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Centralized Solar

  • [ GWh of Electricity Saved: ]

  • [ Jobs Impact: ]

    • Low
    • Medium
    • High
  • [ Budget Impact: ]

    • Low
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  • [ Conventional Pollutants Reduced: ]

    531 tons
    438 tons
    .007 tons
    81 tons
  • [ Megatons of GHG Reduced: ]



Solar panels are becoming extremely efficient at the same time that the price is dropping on the materials needed to create them. For years, solar power was dismissed as inefficient and too costly to compete with other sources of electricity. That was certainly true in 1954, when silicon cells were first invented in the U.S. and only turned 6% of the energy absorbed from the sun into electricity.1 But, today available solar cells are 21% efficient, with some research panels weighing-in at close to 44% efficiency.2 The result: power costs have fallen 48% since 2010 from $5 per watt to $2.60 per watt,3 making utility-scale centralized solar power plants a cost-competitive alternative to coal and, potentially, even natural gas. Moreover, Concentrated Solar Power (CSP) technology, along with molten salt storage, solves the problem of variability of solar power.4 Yet if the U.S. is to compete in the global clean energy market and take advantage of this energy resource, we need new policies to ensure continued scaling of solar generation, maturation of technology, and domestic market growth.


The benefits of solar are clear. Solar plants often generate electricity during daily peaks of energy demand and are emissions-free. Though it costs approximately $153 to install a MWh of solar photovoltaic power today,5 many experts anticipate that increased efficiency in panels and lower prices on polysilicon and “balance of system components”6 will reduce costs to a very competitive $60 a MWh.7 This will enable solar to compete with other major power sources, even natural gas at $6 per million cubic feet.8 In states like Arizona, Nevada, California, New Jersey, and Hawaii, the solar resources could become competitive far earlier.

Yet for all of the good news, solar development in the U.S. is happening more slowly than overseas. This trend affects not only our ability to roll out solar power in the short-term, but it also means that our capability to compete for market share for solar panels and the rest of the supply chain is diminished.

In 2012, U.S. solar industry installed about 1,600 MW of large scale solar capacity.9 In addition, 1.3 GW of CSP is now being developed.10 But, small, new reforms and policies that increase solar installation growth 20% above current projections could add 1.5 GW more electricity to the grid over the next four years alone.11 If this additional capacity replaces coal generation, it would eliminate as much as 3.2 megatons of greenhouse gas emissions.12 That is the equivalent of removing more than four coal plants from the grid. The increased solar also would abate 429 tons per year of SO2, 354 tons of NOx, .006 tons of mercury, and 66 tons of particulate matter.13


Easing the process for permitting and developing transmission, as well as giving solar equitable tax treatment as enjoyed by other renewable energy sources, would ensure that the U.S. continuing to be a global leader in solar power.

Allow Commenced Construction Costs Under the Investment Tax Credit

The Investment Tax Credit (ITC) is an important tool used to encourage construction of centralized solar. However, the ITC as currently written does not allow projects that have started construction but are not yet complete before the sunset date to be counted. As with any energy project, developing solar plants takes many years. But projects that may not be completed before the tax credits expire may lose investors. By allowing plants that have commenced construction prior to the expiration of the tax credit to qualify for the ITC, we could see an uptick of over 4 million MWh of new solar generation in the U.S.14 Recently, Congress addressed this issue as it applies to wind power and a few other forms of renewable energy, but solar remains at this disadvantage. Congress should make a similar change so that projects commenced prior to the ITC’s expiration may take advantage of its benefits.

Fast Track Permitting for Solar Developers

Like any large energy project, solar plants require permits from the federal government. However, this process of review is on a first-come, first-served basis. While that appears fair, the reality is that projects that are shovel-ready often languish behind projects that are still conceptual. The resulting delays cost those more advanced proposals in both time and financing, as financial backers often abandon those porjects due to interruptions. With the input of industry, FERC should establish a process by which developers are evaluated on their readiness. Upon a finding that a project is ready once the application has been approved, they should be given priority in permitting process.

Encourage New Transmission Corridors

Very few lines run from areas where most centralized solar will be built to the population centers that need more and cleaner electricity. The federal government can take several steps, including reforming the transmission siting process, accelerating interstate transmission compacts,15 and providing financing incentives and revenue sharing to build transmission lines. These policies will be covered in the PowerBook’s Electricity Transmission Component, which focuses on modernizing the American transmission system built decades ago, long before centralized solar was developed.

  1. United States, Department of Energy, National Renewable Laboratory, “Learning About Renewable Energy: Solar Photovoltaic Technology Basics,” Accessed March 4, 2013. Available at:
  2. United States, Department of Energy, National Renewable Laboratory, “Best Research-Cell Efficiencies,” Accessed March 4, 2013. Available at:
  3. Travis Hoium, “Solar Stats that will Blow Your Mind,” Article, Daily Finance, September 12, 2012. Accessed March 4, 2013. Available at:
  4. Molten salt is a storage method developed for concentrated solar power which uses solar heat to generate electricity. See Debbie Sniderman, “Salt Heat Transfer Fluids in CSP,” Article. ASME, February 2012. Accessed March 4, 2013. Available at: That heat can be stored in molten salts, and then distributed when the sun is not shining. This technology is now being rolled out in the private sector and utilities are considering its use to meet state energy requirements. See Martin LaMonica, “Molten Salt Keeps Solar Power Flowing,” Article. CNet. November 20, 2011. Accessed March 4, 2013. Available at:
  5. See United States, Department of Energy, Energy Information Administration, “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012,” Report, July 12, 2012. Accessed March 4, 2013. Available at:
  6. Balance of system components refers to all parts of a solar photovoltaic system excluding the panel itself. See Rocky Mountain Institute (RMI), “Solar PV Balance of System” Accessed March 4, 2013. Available at: Analysts predict that balance of system components will begin to decrease in price in the near future now that more attention is being focused on this part of the solar supply chain. See “Solar Balance-of-System Costs Account for 68% of PV System Pricing: New GTM Report,” Article. GreenTechMedia. November 15, 2012. Accessed March 4, 2013. Available at:
  7. United States, Department of Energy, Office of Energy Efficiency and Renewable Energy, “DOE Pursues SunShot Initiative to Achieve Cost Competitive Solar Energy by 2020,” February 4, 2011. Accessed March 4, 2013. Available at:
  8. Based on EIA prediction that natural gas generation will remain about $66 per MWh. See United States, Department of Energy, Energy Information Administration, “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012,” Report, July 12, 2012. Accessed March 4, 2013. Available at:
  9. “Sustainable Energy in America 2013 Factbook,” Report, Bloomberg New Energy Finance, January, 2013, p. 24. Accessed March 4, 2013. Available at: Note that large scale solar includes centralized solar and some larger distributed solar systems.
  10. Ibid, p. 24.
  11. Based on assumptions developed through analysis of solar industry data in the Solar Energy Industries Association Q3 2012 Report. See “U.S. Solar Market Insight Report: Q3 2012 Executive Summary,” Report, Solar Energy Industries Association (SEIA), 2012. Accessed March 4, 2013. Available at:
  12. Analysis based on an assumed growth of 1.5 GW over four years and data from the Energy Information Administration on capacity factor of energy, and on peer reviewed analysis of GHG output by energy source. See United States, Department of Energy, Energy Information Administration, “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012,” Report, July 12, 2012, Table 1. Accessed March 4, 2013. Available at:; See also, Benjamin Sovacool, “Valuing Greenhouse Gas Emissions from Nuclear Power: A Critical Survey,” Article, Energy Policy, June 2, 2008, p. 2950. Print.
  13. Calculations based on conventional pollutants of a 550 MW subcritical bituminous pulverized coal plant, assumed to be average sized for the PowerBook. See United States, Department of Energy, National Energy Technology Laboratory, “Subcritical Pulverized Bituminous Coal Plant,” Report. Accessed March 4, 2013. Available at:
  14. “Commenced Construction Modification for Renewable Energy Tax Incentives,” Report, Solar Energy Industries Association (SEIA), October 3, 2012. Print.
  15. A full background on interstate transmission compacts is provided by the Council of State Governments. See Council of State Governments, National Center for Interstate Compacts, “The Electric Transmission Line Siting Compact Legislative Briefing: Background and Summary,” 2011. Accessed March 4, 2013. Available at: