U.S. PV Power Potential Vs. Actual Solar Usage
Why this research matters
Investors
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Utility-scale solar photovoltaic (PV) in a key focal point for institutional investors.
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Market acceptance by commercial lenders of utility-scale solar photovoltaic (PV) and bankability of such projects.
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Increasing shift towards zero carbon emission electricity generation.
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Supply-demand disequilibrium for investment that contributes to climate change mitigation.
Companies
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Corporates are seeking ambitious pathways to achieve net-zero targets.
Policymakers
With 71,000 megawatts of utility-scale PV projects installed in the United States, prices are now competitive with all other forms of electricity generation. Utility-scale solar PV has become a significant part of the U.S. energy mix .
The United States Department of Energy Loan Program Office (‘LPO’) guaranteed $16.1bn in loans to 25 utility-scale solar PV projects under Section 1705 of the American Recovery and Reinvestment Act of 2009 (‘ARRA’). LPO guarantees under ARRA and the subsequent solar projects have led to:
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$1.0bn in of global cumulative investment flows into renewable energy since 2010.
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39.2mn cumulative tons of CO2 emissions avoided.
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Market acceptance by commercial lenders of utility-scale solar photovoltaic (PV) and bankability of projects.
There is a disparity in the amount of sunlight that states within the continental United States are exposed to. Yet, just because a state has a high potential for solar energy power production does not mean that the state is utilizing it to its full potential. When analyzing states’ solar energy use it is important to take into consideration both the states’ potential as well as actual solar energy usage. This dashboard seeks to answer which states are effectively using solar energy they have access to, and which could do better in capturing this available sunlight. In essence, is sunlight exposure a limiting factor of an individual state’s solar energy production, or are there ways to overcome this natural disadvantage and still lead the nation? Investigation regarding current and proposed policy also provides further insights within this subject matter.
Photovoltaic power potential within each state is represented by the CDC’s National Environmental Public Health Tracking Network’s dataset on annual average sunlight exposure measured by solar irradiance kilojoules per meter squared (kj/m^2). While this measure of data comes from 2012, this is the year most recently published by the CDC and still provides a good measure. As expected, states within the southwest have the highest levels of average annual sunlight. Arizona, New Mexico, and Nevada lead with 5755, 5642, and 5296 kj/m^2 respectively. Northern states that line the border of Canada have some of the lowest reports of photovoltaic power potential. The question remains as to whether these states also outperform others regarding solar usage.
Several measures can be used for the solar energy usage and utilization within the state. The first being the amount of money each invests into the industry of solar energy power production and storage. Data for this measure was obtained by Solar Energy Industries Association (SEIA) which provides timely data on the solar market and policy changes by state. California’s mass investment of 85.3 billion dollars leaves all other states trailing far behind, showcased above.
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To provide further insights into actual energy usage within the state, SEIA’s national ranking score is a better measure as it amalgamates multiple measures, one of which being the state’s solar investment. Additionally, this score takes into consideration the number of homes powered by solar, the percentage of the state’s electricity from solar, the number of solar companies in the state, the price change over the past 10 years, and the growth projection.
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Above shows that California still outperforms other states with energy utilization. The southwestern states are seemingly employing the availability of sunlight. The eastern coast is also highlighted as a top performing area because of states such as Florida, Georgia, North Carolina, Virginia, New Jersey, New York, and Massachusetts. New Jersey, New York, and Massachusetts along with Minnesota and Illinois demonstrate that photovoltaic power potential from does not hinder states from scoring well with solar energy national ranking.
Their efforts to make the most of available natural resources do not go unnoticed with national ranks. As shown above, Massachusetts is on the lower end for annual sunlight yet comparatively high in terms of the percentage of electricity that is solar, 19.4 % to be exact. Florida’s prices for solar have decreased by 52% over the past 10 years, the same amount as California, allowing for their 13.5 billion dollars of investment to go farther and making it easier for homeowners to buy panels for their homes. 1,157,337 homes are powered by solar energy putting them on the map for being a top three state. (Solar, 2022) Despite performing well, Virginia has adopted a growth perspective as 21 bills have been proposed within the past year prior to January 28th 2023. (EnerKnol, 2023)
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On the other hand, New Mexico and Arizona have room for improvement. While they lead the nation in terms of average annual sunlight exposure, they fall average when it comes to the percentage of the state’s electricity that is solar powered. Despite Arizona investing the large sum of 15.6 billion dollars into solar, they are only expecting a 6104 megawatt increase over the next five years. Comparatively, Florida, which is high performing, is investing less at 13.6 billion but has a growth projection that is 3897 megawatts greater than Arizona’s projection. (Solar, 2022) The state is working towards improving their national ranking as shown by the prevalence of solar debate in the state’s legal system. When looking into the number of proposed bill legislation relating the solar industry, Arizona is a top performer with 16. (EnerKnol, 2023)
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New Mexico has even more room to improve as it places second in terms of photovoltaic power potential but has a national ranking of 19th. (“Annual”, 2012) Only 6.2% of the state’s electricity is from solar. The Annual Sunlight vs Percent of Electricity figure reflects these measures as New Mexico lies bottom right. New Mexico’s investment is only 2.7 billion dollars, so their growth projection is low at 4,177 megawatts over the next five years. (Solar, 2022)
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Within the renewable industry, there have been recent changes to move in a positive direction. The goal is to retire traditional coal-generation means of production, and part of the 2022 Inflation Reduction Act helps in this regard as it aids the transition of clean energy utilization. This act distributes $369 billion dollars towards these efforts. Lower taxes from the inflation reduction act have helped renewable energy prices come down, allowing states who developed integrated resource plans for utilities to incorporate renewable aspects into their long-term planning. (EnerKnol Research, 2023) The renewable and solar industry is headed in a great direction. Available sunlight from a state does not necessarily limit their performance of solar utilization as every effort aids. Renewable sources of energy are just beginning to scratch the surface of their great potential. Therefore, more can be done before photovoltaic power potential becomes limiting.
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References
“Annual Average Sunlight Exposure Measured By Solar Irradiance (kj/m2).” (2012). Distributed by Center For Disease Control and Prevention: National Environmental Public Health Tracking Network. https://ephtracking.cdc.gov/DataExplorer/?query=944e81a6-e8b7-43c0-b358-f34d028c2e48&M8=2&M9=5&M10=1 (accessed January 20, 2023).
EnerKnol. (2023, January 28). [Number of Proposed Bills Relating To “Solar Energy” Within the Senate and House, Year To Date January 28, 2023].
EnerKnol Research. (2023, January 31). U.S. Energy Utilities Attune Resource Plans to Harness Inflation Reduction Act Incentives. 2023, February 1.
Solar Energy Industries Association (SEIA). (2022, September). Solar State By State. https://www.seia.org/states-map.