When it comes to renewable energy, utility-scale solar has become a buzzword. But, what does utility-scale solar actually mean and how is it different from commercial? In this blog, we will answer that question as well as dive deeper into how utility-scale solar works and what are its benefits.
What is utility-scale solar?
It’s important to realize that there isn’t a commonly accepted definition that sums up “utility-scale.” A google search reveals a wide range of definitions from 25 kilowatts to greater than 50 megawatts.
The Solar Energy Industries Association, the leading trade group for solar developers, defines utility-scale solar as greater than 1 megawatt. But, different developers such as SunPower sell solar modules at a minimum size of 1.5 megawatts. One aspect of utility solar that can be summed up is that it is larger than commercial and can be used to provide power to larger facilities.
Another aspect of utility-scale solar facilities is that it generates solar power to feed into the grid, supplying a utility with energy. In addition, almost every utility-scale solar facility has a Power Purchase Agreement (PPA) with a utility, guaranteeing a market for its energy for a fixed term of time.
What is a power purchase agreement?
According to Solar Energy Industries Association, a solar PPA is essentially a financial agreement where a developer arranges for the design, permitting, financing, and installation of a solar energy system on a customer’s property at little to no cost. The developer then sells the power generated to the host customer at a fixed rate that is typically lower than the local utility’s retail rate.
A PPA is a desired agreement because this lower electricity price serves to offset the customer’s purchase of electricity from the grid while the developer receives the income from these sales of electricity as well as any tax credits and other incentives generated from the system.
Growth of utility-scale solar
According to Electricity Markets and Policy, the utility-scale solar sector has led the overall U.S. solar market in terms of installed capacity since 2012. In 2018, the utility-scale sector accounted for nearly 60% of all new solar capacity and is expected to maintain its market-leading position for at least another six years. Now, more than three-quarters of all states have at least one or more utility-scale solar projects.
How does utility-scale solar work?
As said before, utility-scale solar harnesses the same solar technology that is used in commercial projects, but on a much larger scale. Also, the focus is supplying power for utility companies and in certain cases large corporations like Apple or Walmart. Instead of using the power generated for a one-off facility like in commercial applications, utility-scale instead sells power directly to the electric grid. For more information on this, check out our product page.
Benefits of utility-scale solar
1. Stabilizes electric prices and keeps them low over time
The biggest use case for utility-scale is to stabilize electric prices over longer periods of time (10 to 30 years or more). The power generated from solar is far more predictable than fossil fuel costs which fluctuate frequently. It’s a triple threat of offering great economics, grid reliability, and sustainability benefits.
2. Can be paired with battery storage
Adding battery storage is one way to increase the value of solar. Utility-scale solar can be combined with battery storage to store all generated power for distribution later on. This means that none of the power generated is wasted.
3. Bifacial solar can be installed on a utility-scale project
For situations where less space is available, levels of power production that match utility-scale solar can still be achieved with bifacial solar panels. This technology leaves the solar cells in the panels exposed on both sides to collect reflected sunlight in addition to direct light. Some configurations even follow the sun. The result is that fewer panels are needed for greater output. Click here to learn more about bifacial solar panels.
For more information
If your company or non-profit is wanting to maximize your energy efficiency or you are interested in utility-scale solar, contact us!
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