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CERAWEEK: Solar expected to see more records in 2021 despite facing challenges

Highlights

Solar sets record 2020 despite lower demand

Renewables wrongly politicized in Texas outage

Policy critical to solar generation growth

Houston — The biggest challenges to the utility-scale solar industry are integration, supply chain constraints and a lack of discipline, power industry experts said March 4 at the CERAWeek by IHS Markit conference, held virtually.

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The emerging controversy over human rights in China, where a majority of solar equipment is built, could impact power markets across the globe, said Laura Beane, chief renewables officer at ENGIE North America.

"There's so much demand here, but ultimately if we start getting constraints of where we can source the materials," Beane said. "That is a very real concern for the industry for the years to come."

In addition, many in the industry are struggling with how to integrate new technologies, said John Berger, CEO of Sunnova Energy Corporation. The industry will be working for months and years to solve integration needs while also making new technology reliable, he added.

While a wall of capital chases opportunity such as the solar boom, it could be a challenge if there is a lack of discipline, said Pooja Goyal, head of renewable and sustainable energy at The Carlyle Group, as well as a partner and co-head of the infrastructure group and co-head of The Carlyle Global Infrastructure Opportunity Fund.

"An overbuild of solar capacity will have an impact," Goyal said about grid stability. Over the next 10-20 years the focus should be on increasing grid reliability while growing clean energy sources," she said.

2021 expected to be a record year

Utility-scale solar had a record year in 2020 with nearly 12 GW built and there are expectations of 15.4 GW of new solar capacity in 2021, according to the US Energy Information Administration.

"What we saw happen in 2020 was really interesting," Goyal said about lower power demand because of COVID, yet solar generation increased, adding this was because generators shutdown other resources as demand fell off and instead used solar. "We continue to see very robust demand for solar installation projects."

Developers and power plant owners are planning for 39.7 GW of new electricity generating capacity to start commercial operation in 2021, with 39% of that solar, followed by 31% wind, according to EIA.

The same growth trends seen in wind generation are now being seen in the solar industry, Beane said, adding solar is not seeing the same constraints that wind did.

"We're really seeing the [research and development] pick up," Beane said, adding technology advances will create further efficiency in solar panels. "I think there's potentially a long way to go."

Increased levels of competition in renewables are being seen as climate change gets talked about more, Goyal said, adding the extension to the solar tax credit is further helping to drive down costs.

Policy is absolutely critical to solar's growth, Beane said.

"Market policy is important and needs to come into play to ensure we can integrate solar into the market," she said.

Texas situation

"The crisis we are currently living through in Texas ... will spark a lot of policy," Berger said, adding politicians have already politicized the Texas situation making it a fossil fuel versus renewables debate, but that's not what the situation is about. Although Austin politicians will rush to implement policies in response to the power outages that took place across Texas in mid-February, that's the wrong plan, he said.

"Policy has a place here ... but I think the market will have more of an impact on residential side than policy side," Berger said about people wanting to control their own solutions through residential solar, storage and generators. Behind-the-meter solar is driving down costs and pushing up resiliency, he said.