The Changing Solar Landscape in the Southeastern US

The author, Elise Fox.

This is a guest post written by Dr. Elise B. Fox, Principal Engineer at Savannah River National Laboratory in Aiken, SC, and Fellow of the American Chemical Society.

The Southeastern US is not typically synonymous with aggressive renewable energy strategies, but several factors over the past several years are changing the trajectory. For one, the cost of solar is rapidly declining. If we take South Carolina for example (see Figure 1) the average cost of a residential PV system fell from $4.40/W to $3.44/W, or roughly $1/W, in a two-year period. For a home owner installing a 9 kW system, the current average size system in SC, this equates to a $8,640 savings or a 22% savings.

While costs are falling, adoption rates are not uniformly increasing in Southern states. South Carolina, has increased the total capacity of residential systems from 3.6 MW in 2014 to over 65 MW this year. This is a statewide increase from close to 580 individual distributed systems to over 6,000. That is tremendous growth in a short period of time. South Carolina’s nearest neighbors, Georgia and North Carolina, are the two Southeastern states we typically hear about for growth of the solar industry. However, SC has double the residential solar install capacity of NC and thirteen times that of GA. It also won’t be long before the state, which has half the population of its neighbors, catches up in utility scale solar. A quick look at interconnection filings shows over 4 GW of utility scale solar in the queue for SC.

So, what’s going on in SC that makes this possible? That would be Act 236. This landmark law established a voluntary target of 2% solar by the state’s Investor Owned Utilities (IOUs) by 2021. What sets this apart from a traditional Renewable Portfolio Standard like NC’s is the designation that half be utility scale and half be distributed scale. It also has an additional carve out of 0.25% for systems smaller than 20 kW. This, along with enabling third party leasing and some very favorable incentives from the IOUs, has allowed the residential market to take off at astonishing rates. In 2016, nearly 40% of the residential systems in the state were leased.

Figure 1. The average cost in $/W for system type based on installer supplied data.

This doesn’t mean that all is rosy in the solar industry in SC. The state is approaching net metering caps faster than anyone anticipated and must be addressed soon to avoid disrupting the market. In addition, a vast majority of these distributed systems are installed in the IOU territories. Most leasing companies will not install in the cooperative and Santee Cooper territories which limits the accessibility of solar for rural and lower income communities.

Act 236 has shown the power of what carefully crafted solar legislation can do for the economy and renewable energy adoption rates. The next big challenge is to find meaningful ways to continue to grow the solar economy as the energy landscape changes at rapid rates and to enable adoption in states that lack comprehensive net metering legislation, such as Alabama and Tennessee. Act 236 can serve as an initial template to help the residential solar economy grow and prosper throughout the Southeastern US.

Sources:

1. E.B. Fox and T.B. Edwards, “2015 South Carolina PV Soft Cost and Workforce Development, Part 1: Initial Survey Results”, SRNL-STI-2016-00177, May 2016. https://www.osti.gov/scitech/biblio/1252420-south-carolina-pv-soft-cost-workforce-development-part-initial-survey-results

2. E.B. Fox and T.B. Edwards, “2015 South Carolina PV Soft Cost and Workforce Development, Part 2: Six month confirmation of anticipated job growth”, SRNL-STI-2017-00039, Jan 2017. https://www.osti.gov/scitech/biblio/1342716-south-carolina-pv-soft-cost-workforce-development-part-six-month-confirmation-anticipated-job-growth

3. E.B. Fox M.D. Drory, and T.B. Edwards, “2016 End of Year South Carolina PV Soft Cost and Workforce Development, SRNL-STI-2017-00474. DOI:  https://www.osti.gov/scitech/biblio/1377028-end-year-south-carolina-pv-soft-cost-workforce-development

 

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