DOE says solar growth demands a different kind of grid

By David Ferris | 05/19/2016 07:45 AM EDT

A flurry of reports issued by the Department of Energy yesterday charted a road map for solar power for the next five-plus years. One of its main takeaways: If solar is to continue its march toward being a cheap, ubiquitous power source, the electric grid will have to adapt in fundamental ways.

A flurry of reports issued by the Department of Energy yesterday charted a road map for solar power for the next five-plus years. One of its main takeaways: If solar is to continue its march toward being a cheap, ubiquitous power source, the electric grid will have to adapt in fundamental ways.

The occasion was the five-year anniversary of DOE’s SunShot Initiative, which set out to lower the cost of solar power to 6 cents per kilowatt-hour by 2020. Solar power is the fastest-growing source of power on the electric grid, and President Obama’s Energy Department has placed a high priority on using sun-derived energy to lower U.S. carbon emissions and head off the effects of climate change.

SunShot’s goal is 70 percent achieved, the reports said. In a turbulent five-year period, the amount of solar power has increased tenfold and costs have dropped by up to 65 percent. But keeping the momentum going will require the grid to coordinate like never before, as well as demand innovations in technology and finance, and aggressive efforts by domestic manufacturers to wrest momentum away from China.


The Energy Department’s conclusions were many and varied:

  • DOE for the first time attempted to quantify the environmental benefits of the solar that the United States has installed so far, and that its continued growth could offer through midcentury. It concluded that by 2050, inexpensive solar power could lower carbon emissions in the power sector by 10 percent and save hundreds of billions of dollars in health and environmental costs, as well as trillions of gallons of water.
  • The factors that made China the planet’s dominant solar manufacturer are changing, and the United States has the opportunity to retake the lead in certain types of photovoltaic technology and in concentrated solar power. Many opportunities exist to invent panels that produce more power and to manufacture more cheaply.
  • Widespread use of smart inverters, which convert electricity from direct to alternating current while also gathering useful data and communicating it, could have a dramatic impact on the grid’s ability to absorb new solar power. With traditional inverters, the existing grid could accommodate at maximum 170 gigawatts (GW) of solar power; with smart inverters that figure more than doubles, to 350 GW.
  • DOE dove into the controversial issue of net metering, which entails taking the excess electricity produced by a solar system and selling it back to the grid at full retail rates. It has become a bone of contention between solar advocates and some utilities that view it as unsustainable. The department estimated that if all net metering were discontinued today, solar power deployment would be 20 percent less compared to keeping today’s net-metering rules in place. By contrast, if net metering were immediately available everywhere and continued through 2050, solar deployment would rise 30 percent higher than today’s rules allow.
  • Innovations in financing could lower the price of solar power by 30 to 60 percent, the reports said, and result in solar systems far easier to pay for than today’s. Someday, raising money for a utility-scale solar farm could resemble the financing for how a natural gas turbine is financed, a commercial system could be as straightforward as a residential system is today, and a residential system could be as simple as buying a refrigerator, with the option of no money down and attractive financing options.
  • The electrical distribution system has seen a sixfold increase in solar power, to more than 11 GW by the end of 2015, and more is on the way as up to 60 percent of new solar power installed through 2020 will be on distributed networks. The phenomenon "has both highlighted challenges and demonstrated many successful examples of integrating higher penetration levels than previously thought possible," the report said. The waxing presence of solar could make some components wear down quicker while extending the life of others and make planning more difficult while also making the network more efficient.
  • If solar power continues to drop in price on the trajectory that DOE wants, the country’s grid will have 330 GW of solar deployed by 2030, and Americans will have 335,000 solar-related jobs. In 2015, the U.S. solar job count stood at almost 209,000 (EnergyWire, Jan. 12).

Grid needs ‘unprecedented coordination’

In the five years since the SunShot program started, the precipitous decline in solar costs can be traced to the falling price of solar modules, as well as innovations in other parts of the solar system, from inverters to racks to the "soft costs" of selling and interconnecting a solar array. But, the report noted, the rate of decline is slowing.

What will take its place?

The authors said that part of the answer lies with those who regulate and design the electric grid. More affordable solar power "will require unprecedented coordination of the historically separate distribution and transmission systems along with incorporation of energy storage and ‘virtual storage,’ which exploits improved management of electric vehicle charging, building energy systems, and other large loads," the report said.

The report said that electric service, like politics, is local. It depends on who is using the electrons. "Some kWhs of solar electricity may be more useful than others — and more useful to some stakeholders than to others — which can have profound implications for cost," the report said.

To explore the possibilities, the report took the example of California, a sunny state where solar has burrowed deeper into the energy system than anywhere on the mainland. Today’s California grid — described in the report as one of "limited flexibility" — would suffer if the amount of solar rose from 10 percent to 20 percent.

On sunny days, the amount of solar power could exceed what the grid could use while still employing other sources of power, like natural-gas-fired power plants, that must provide a certain baseline of energy. The result could be what is called curtailment — shutting down solar power to the grid. Widespread curtailment could raise the price per kilowatt-hour of solar from 6 cents to 11 cents, the report estimated.

"However," the report noted, "this loss of value could be stemmed by increasing system flexibility via enhanced control of variable-generation resources, added energy storage, and the ability to motivate more electricity consumers to shift consumption to lower-demand periods." These changes — ones that California and other utilities are struggling to implement — could maintain a low price of solar while allowing for a solar penetration rate of 25 percent.

Solar’s environmental upside

One groundbreaking report released yesterday tabulated what the benefits are to America’s air and water from solar power, calculating how much it has helped so far and what difference it could make by 2050.

The solar installed by the end of 2014 — 20 gigawatts — has reduced carbon emissions each year by 17 million tons, sulfur dioxide and nitrogen oxide by 10,000 tons each and reduced water consumption by 7.6 billion gallons, the report said. "The existing fleet of solar power plants is already offering a down-payment towards those benefits," the report said.

If solar produced 27 percent of electricity by 2050, the life-cycle carbon emissions of the power sector could drop by 10 percent, the report said. By taking into consideration solar’s tempering of the effects of climate change for the environment and for people, DOE priced the value of that future solar power at $259 billion. If those social and environmental savings accrued to the grid’s bottom line, solar power would be 2.2 cents cheaper.

Solar power would substitute for coal and natural gas power plants with corresponding reductions of sulfur dioxide, nitrous oxides and fine particulates in the air. Those could save $167 billion in health and environmental costs, avoid up to 59,000 premature deaths and lower the cost of solar by 1.4 cents, the report said.

DOE also tabulated water savings. By 2050, greater use of solar could cause the power sector to avoid the withdrawal of 46 trillion gallons of water, since traditional power plants use large quantities of water for cooling and photovoltaic solar power uses none. The power sector would consume 5 trillion fewer gallons of water total, or 9 percent of its total, with the greatest reductions found in the states that are driest and most prone to drought.

That would equal the water consumption of 1.3 million homes, the report said.