Solar on the Rise
The market for utility-scale solar, meanwhile, has been soaring as the cost of solar PV panels continues to plummet. According to a March 2015 report by the Solar Energy Industries Association and GTM Research, about 3,900 MW of utility-scale solar—including more than 700 MW of concentrating solar capacity—came on line in 2014. Another 4,800 MW is expected to come on line in 2015.
Solar projects are backed by a federal tax credit of their own: an investment tax credit that, through the end of 2016, provides the developers of utility-scale and smaller solar jobs a tax credit equal to 30% of the value of the project. The ITC shrinks to 10% in 2017, and that change alone has prompted a rush to get projects built this year and next.
"Developers want to get their projects completed prior to this reduction of incentives," says Trent Mostaert, vice president and general manager of Mortenson's Solar and Emerging Renewables Group. The planned ITC reduction "is causing a roller-coaster effect in the solar market," he says, adding that he expects the market "will rapidly heat up in 2015-16, followed by a drastic drop of installations in 2017."
Solar advocates have been pressing for either an immediate extension of the 30% ITC past 2016 or a longer-term, more incremental ramp-down in the size of the ITC, starting in 2017. Says Mostaert, "We need a policy in place which provides for long-term, steady solar growth."
A significant share of wind and utility-scale solar construction has been concentrated in a few states: The wind blows most reliably in the Great Plains and Texas, for example, and the sun shines most intensely in the desert Southwest.
Also, some states have policies that encourage wind and solar development. Texas regulators, for instance, supported the development of more than 3,500 miles of new electric transmission lines to connect the windiest, sunniest parts of west Texas and the Texas Panhandle—dubbed "competitive renewable-energy zones," or CREZ—to population centers such as Dallas-Fort Worth and San Antonio. Nearly $7 billion in new CREZ lines allows transmission of more wind power, which is spurring the construction of several thousand MWs of new wind capacity.
"We currently have 12,569 MW of installed wind-generation capacity" in the Electric Reliability Council of Texas region, which covers about 85% of that state, "and expect it to grow to 16,564 MW by the end of 2015"—a 4,000-MW increase, says ERCOT spokeswoman Robbie Searcy.
North Carolina's renewable portfolio standard is encouraging the development of scores of utility-scale solar projects. Nearby, Georgia Power plans to add more than 900 MW of solar capacity by the end of 2016; the solar power the utility has agreed to buy from solar developers is so inexpensive that it will put no upward pressure on the utility's rates.
The increasing amount of variable-output wind and solar capacity coming on line is spurring interest in battery-storage projects, which can store excess wind and solar energy until it is needed.
Blattner Energy recently completed one of the nation's largest battery-storage jobs: the 20-MW Lee-DeKalb project in Illinois. The project consists of eight 2.5- MW LG Chem lithium-ion batteries, the same kind used in many electric vehicles.
Battery-based energy storage in the utility sector is still in its infancy, and only 61 MW was added in 2014, according to the Energy Storage Association. As battery prices drop, interest in battery storage is rising, and 220 MW is expected to be installed this year.
Another emerging construction opportunity tied to renewable energy is the installation of microgrid systems, which comprise combinations of solar facilities, batteries and backup generators that, together, provide reliable power to individual customers or groups of customers during events that disrupt the grid, such as blackouts and hurricanes.