kaiser Permanente, and Cisco powering their facilities with off-site solar. We already have a 2GW pipeline and expect that to be one of the fastest growing opportunities for US solar in the next few years."

The report also notes that California, Georgia, North Carolina, Texas and Utah are the leading state markets for non-RPS projects. 

Tags: gtm research, us solar, utility-scale solar, renewable portfolio standards

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