Further substantiating the Solar Electric Power Association's prediction that electric utilities will quickly become the largest and most important customer for the solar industry, Pacific Gas and Electric Company (PG and E) has announced plans for a 500 megawatt (MW) photovoltaic (PV) initiative.
The program encompasses 250 MW of utility-owned PV generation and an additional 250 MW of PV generation to be built and owned by independent developers under a streamlined regulatory process.
"According to nationwide data collected by the Solar Electric Power Association (SEPA), as of the end of 2007 more than fifty percent of all photovoltaic systems in the country were located in PG and E's service territory," said Julia Hamm, SEPA executive director.
"PG and E continues to demonstrate its leadership role with the announcement of this new 500 MW program, as well as last year's announcement of plans to purchase the output of two PV plants totaling 800 MW."
PG and E was the number one ranked utility in SEPA's 2007 Top Ten Utility Solar Integration Rankings for the most solar electric capacity on the customer side of the meter.
In addition, the utility received the SEPA Award for Solar Portfolio Leadership in both 2007 and 2008 for its on-going efforts to diversify its electricity portfolio with a suite of solar programs.
Half of the 500 MWs that are part of this new initiative will come from mid-sized PV projects owned by PG and E, typically one MW to 20 MW in size and mounted on the ground or rooftops. "Utility companies around the U.S. are exploring ownership of solar projects now that they have access to the thirty percent investment tax credit, making solar energy much closer in cost to other resource options," said Hamm.
"A number of utilities have announced programs for utility-owned solar projects in the past six to eight months, including Southern California Edison, San Diego Gas and Electric, Duke Energy, and most recently, PSE and G in New Jersey. We expect many other similar programs to emerge in the coming months."
The second half of PG and E's new initiative includes projects developed by independent parties. PG and E will offer a standard contract and pricing derived from the utility's own costs, thus simplifying the procurement process and streamlining application reviews.
A recent SEPA study, Utility Procurement Study: Solar Electricity in the Utility Market, identified improvements that could be made to the utility solar procurement process by both the utility procurer and the solar industry proposer. "It's refreshing to see PG and E take a simplified procurement approach that ultimately helps drive down the non-technology costs related to solar projects," said Hamm.
According to PG and E, the plan is being submitted to the California Public Utilities Commission for approval, which could come later this year.
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