Forecasting is an inherently challenging matter, particularly for a fast-growing energy source like solar.
The challenges inherent in this were reflected in the U.S. Department of Energy – Electricity Information Administration’s (EIA) Short Term Energy Outlook (STEO) for August 2018 , which was released earlier this week and which includes the latest estimates of U.S. solar deployment and generation.
For the August edition of the report EIA has dramatically reduced its expectations for utility-scale deployment from 11.4 GW-AC to only 6.33 GW in 2019, which it attributes to changes in incoming data from its Annual Electric Generator survey (EIA-860). STEO is predicting another 3.94 GW-AC of residential, commercial and industrial solar will come online over the course of 2019, to bring the total to 10.27 GW.
This represents 7% growth on the 9.58 GW-AC that the organization estimates will come online by the end of this year. When AC/DC ratios are accounted for, this also appears to be significantly more than the 11 GW-DC that GTM Research is forecasting for 2019. This is an odd development, given that EIA has long been criticized for underestimating solar market growth.
The exact difference between these forecasts is hard to say. GTM Research uses 1.3/1 as an average DC/AC ratio for utility-scale projects, and 1.15/1 for distributed. However, pv magazine Correspondent John Weaver estimates that DC/AC ratios are moving more towards 1.5/1 in the utility-scale segment, and even higher as more storage comes online.
EIA readily admits the difficulties in forecasting future solar growth. “Forecasting future capacity and generation from solar, which is one of the fastest growing sources of electricity, can be challenging and involves quite a bit of uncertainty,” Tyler Hodge, who works on the STEO for EIA, told pv magazine.
As for generation, EIA’s forecast points to another important detail in terms of what the organization expects for market conditions in 2019. The agency predicts that solar generation will grow 23% this year to 260 gigawatt-hours (GWh) per day (on average), representing around 2.4% of daily demand. The EIA then expects solar generation to only grow 12% in 2019 to 290 GWh/day, even with a larger amount of solar being deployed.
One nuance of the slowdown in 2019 solar generation growth comes from the EIA’s Hodge stating that he expects 60% of the solar capacity deployed in 2019 to come online in December. This would make for a very uneven market during the first 11 months.
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I can only speak to the market in Utah. Over the last 4 1/2 years, we have only experienced one year of what we would consider a solar market without any outside influences. Other than that, we have always had to deal with artificial market scares projected by our state’s utility company.
Most of these attacks focused on roof-top solar. But they also introduced an overly inflated rate several years ago on large-scale solar farms gaining access to transmission lines. which greatly increased the cost of that solar kilowatt hour.
But I have been following what has been happening in other states. What is now happening in Michigan, happened in Utah 4 years ago, i.e. separate rate/connection fee for residential solar, along with efforts to undermine the true value of solar with one-year snapshot studies. And the list goes on.
It’s nonsensical that we have a federal tax credit, which is intended to help establish the roof-top solar industry, and then have it undermined at the state-level with attacks by local utility companies.
What we really need is net metering policy/legislation on a federal level in order to prevent these constantly reoccurring assaults on solar on a state-by-state level. A great place to start would be an independent study regarding the true value of a clean, solar kilowatt hour on a federal level, that all states and utilities would have to recognize.
And two topics that I believe could also be addressed with federal policy, would be net metering topics, such as virtual net metering and similar legislation like Nevada’s Solar Bill of Rights. Until then, the solar market will have to continue to operate on a constantly moving floor. And that’s not good for any industry to establish its footing!
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