Solar power has become a key element in the global drive to prioritize a more sustainable future through the adoption of renewable energy. Governments across the world are setting transition targets and providing incentives for cleaner energy sources, which will continue to propel the solar energy industry’s growth.
Advancements in technology, the development of more efficient systems, and an increased familiarity with the benefits of solar power are some of the biggest drivers of the industry. Here are some of the trends emerging in solar power, which are expected to contribute to the industry’s development.
Affordability Meets Accessibility
The U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) reports that solar energy costs steadily decreased from 2010 – 2020, making it a more affordable and viable energy source to replace fossil fuels. The cost of solar declined across all system types: by 64% for residential, by 69% for commercial-rooftop, and by 82% for utility-scale. These reductions have been driven largely by PV module costs, as they have become cheaper and more efficient. However, soft costs, such as permitting, development costs, and installation labor, have remained persistent.
NREL models the installed cost of these systems using
More recent cost benchmark research from DOE’s National Renewable Energy Laboratory (NREL) reveals that from 2021-23, utility-scale PV costs slightly increased.
Analysts note in the report that in recent years, higher inverter, labor, and electrical balances of systems (EBOS) costs more than offset the trends of lower costs for modules, structural balance of system (SBOS), and other soft costs.
“The costs of network upgrades needed to meet interconnection requirements have risen rapidly as the number of projects in the interconnection queue has increased,” said the report’s lead author, Vignesh Ramasamy. “Including network upgrade costs is one way we improved our model this year, and those costs account for much of the increase in EBOS costs compared with last year.”
The report demonstrates that despite the recent cost increases, the installed cost in $ / watt for utility PV is still lower than for residential PV.
Puerto Rico
The data in the report is based on U.S. national averages but it reflects the trends seen in Puerto Rico, where overall costs are higher.
Governments and industry experts have taken note of solar energy’s overall increasing affordability and reliability, especially in places like Puerto Rico where the power grid is isolated and worryingly reliant on imported fossil fuels.
To address the state of the power grid and the increased threat of storms fueled by climate change, Puerto Rico enacted an energy public policy in 2019 with the ultimate goal of becoming 100% reliant on renewable energy sources by 2050. In 2021, the Puerto Rico Electric Power Authority launched a series of Requests for Proposals for utility scale renewable energy and battery storage resources.
Infinigen Renewables is one of the companies helping Puerto Rico make great strides toward its renewable energy goals. Since 2015 and 2016, the company has operated two of the island’s largest solar farms, Horizon and Oriana, and is now actively looking to add capacity to its portfolio. According to Infinigen CEO Leslie Hufstetler, the solar industry’s growth in popularity and affordability have made this a more realistic goal.
“What this means is that more people will have access to such power alternatives as we expand our footprint,” Hufstetler said. “That is welcomed news for the electric system in Puerto Rico as a whole, as well as for those who suffered the consequences of unreliable energy sources in the past.”
Utiity-scale solar farms are installations where the energy generated is sold to utility companies rather than directly to residential and commercial customers. Because these projects are larger, they benefit from economies of scale, which enables project owners to sell their energy generation to utility companies for less, especially when compared to the cost of fossil fuel sources, which are often subject to high price fluctuations.
Hufstetler noted accessibility and affordability are appealing aspects of solar energy, but neither would have a significant impact without a high level of reliability, especially in times of natural disaster. In a study conducted by DOE’s National Renewable Energy Laboratory (NREL), researchers looked at 54,500 panels that had been installed across the United States between 2000 and 2015. They found the failure rate of those panels was just 0.05%.
“As the movement strengthens to transition Puerto Rico’s energy supply to more renewable sources, supported by more advanced technology, it is a reasonable assumption that that percentage would drop even further,” Hufstetler said. “Infinigen is committed to continue our work to improve the electric systems for Puerto Rico.”