What Will It Take for Solar to Hit 44GW by 2020?


Solar energy accounts for less than 1 percent of the U.S. electricity sources, but $100 billion of private investment and continual government subsidies could push that to 4.3 percent by 2020, according to a report out today from Bloomberg New Energy Finance (BNEF).

Generating capacity at solar projects ranging from residential rooftop systems to centralized solar power plants could jump to 44 gigawatts by 2020, from just 1.4 gigawatts today, according to the market research firm’s new report. These figures include electricity from installations that use solar panels as well as concentrating solar thermal technologies, which produce steam to run generators by using mirrors to concentrate the sunlight onto fluid-carrying containers.

Today’s forecast comes at a time when U.S. venture capital investments in solar have dropped. Dow Jones VentureSource reported Monday that investors pumped $150.1 million into 10 deals in the third quarter, down from $296.9 million in six deals in the same quarter in 2009. But the solar investments for the first three quarters this year have reached $891.2 million, surpassing the $712 million for the entire 2009.

The solar industry will need taxpayers’ help, including rebates and tax credits, for at least three more years in order to boost solar energy demand significantly, BNEF said. That’s mainly because solar electricity remains expensive, even though prices for solar panels have dropped by more than half in the last two years. Crystalline silicon solar panel manufacturers are delivering their products for around $2.10-$2.20 per watt, said Jenny Chase, manager of BNEF’s Solar Insight Service.

Without government subsidies, solar electricity’s generation cost is just shy of $0.20 per kilowatt-hour — almost four times the cost of generating electricity from coal and at least twice as expensive as onshore wind energy, BNEF said.

Generating capacity from solar panels could reach 30 gigawatts by 2020, according to BNEF, while solar-thermal technologies could reach 14 gigawatts of generating capacity by then. Solar-panel installations on company properties, as opposed to residential and utility projects, will account for about half of the new systems from now to 2020, BNEF said. Residential systems will make up 25 percent of the new deployment during the same time. Installations where electricity is generated and used at the same corporate site offer better investment returns than utility-scale solar projects, because the owners end up buying less electricity at retail prices.

Many states have set mandates for renewable energy consumption, and now offer rewards for businesses and consumers who install solar energy systems. The federal government has doled out billions of dollars in grants and loans to solar energy equipment manufacturers and power plant developers in the past two years, thanks largely to the Recovery Act. The solar industry is lobbying to extend some of the stimulus programs, though it could find itself in a tough fight if Republicans win more control of Congress in next week’s elections.

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Photo courtesy of Jeremy Levine Design

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