US renewable energy set to grow 8.1% in 2016 – EIA

Utility-scale solar power generation will increase by about 80% by end of 2017

The US Energy Information Administration is forecasting total renewables used in the electric power sector to increase by 8.1 per cent this year, including a big jump in utility-scale solar power.

Solar growth has historically been concentrated in customer-sited distributed generation installations (rooftop panels). EIA estimates that total U.S. solar generation (PV and thermal) was 3.6 million megawatthours in Sept. 2015, with 33 per cent of that total coming from small-scale solar PV.

Solar accounted for about one per cent of American power generation in Dec.

EIA expects utility-scale solar capacity will increase by about 80 per cent (10 GW) between the end of 2015 and the end of 2017, with 4.1 GW of new capacity being built in California.

Utility-scale solar power generation is projected to average 128 gigawatthours per day (GWh/d) in 2017, an increase of 42 per cent from the 2016 level. Forecast utility-scale solar power averages 1.1 per cent of total U.S. electricity generation in 2017.

Other states leading in utility-scale solar capacity additions include Nevada, North Carolina, Texas, and Georgia, which, combined with California, account for almost 80 per cent of the projected utility-scale capacity additions for 2016 and 2017.

Wind capacity, which starts from a significantly larger installed capacity base than solar, grew by 13 per cent in 2015, and it is forecast to increase by 14 per cent in 2016 and by 3 per cent in 2017.

In Dec. Congress passed an extension and modification of federal tax credits for new wind and solar generators. This legislation extended production tax credit eligibility for wind generators to include plants starting construction through the end of 2019, with the value of the credit declining from 2.4 cents/kWh to 1.0 cent/kWh during the first 10 years of plant operation.

It also extended investment tax credit eligibility for solar generators at the 30 per cent level for plants starting construction through the end of 2019, with the value dropping each year to 10 per cent for plants under construction in 2022 and beyond.

EIA expects little effect from these renewable electricity tax credit extensions in 2016 because most plants that will enter service in 2016 are already being developed. Impacts in 2017 depend on how many wind and solar projects are already in the development queue but not yet under construction.

The US Environmental Protection Agency’s approval of the Clean Power Plan in August 2015 may also affect new renewable construction over the next several years, but the recent decision by the Supreme Court to delay implementation until a lower court hears a legal challenge from a number of states will likely delay any effects from the new regulations.

The EIA also says that near-term effects of the Clean Power Plan will be less certain until states lay out their implementation plans.

The current El Niño cycle has mixed implications for the hydroelectric generation outlook. This winter started off wet in the Pacific Northwest, where roughly half of the nation’s hydropower is generated.

In Dec. most of the Pacific Northwest saw precipitation more than 30 per cent above normal), which points to above-normal snowpack levels in the region.

California also had above-normal precipitation in Dec. However, drought conditions persist in much of the state.