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Responding to the competitive rise of solar and gas: The challenge for wind

matt mooren, Barbara Sands, Zach Pollock and david Cherney | REW.com | 7 december 2015

To read the full piece in REW.com please click here.

The U.S. wind industry’s growth prospects for the next decade will be shaped by its response to the changing market landscape, including emerging factors such as lower electric demand growth and competition on cost from solar and gas generation. Despite the existence of a select few regions where the quality of wind is strong relative to solar (meaning the economics of new wind generation compete favorably with new solar generation), policies at both the U.S. federal and state level have shifted toward a preference for solar generation in many cases, and more specifically distributed solar generation. This new paradigm will require a more sophisticated approach to competing with energy resource alternatives than simply lobbying for an extension of the Production Tax Credit (PTC).

State Policies for Solar

At the state level, there are two primary mechanisms that have accelerated the adoption of solar (in many cases distributed solar) relative to wind generation over the last several years: renewable portfolio standards (RPS) and/or net energy metering (NEM).

Twenty states and the District of Columbia have created an RPS with specific solar and/or distributed generation (DG) provisions. In addition, two states have non-binding goals. Eight of the 20 states have specific requirements for DG, often focusing on distributed solar. A large portion of the U.S. wind industry’s traditional growth has been to meet state RPSs; however, in recent times, the renewable generation that has been entering the markets has increasingly been solar (utility scale more than distributed solar).

 


Matt Mooren, Zach Pollock, Barbara Sands and David Cherney are energy experts at PA Consulting Group

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