US solar projects bask in mid-single-digit extra radiation in Q1'22

Introduction

U.S. photovoltaic power generation benefited from solar radiation 4% above the 20-year norm in the first quarter of 2022, likely boosting earnings across utility-scale solar portfolios, which, combined, operated more than 64 GW as of March 31.

All top 20 owners of operating U.S. and Canadian solar capacity enjoyed radiation above the 20-year norm in the first quarter, with portfolios heavily exposed to Texas, the Southern U.S. and California standing out, thanks to nearly 10% positive deviations across those geographies.

The Southern U.S. experienced particularly dramatic positive deviations, with Louisiana, Kentucky and Alabama all in 9%-plus territory. Texas, the second-largest U.S. state by operating solar capacity with 9.4 GW at the end of the first quarter, logged the largest deviation, up 9.7%. Utility-scale solar capacity leader California, meanwhile, saw solar radiation 8.1% higher than the norm. Only nine states, mostly in the Northeast, ended in the red.

With portfolios concentrated in some of the sunniest U.S. states, all top 10 owners of operating U.S. and Canadian solar capacity basked in extra solar radiation in the three months ended March 31. Berkshire Hathaway Inc. and Consolidated Edison Inc. topped the charts, up 8.2% and 7.8%, respectively. The Southern Co. rounded out the top three, with solar radiation 6.8% higher than the norm.

With 1.2 GW in operating solar capacity in California, or about 69% of the company's total, Berkshire Hathaway benefited from the Golden State's high single-digit variation. Berkshire in California notably owns the 586-MW Topaz Solar Farm — the nation's largest solar project. Topaz soaked up 10.8% extra radiation in the first quarter. California's weight in the company's portfolio — Topaz accounts for more than a third of Berkshire Hathaway's solar capacity — underscores limited diversification. That said, through this portfolio, Berkshire capitalizes on close to 300 sunny days a year in Southern California.

With nearly 47% of its footprint in Florida, solar-capacity frontrunner NextEra Energy Inc. experienced the second-lowest positive deviation across the group of 10, at 2.5%. Florida, home to 8.5% of overall U.S. utility-scale solar capacity, was relatively in line with its 20-year average. Drilling into the data, however, shows the Sunshine State split in half during the period under consideration. Northern Florida mainly recorded positive deviations. The state's southern tip, on the other hand, mostly experienced below-normal radiation.

Thirty south Florida NextEra solar projects with an aggregate 2.2 GW in capacity experienced solar radiation below the 20-year average, with Lakeside Solar Center Project, FPL Fort Drum Solar Energy Center and Grove Solar Energy Project bringing up the rear, down 2.7%. Exposure to New England and the Great Lakes region also weighed on NextEra's overall solar radiation performance. In Wisconsin for instance, NextEra's 100-MW Point Beach Solar Energy Center saw solar radiation 8% below average.

Among midsize owners, three companies — Goldman Sachs Renewable Power LLC, Hanwha Group, and Enel SpA — experienced 8%-plus positive deviation, thanks in part to a nonnegligible presence in California and Texas. Approximately 60 miles north of the Topaz Solar Farm, Goldman Sachs's 300-MW The Slate Solar Project logged a positive double-digit solar radiation deviation, offsetting below-average performances across the company's smaller projects in the Northeast, Minnesota and desert Southwest.

Of note, Arizona and Utah ranked 20th and 21st, respectively, in first-quarter 2022 solar radiation deviation, somewhat contrasting with the states' high-insolation statuses. Arizona and Utah typically display some of the highest solar capacity factors in the nation.

Solar radiation is the mean surface downward short-wave radiation flux measured from the fifth-generation European Centre for Medium-Range Weather Forecasts reanalysis. This variable includes direct and diffuse solar radiation and is the model equivalent of global horizontal irradiance, the value measured by a pyranometer, a solar radiation measuring instrument. The data is available at quarter-degree latitudes and longitudes, a spacing of slightly over 27.5 km. The analysis compares first-quarter 20-year solar radiation values with first-quarter 2022 radiation values.

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^{Chris Allen Villanueva contributed to this article.}

^{This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.}