You might think solar is for suckers. But when the International Energy Agency says wind and solar can produce up to 30% of electricity needs at little additional cost in the long term, it's time to listen. Here's what you need to know.
The International Energy Association (IEA) recently released a seminal study on solar and wind, and its conclusions are definitively different from its past perspectives. This latest report, The Power of Transformation-Wind, Sun and the Economics of Flexible Power Systems, describes a world where energy infrastructure not only accepts, but embraces the use of wind and solar power as powerful assets in any energy portfolio. IEA Executive Director Maria van der Hoeven discusses:
This new IEA analysis calls for a change of perspective. In the classical approach, variable renewables are added to an existing system without considering all available options for adapting it as a whole. This approach misses the point. Integration is not simply about adding wind and solar on top of 'business as usual'. We need to transform the system as a whole to do this cost-effectively.
America isn't exactly known for its clean and green image, but our wind and solar use is actually above average. While solar accounts for just 0.2% of generation capacity (most recent data available), wind's 4.2% puts total capacity 1.4 percentage points above the international average of 3%.
But for a real solar and wind push to gain ground, we simply need more scale. Countries like Italy, Germany, Ireland, Spain, Portugal, and Denmark all pull 10% to more than 30% of their energy from these renewable sources. Last December, Denmark snagged a new record as wind provided a whopping 55% of all electricity.
Luckily for us, there are already several solar companies expecting major scale-ups in the coming years.
SolarCity Corporation (NASDAQ:SCTY.DL) is tackling solar systems of all sizes. From residential rooftops to businesses to government buildings, SolarCity Corporation does it all. Since its beginnings eight years ago, SolarCity has soared. It exceeded its 2013 guidance of 250 MW deployed by 30 MW, dropped costs 30% on a per-watt basis, and pushed into positive cash flow for Q4. While SolarCity Corporation represents just 32% of total residential solar market share, its in-house operations in 14 states keeps quality tip-top. CEO Lyndon Reave believes that scale is the answer, and expects SolarCity to install 1 million solar panel kits over the next five years.
With local dealers nationwide, SunPower Corporation (NASDAQ:SPWR) brings solar to more states than SolarCity Corporation. The company has been around since 1985, and boasts the largest residential and commercial customer base around. SunPower Corporation has installed over 100,000 residential systems in its time, and boasts the "world's highest efficiency solar cells," delivering 44% more electricity than similarly sized solar panels.
While SolarCity Corporation's bread and butter is residential systems, SunPower Corporation has a substantial power plant presence. The company has over 120 utility-scale solar farms and has partnered with NRG Energy (NYSE:NRG) to build an especially impressive 250 MW "Solar Ranch" in San Luis Obispo County, California. The facility came online last October and will power the equivalent of 100,000 homes when it's ramped up to full capacity.