Environment

An aerial image shows vehicles driving on the California 14 Highway as solar panels, part of an electricity generation plant, stand on June 18, 2021 in Kern County near Mojave, California.
Patrick T. Fallon | AFP | Getty Images

Solar power in the U.S. has grown 4,000% percent over the last decade, but it still only accounts for 3% of electricity generation. The Biden Administration wants to change that, and on Tuesday said that solar could provide 40% of the country’s electricity by 2035 — if the government enacts supportive policies.

In order to meet this target, the Department of Energy said that solar’s growth rate will need to triple or even quadruple by 2030. That means costs will have to keep dropping.

The total cost of a solar system depends on variables including size, whether it’s purchased outright or leased and power prices in the specific location. Solar’s levelized cost of energy, which allows it to be compared to other forms of power generation, has fallen more than 70% over the last decade. But costs will need to continue to decline to meet these growth goals.

The Department of Energy’s goal is for the levelized cost of energy for a solar residential system to reach 5 cents per kilowatt hour by 2030, down from 50 cents in 2010. Commercial costs need to fall from 39 cents in 2010 to 4 cents by 2030, while utility-scale solar needs to decrease from 27 cents last decade to 2 cents by 2030.

U.S. solar installations hit a record high in 2020 as falling costs and supportive policies boosted demand, and the industry is expected to post another banner year in 2021.

Still, overall penetration remains low. The Department of Energy pointed to a number of actions that could accelerate solar buildout, including clean energy tax credits. The Investment and production tax credits, which were extended on a short-term basis in December, have been instrumental to solar’s adoption.

Tax incentives for transmission and storage could also lead to faster solar deployment. Transmission lines can carry power generated by wind and solar sites, which can be far away from end users, to the cities where it’s needed. The memo noted that direct pay tax incentives could mobilize billions of dollars in private capital.

The Department of Energy also pointed to prioritizing innovation and advanced manufacturing, as well as investing in low-income and community solar.

“Low- and moderate- income Americans are less likely to adopt solar due to issues like lack of access to financing, which perpetuates energy inequalities and leads to lower overall levels of solar deployment,” the memo said.

Fighting climate change is a priority for the Biden administration. On his first day in office the president re-entered the U.S. into the Paris Climate Accord, and he has pledged to slash greenhouse gas emissions in half by 2030. He’s also called for a carbon-free power sector by 2035, for which solar growth will be instrumental.

The infrastructure package passed by the Senate last week includes billions of dollars for clean energy projects, although the amounts are significantly pared down from the original American Jobs Plan unveiled in March. The administration has repeatedly said that a shift away from fossil fuels to clean energy will fuel job growth, and the memo claims the industry could employ as many as 1.5 million people by 2035.

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