Are Solar Farms Declining in the United States?
- February 19, 2015
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When the large solar farm outside of Las Vegas opened up called Ivanpah, there were many that said that these types of solar farms, including both panels and thermal farms, would soon become irrelevant in the United States. Just last week in late January of 2015, there was another large solar farm that opened up and turned on in California called Mojave Solar, built by Abengoa. So are solar farms really declining in the United States? Most say yes, large solar farm projects will disappear in the US due to the changing solar thermal and panel incentives and the instability of economics.
Large solar panel farms usually consist of rows and rows of solar panels that directly convert the sun’s energy into electricity, and are usually the most popular when it comes to solar farms. Solar thermal farms, on the other hand, use mirrors to concentrate the sunlight to heat liquid that produces steam, thus making electricity from a turbine using the heat of the sun. Most of these projects can provide enough solar power for upwards of 80,000 homes, Mojave Solar included. The company Abengoa stated that the Mojave Solar site alone, which is a 280MW solar thermal farm, will generate around $196 million in tax revenue over a 25 year period, will provide around 2,000 jobs, and help meet California’s state mandate to generate one-third of its electricity from clean energy by 2020. But, even though these solar farms are very useful, they might become ‘extinct’ or no longer built. It was only a few years ago when there was a boom in solar panel construction and installation due to the price of the panels dramatic drop due to the federal investment tax credit (ITC), that gave developers a 30% tax credit for solar projects. But, by the end of 2016, this tax credit is expected to drop to 10% due to changing federal policy, threatening the further construction of large scale solar panel farms and potentially smaller scale solar panel installations.
Currently, there are no future large solar thermal or panel projects planned in the United States. Because of the uncertainty of whether or not installing solar panels on a large scale will continue to be cheap, there are many companies that have cancelled solar thermal sites in the US, deeming them no longer economical and began focusing internally or installing panels on a smaller scale. Also, large solar loans are no longer regularly coming out of the Department of Energy as the used to. When Ivanpah was built in Las Vegas, they procured a $1.6 billion loan and Abengoa and their Mojave Solar received a $1.2 billion loan.
Since these large scale solar panel and thermal farms are going to begin to disappear, at least in the United States, it’s time to look towards the continually growing residential solar power installation and businesses installing solar panels on their buildings. Utilities look at and compare the costs of building natural gas plants and other types of clean power, and if solar is not the cheapest, it’s an easy decision for companies to go with something else. But, although we may start seeing the decline in large solar panel and solar thermal farms in the United States, there is a possibility of them continually being built in countries across the world, including China and Africa.
What do you think the future of large solar panel and thermal plants is? Leave a comment below!
Photo Credit: Solar Farms and Failure in the U.S.