(Image credit: Facebook)
Solar is to leapfrog wind to become the undisputed top renewable energy source for US corporates greening their supply through 2030, according to Wood Mackenzie and US wind body AWEA.
In a report unveiled this week, both organisations said a mix of political and economic factors could see Fortune 1000 firms snap up 85GW worth of clean energy supply in the years to 2030, with 2018’s record annual purchases of 6GW set to accelerate even further.
Coupled with cost declines and incentives such as investment tax credits (ITC), the “failure” of US federal policy – including Donald Trump’s move to axe his predecessor Barack Obama’s Clean Energy Plan – has galvanised corporates’ solar and wind agenda, the analysis said.
According to the report, the 3.9GW in corporate wind purchases expected in 2019 will continue to beat solar’s 1.3GW. However, the document said, solar could jump ahead in 2021 and open a major gap through 2030, hitting annual purchases of 6.6GW-12.54GW over wind’s less-than-2GW.
Wind, the analysis noted, could be hindered by the sometimes worse fit between its diurnal patterns and peak power demands. Energy storage could help offset wind’s “boom-bust” cycles but the former currently favours solar’s ITC access, smaller sizes and more predictable generation profile, the study added.
According to Wood Mackenzie and AWEA, solar’s likely leadership does not mean its journey to corporate PPA favourite will be challenge-free. The industry might have weathered US module tariffs to date but could be “tested” – and lose market share – if these policies are maintained and the planned ITC phase-out goes ahead, the organisations said.
Facebook, Google and Amazon lead purchases to 2018
The new analysis singles out the top US corporate renewable proponents driving purchases to date. Ten firms alone account for a 62.3% market share in MW terms, led by Facebook (24 solar and wind PPAs, 14.1% share), Google (15, 13.7%) and Amazon (14, 7.3%).
The report’s top three contrasts slightly to the PV-only figures released by US solar body SEIA in mid-July, which ranked Apple (close to 400MW of 7GW installed to date), Amazon (close to 350MW) and Target (close to 250MW) as the leading three solar buyers.
Wood Mackenzie’s and AWEA’s belief that renewable corporate PPAs will soar is underpinned, in part, by the political tailwinds building as the US heads to presidential elections next year. Growth estimates, they noted, reflect climate change’s emergence as a key issue of recent Democratic candidate debates.
The report acknowledged the various barriers looming over long-term PPA momentum in the US. Legislative moves to scrap incentive schemes is a key challenge, as is the lack of standardised contracts able to bring down the significant costs of PPA negotiations.
Utility green tariffs, the document pointed out, could prove an ally for smaller corporate offtakers forced to accept less attractive PPA conditions to reflect their higher credit risks. As PV Tech has noted this year, interest in the utility space – particularly for solar-plus-storage – is on the rise.
See here for more information on Wood Mackenzie's and AWEA's latest joint report
US solar prospects amid alliances with top corporates and the energy storage sector will take centre stage at Solar Media's Solar & Storage Finance USA, to be held in New York on 29-30 October 2019
The USA solar pipeline hit 9.8 GW in August 2019, according to market analysts, Wood Mackenzie so what does this mean for the solar sector moving forward? Are module shipments constrained? Have manufacturers raised prices for late-comers? What impact will this have on 2020 projects and what can we expect for the ITC negotiations? These questions and more will be discussed in this informative, free webinar. - With almost 10 GW of solar pipeline, how is this affecting the supply chain and cost for panels? - How likely is it that the ITC will be renewed, what trends are emerging in terms of beating the step down? - How helpful are emerging trends and technologies (e.g. bifacial panels, floating solar, data aggregation and management) in helping to beat the ITC step down? - Trade wars: what impact did section 201 have on the market, and what could we expect moving forward This webinar acts as a primer for the Solar & Storage Finance Summit which takes place on 29 & 30 October in New York City.
Now in its sixth successful year, Solar & Storage Finance USA is the only event which looks at raising capital for solar, storage and collocated solar and storage projects in the USA. The conference will help delegates understand how providers are evolving propositions for storage and how they can access capital for standalone solar or storage, and co-located projects. Meet debt providers, funders, utilities, corporate off takers and blue chip energy firms with capital to invest and developers with credible pipelines.