Abstract
During the past decade, solar power has experienced transformative price declines, enabling it to grow to supply 1% of U.S. and world electricity. Addressing grid integration challenges, increasing grid flexibility, and further reducing cost will enable even greater potential for solar as an electricity source.
During the past decade, solar power has experienced transformative price declines, enabling it to become a viable electricity source that is supplying 1% of U.S. and world electricity. Further cost reductions are expected to enable substantially greater solar deployment, and new Department of Energy cost targets for utility-scale photovoltaics (PV) and concentrating solar thermal power are $0.03/kW h and $0.05/kW h by 2030, respectively. However, cost reductions are no longer the only significant challenge for PV-addressing grid integration challenges and increasing grid flexibility are critical as the penetration of PV electricity on the grid increases. The development of low cost energy storage is particularly synergistic with low cost PV, as cost declines in each technology are expected to support greater market opportunities for the other.
Similar content being viewed by others
References
Solar Energy Industries Association and GTM Research, U.S. Solar Market Insight 2016 Year in Review (2017).
Energy Information Administration: Electric Power Monthly (February 2017).
International Energy Agency: 2015 Snapshot of Global Photovoltaic Markets (2016).
GTM Research: U.S. PV System Pricing H1: 2017: Breakdowns and Forecasts (2017).
GTM Research: Global Solar Demand Monitor: Q1 2017 Market Trends Update (2017).
Solar Energy Industries Association and GTM Research, U.S. Solar Market Insight 2015 Year in Review (2016).
Haegel N.M., Margolis R., Buonassisi T., Feldman D., Froitzheim A., Garabedian R., Green M., Glunz S., Henning H., Holder B., Kaizuka I., Kroposki B., Matsubara K., Niki S., Sakurai K., Schindler R.A., Tumas W., Weber E.R., Wilson G., Woodhouse M., and Kurtz S.: Terawatt-scale photovoltaics: Trajectories and challenges. Science 356, 141–143 (2017).
Energy Information Administration: Annual Energy Outlook 2007 (2007); Energy Information Administration: Annual Energy Outlook 2011 (2011); Energy Information Administration: Annual Energy Outlook 2014 (2014).
The Energy Information Administration (EIA) projects that solar will supply 5% of U.S. electricity in 2030 and 12% in 2050 in the 2017 World Energy Outlook reference case. Projections using NREL?s Regional Energy Deployment System, which is used elsewhere in this paper, are for solar to supply 5% in 2030 and 17% in 2050.
Energy Information Administration: International Energy Outlook 2017. DOE/EIA-0484 (2017).
Cole W.J., Frew B., Gagnon P., Richards J., Sun Y., Zuboy J., Woodhouse M., and Margolis R.: SunShot 2030 for Photovoltaics (PV): Envisioning a Low-cost PV Future. NREL/TP-6A20-68105 (National Renewable Energy Laboratory, Golden, CO, 2017).
Jones-Albertus R., Feldman D., Fu R., Horowitz K., and Woodhouse M.: Technology advances needed for photovoltaics to achieve widespread grid price parity. Prog. Photovoltaics 24, 1272 (2016).
Eurek K., Cole W., Bielen D.A., Blair N., Cohen S., Frew B., Ho J., Krishnan V., Mai T., and Steinberg D.: Regional Energy Deployment System (ReEDS) Model Documentation: Version 2016. NREL/TP-6A20-67067 (National Renewable Energy Laboratory, Golden, CO, 2016).
Fu R., Feldman D., Margolis R., Woodhouse M., and Ardani K.: U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017. NREL/TP-6A20-68925 (National Renewable Energy Laboratory, Golden, CO, 2017).
The Modified Accelerated Cost Recovery System (MACRS) depreciation benefit allows the initial PV system cost basis to be allocated over a federally-set, 5 year schedule for use as a deduction when calculating taxable income. Because a depreciation expense works to lower taxable income, its value can be calculated by multiplying the owner?s tax rate by the present value of the deduction that is allowed during each year of the depreciation schedule. The value of depreciation can only be realized if the PV system owner has pending tax liabilities of sufficient size, which is one reason why many project developers, non-profits, and government entities partner with tax equity investors.
U.S. Department of Energy (2017): Concentrating solar power could provide the flexibility and reliability the U.S. electric grid needs. Available at: https://energy.gov/eere/articles/concentrating-solar-power-could-provide-flexibility-and-reliability-us-electric-grid (accessed November 3, 2017).
Mills A. and Wiser R.: Changes in the Economic Value of Variable Generation at High Penetration Levels. A Pilot Case Study of California. LBNL-5445E (Lawrence Berkeley National Laboratory, Berkeley, CA, 2012).
Sivaram V. and Kann S.: Solar power needs a more ambitious cost target. Nat. Energy 1, 16036 (2016).
Denholm P.; Clark K., and O’Connell M.: On the Path to SunShot: Emerging Issues and Challenges in Integrating High Levels of Solar into the Electrical Generation and Transmission System. NREL/TP-6A20-65800 (National Renewable Energy Laboratory, Golden, CO, 2016).
Gevorgian V. and O?Neill B.: Advanced Grid-Friendly Controls Demonstration Project for Utility-Scale PV Power Plants. NREL/TP-5D00-65368 (National Renewable Energy Laboratory, Golden, CO, 2016).
Schmidt O., Hawkes A., Gambhir A., and Staell I.: The future cost of electrical energy storage based on experience rates. Nat. Energy 2, 17110 (2017).
Denholm P.; Eichman J., and Margolis R.: Evaluating the Technical and Economic Performance of PV Plus Storage Power Plants. NREL/TP-6A20-68737 (National Renewable Energy Laboratory, Golden, CO, 2017).
Cole W.J., Marcy C., Krishnan V.K., and Margolis R.: Utility-scale lithium-ion storage cost projections for use in capacity expansion models. In Proceedings of the 2016 IEEE North America Power System Meeting (IEEE, Denver, CO, 2016); p. 1.
Feldman D., Margolis R., Denholm P., and Stekli J.: Exploring the Potential Competitiveness of Utility-Scale Photovoltaics Plus Batteries with Concentrating Solar Power, 2015?2030. NREL/TP-6A20-66592 (National Renewable Energy Laboratory, Golden, CO, 2016).
Acknowledgment
We would like to thank Paul Basore for his contributions to the iso-LCOE modeling (Fig. 8).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Jones-Albertus, R., Cole, W., Denholm, P. et al. Solar on the rise: How cost declines and grid integration shape solar’s growth potential in the United States. MRS Energy & Sustainability 5, 3 (2018). https://doi.org/10.1557/mre.2018.4
Received:
Accepted:
Published:
DOI: https://doi.org/10.1557/mre.2018.4