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American Utility Companies Taking the Solar Plunge
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By Jeremy Baum

A new age in technology has Americans relying on the grid in record numbers. In fact, according to the US Energy Information Administration, Americans used almost 98 quadrillion BTU which is roughly 18 percent of the world’s total energy consumption. While it’s no secret that fossil fuels still dominate the energy production market, the rising cost of non-renewables over the past 50 years has some of the largest individual energy industry players looking in another direction. Capitalizing on the renewable energy trend, corporate utility providers have begun turning to solar power to break their dependence on oil and gas and, evidently, help their bottom line in the process.

 

The relationship between contemporary solar technology trends combined with utility investment decisions are propelling the largest solar infrastructure increase in U.S. history. According to the Solar Market Insight Report 2016 Q4 produced by the Solar Energy Industries Association and GTM Research, most of the new demand for solar has come from Fortune 500 customers with “aggressive, near-term renewable energy procurement targets.” This accounts for a fourfold increase in wholesale solar growth over 2015.

 

 The influx in solar growth is related to the opportunities provided by Federal Investment Tax Credit. Starting in 2006, these subsidies have spurred upticks in solar adoption across consumer and commercial industry. The Federal Investment Tax Credit provides a 30 percent cost credit to corporations who begin construction on solar projects before 2019, which gradually lessens to 10 percent for those started before 2023. Commercial utility companies recognized the program’s merits and have been taking advantage. According to the Solar Market Insight Report 2016 Q4, of all solar installations in the second half of 2016, utility-backed large scale production accounted for 3.2 Gigawatts, or 77 percent, of all additional solar capacity. Utility backing has driven the new installation completion rate to the highest it has been since the beginning of industrial solar technology.

 

 Even without the hefty tax credit, the sustained momentum provided by an expanding infrastructure will keep the existing solar installations and their associated jobs intact. The Q4 Solar Market Insight Report 2016 estimates 400,000 American jobs and $140 billion in economic activity will be created by the time the final credit expires in 2023.

 

The Federal Investment Tax Credit has traditionally been the driving force behind utility solar installations, it is the perceived social benefit that has American citizens asking for more. In 2015, a homeowner survey conducted by Zogby Analytics in partnership with Clean Edge and Solar City, concluded that 87 percent of citizens support the advance of renewable energy, while 74 percent advocate for continued federal subsidies to decrease the upfront cost of new solar installations.

 

Solar energy may face a long road to permanently overtake fossil fuels, but it has already cemented its place in the energy community as one of the premier candidates. With overwhelming public support and true market momentum, solar energy’s increasing presence will significantly alter the landscape of energy production for years to come.

Jeremy Baum is a Systems Analyst with Accenture and serves as an ambassador to the D.C. Metro Eco-Team.


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