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‘Peak Solar’ Hits California

‘Peak Solar’ Hits California thumbnail

Despite the U.S. Congress passing the Consolidated Appropriations Act in December 2015 to slather another $9.3 billion of taxpayer credits on new solar power added to the electrical grid, California solar installments peaked in 2015 and are now headed south.

The extension of the federal Solar Investment Tax Credit (ITC) through 2021 was quietly tucked into 3 pages of the 887-page continuing resolution that allowed Congress to spend about $3.85 trillion this year. The nonpartisan Joint Committee on Taxation estimates that extending solar tax credits will cost taxpayers $9.3 billion.

As a result of massive taxpayer-funded subsidies, solar installations added 9.5 gigawatts of utility-scale power in 2016. That gave solar a nation-leading 40 percent share of all new electrical power capacity, dwarfing the 8.3 gigawatts of new fossil fuel capacity added in 2016, according to the Energy Information Agency.

California dominates solar power in the U.S., with 13,241 mega-watts of capacity, accounting for an overwhelming 44 percent national market share. Due to a marketing blitz by companies like SolarCity, about 71 percent of all solar capacity in the Golden State consists of residential installations.

California sought to continue its leadership in solar installations after Governor Jerry Brown passed SB 350, titled the “Clean Energy and Pollution Reduction Act of 2015.” The bill established 2030 targets to increase retail sales of renewable electricity to 50 percent and a requirement to double the energy efficiency savings in electricity and natural gas end uses by 2030.

With supposed experts claiming a huge amount of solar demand was being undermined due to the expiring of the federal investment tax credit, the renewal was expected to create another California boom. But the number of residential solar installations appears to have peaked in 2015 at 148,000 new installations, and the numbers fell for the first time in a decade, to 140,000 in 2016, according to the state.

A big selling point for renewing the solar investment tax credit was the promise that the cost of producing solar electric power would crash. But according to the California state website, the cost only fell by 2 percent from $.50 a kilowatt in 2015 to about $.49 a kilowatt in 2016.

Compared to natural gas on a national basis, solar costs 50 percent more to produce electricity than natural gas. That does not adjust for the fact that solar electric generation is availability for only an average of eight hours per day. During the other 16 hours a day, which includes peak the period of peak daily residential use during evening hours, the electrical grid must have 100 percent standby fossil fuel power generation capacity.

Another serious downside for solar power is that during sunny days in the spring and fall, when Californians are not using much air conditioning, the daily demand for electricity is low. As a result, the surge of midday solar power is more than the California electric grid can use.

Balancing solar power availability and consumer demand has become a major challenge for the Independent System Operator that manages California’s electric grid for about 30 million people. Nancy Traweek, who directs system operations, recently warned, “It’s constantly solving a constant problem, meaning you’re always trying to balance.”



18 Comments on "‘Peak Solar’ Hits California"

  1. Kenz300 on Mon, 2nd Jan 2017 10:31 am 

    Wind And Solar Now Cheapest Unsubsidized Electricity Sources In The U.S. – First Solar, Inc. (NASDAQ:FSLR) | Seeking Alpha

    World Energy Hits a Turning Point: Solar That’s Cheaper Than Wind – Bloomberg

    Solar cheaper than natural gas and coal.

    Climate Change will be the defining issue of our lives.

  2. Kenz300 on Mon, 2nd Jan 2017 10:34 am 

    How Exxon & The Koch Brothers Have Funded Climate Denial – YouTube

  3. Jerry McManus on Mon, 2nd Jan 2017 10:42 am 

    Cheap money chasing unicorn farts may be coming to an unceremonious end, but the massive hidden subsidies in the form of our vast fossil fueled infrastructure are pretty much guaranteed to continue until the last bitter drop.

    Sorry folks, no free lunches.

  4. JN2 on Mon, 2nd Jan 2017 12:24 pm 

    Unicorn farts? In 2015, renewables produced 56% of electricity in Denmark and 59% in Scotland. The laggard California was 14%.

  5. penury on Mon, 2nd Jan 2017 12:36 pm 

    Kenz300 please re=read the first paragraph, possible more than once until you find out what the hard words mean. After that continue on and maybe this stupidity of unsubsidized can be put to bed permanently.

  6. Baptised on Mon, 2nd Jan 2017 1:50 pm 

    Factor in that US is exporting more and more NG , which means higher prices for US citizens. Also oil is on the price increase and solar looks better long term. I would move to Cali. tomorrow if not for there law enforcement, heck, jay walk and they can kill you and get a handshake from fellow officers.

  7. rockman on Mon, 2nd Jan 2017 4:00 pm 

    So CA solar is slacking off at the same time it’s starting to boom in Texas? While the feds still offer some solar incentives solar is beginning to take off in Texas primarily due to forces in the state and not DC. I just discussed in detail how the ERCOT in Texas has brought alt power investors, consumers, state regulators and utilities together. One of coincidental benefits of spending $7 billion in tax payer monies to expand the grid to provide incentive for private wind investors will be its utilization to expand solar. And not just residential installations but commercial scale projects. Here’s just more to brag about. By the way SolarCity is playing a role in the expansion:

    “To help Texans adopt renewables, the state offers numerous incentives, like property tax rebates and performance-based incentives. While other states have adopted legislation requiring utilities to offer net metering to their residents, utilities in Texas have the option to offer net metering, but are not mandated to offer it.

    When it comes to rebates, however, power suppliers in Texas offer significant rebates to property owners in their service districts, sometimes better rebates than found in other states. And there’s a smorgasbord of utilities in Texas that are offering incentives to their customers.

    When George W. Bush was still the Governor of Texas and before Enron became infamous for its accounting practices, Texas was investing heavily in renewable energy, particularly wind. The investments made it the nation’s leader in wind. However, with the Enron scandal the state’s investment in wind and other renewables experienced a drought.

    More recently, the state has resumed its interest in promoting renewables. As of 2010, it has a renewable portfolio standard, which requires 10,000 megawatts of renewables installed throughout the state by 2025. At least 500 MWs coming from non-wind sources.”

    For more details:

  8. GregT on Mon, 2nd Jan 2017 4:22 pm 

    GW was the governor of Texas? Sadly, that helps to clarify a great deal of my former confusions about the Lone Star state.

  9. rockman on Mon, 2nd Jan 2017 10:11 pm 

    Greg – Two oddities that has helped. First, the gov is not THE most powerful man in the state house. It’s the Lt. Gov that runs seperate from the gov. Essential he controls the agenda. Check the web if you want details. Second, the state legislature meets only every two years. That was supposedly done to limit the damage it can do. LOL.

  10. Simon on Tue, 3rd Jan 2017 7:14 am 

    Given there are 7million homes in CA
    say 80% suitable that gives 5.6 million
    150k as the peak over a decade, this means that approx. 1 million homes have installations, and 1 million more to come, which is about 36%, not bad, but more could be done.
    However, this assumes that the price of Leccy will stay as it is, which it wont, it is only forecast to rise (about 1cent per year) this will be like peak oil, when the economics change there will be a new peak.

    As far as the poor utility providers, well there are paid a capacity charge to ensure they are still available, so no problem.

    Wind is also in the mix, which does work in the evening, and is predictable, so keep going California.

    Also 9 Gw for 9.5 billion is a bargain.

    And Thermal stations are also subsidised, not just renewable


  11. Cloggie on Tue, 3rd Jan 2017 7:31 am 

    Don’t wait for the state, do it yourself:

    There is so much sun in California.

  12. makati1 on Tue, 3rd Jan 2017 7:39 am 

    Better own that home you are putting them on or the bank will own everything when the SHTF. lol

  13. Cloggie on Tue, 3rd Jan 2017 8:56 am 

    Californian home “ownership” 54% and descending:

  14. Simon on Tue, 3rd Jan 2017 9:49 am 

    means my estimate of 36% is actually 72%, not bad at all

  15. GregT on Tue, 3rd Jan 2017 10:28 am 

    “There is so much sun in California.”

    But not so much water. No problem though, with solar they can desalinate sea water, and keep growing the population forever.

    Humans sure is smart. 🙂

  16. peakyeast on Tue, 3rd Jan 2017 11:49 am 

    Rate of homeownership… No – rate of people living on loaned money with a damocles sword hanging over their heads.

    And not only that: They include trailers, apartments, and probably even tents and large cardboardboxes 😉 j/k in houseownership

    IMO Real houseownership is thus way below 20%.

  17. Simon on Tue, 3rd Jan 2017 12:30 pm 

    sorry the figures I got were from the Gov. of California, and had RV’s broken out.

    For the sake of this discussion it is not really relevant whether people have debts or a mortgage (as long as they still have credit left to get a solar installation)

  18. aidan on Tue, 3rd Jan 2017 12:42 pm 

    er….do you really consider this article to be from a credble source? Just asking.

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