Solar Energy Finally Affordable
Thanks to recent advances in technology and a growing demand for renewable energy, solar power is starting to become a mainstream, commercial reality. According to the Associated Press (AP), solar power is expected to double this year in addition to doubling last year.
While more solar energy projects are planned over the next year than any other power source, the industry remains relatively small. Held back by high upfront costs associated with solar panel installations, the new drop in the cost of equipment is about to change the game. The AP reports that solar panel prices have plunged by two-thirds in the last three years, which has made it easier for installers to market the economic benefits of solar energy in addition to the environmental ones.
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Across the U.S., solar power installations grew by 102 percent from 2009-2012 alone, and are expected to climb monumentally over the next decade. "Every manufacturer globally is looking around for the next major growth market, and the U.S. is the first one everyone points to," Shayle Kann, managing director for solar research at GTM Research, told the AP.
Due to the decline in costs of polycrystaline silicon, the main material used to build solar panels, in addition to an increase in production, solar energy is becoming affordable. In response to shrinking subsidies, Germany's biggest solar market experienced a recent sharp drop in demand, further bringing down prices with a surplus of solar panels.
The drop in material costs will take some of the burden off governments to provide subsidies for solar installation projects, but tax breaks and other subsidies from federal and state governments will still be an important component in making solar affordable. When the federal solar subsidy shrinks in 2016, proponents claim that solar panels will become cheap enough to make solar energy competitive with fossil fuels.
Lightsource bp’s first Spanish project powers up in Zaragoza
Lightsource bp has powered up its 247MW flagship solar project Vendimia in Zaragoza, Spain.
Around 615,000 bifacial solar panels have been installed, over 650 hectares of land on multi-row tracker technology enabling the panels to follow the sun, maximising energy generation efficiency. In addition, two overhead transmission lines at 18km and 20km were constructed to efficiently deliver the solar power into the local network.
The five-project cluster was constructed safely during the COVID-19 pandemic and commercial operation recently began. The total power output will be supplied to bp’s European power trading team under a long-term Power Purchase Agreement (PPA).
Fernando Roger, Country Head for Lightsource bp Spain, said the connection of its Vendimia project demonstrates the resilience of solar. "We had to face many challenges due to the COVID-19 pandemic, but our team and trusted partners remained focussed, and now we have completed our first project in Spain. We would also like to extend a special thank you to all the landowners involved for their continued support on this project.
Felipe Arbelaez, senior vice president for zero carbon energy bp said: “It’s fantastic to see the safe start-up of this first project in Spain, and for Lightsource bp to achieve an impressive 3GW pipeline in just two years. Through disciplined investment and safe execution, we are delighted to see the next chapter of bp’s energy story in Spain come online. This project is also a great example of the power of bp’s integration capabilities as our expert power trading team will offtake the power generated, supporting the financial stability of the project and meeting bp’s strict returns threshold.”
The construction process was handled by Lightsource bp’s appointed contractor, Prodiel (an Andalusian engineering, procurement and construction company) and over 600 local jobs were created during that time. Prodiel will continue to maintain the solar cluster under an Operations & Maintenance agreement for the next two years.
At the opening ceremony, Carlos Barassa, head of country for bp Spain, said: "The Vendimia solar project that we are inaugurating today in Zaragoza is great example of the fulfillment of bp's ambition in its transition to an integrated energy company, and our contribution to building a low-carbon future."
bp will pay 7X Energy $220 million for the projects and 1GW of 'safe harbour' equipment and expects the acquisition to complete in 30 days. The projects, spread across 12 states - with the largest portfolios in Texas (ERCOT) and MidWest (PJM) - are expected to meet bp’s low carbon investment criteria, generating returns of at least 8-10%.