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Solar vs. wind: Federal study finds a winner

The competition between wind and solar power in the United States is breaking decisively in solar’s favor, according to a new report from Lawrence Berkeley National Laboratory.

Wind power is still the dominant renewable energy source nationwide. New wind turbine plants added 9,000 megawatts of generation capacity in the United States last year to bring the total to 106,000 MW, versus 6,000 MW in new utility-scale solar plants, making that total 29,000 MW, the report said.

But “solar has rocketed to the top” on lists of proposed solar and wind projects seeking advance approval to tie into U.S. grid networks, said Mark Bolinger, an author of the study, a 14th annual LBNL update on wind and solar energy. As recently as 2016, proposed utility scale solar energy projects trailed both wind and natural gas in number.

Even though some renewable projects in the queues will not be completed, solar’s advantage is clear, Bolinger said. While solar power is still more costly than wind, except in California, solar delivers a greater net financial benefit to customers on average, he said.

New additions of utility, commercial and residential solar units would stay near 20,000 MW a year for the first half of this decade, aided by a longer phaseout of federal tax incentives than wind projects receive, LBNL said, citing a Wood Mackenzie analysis. Several market studies predict wind generation will grow by half that amount in the next few years, the lab reported.

New solar projects are benefiting from a growing trend led by California toward “hybrid” combinations of renewable generation with battery storage, the lab said.

Hybrid units are helping California deal with the “duck curve” challenge at sunset on hot days when power demand is still near its daily peak. The curve describes the fast ramp-up that natural gas generators must deliver to offset the drop in solar power then.

A quarter of all proposed U.S. solar projects are combined with batteries, but in California, the figure is nearly two-thirds, according to the lab.

Researchers for Lawrence Berkeley and the Electric Power Research Institute also reported in March that “interest in hybrid plants is high, and that hybridization can offer benefits relative to stand-alone plants. There are also limitations to hybridization, however, and market rules and policy incentives can make or break the finances of a project.”

Solar and battery hybrid projects are eligible for the federal investment tax credit, but wind and battery pairings are not, and that may make the solar pairing more economical in some locations, said Ryan Wiser, head of the lab’s electric markets group.

In California, hybrid solar and wind projects with batteries have greater market value than stand-alone solar and wind projects, because developers receive payments for both energy delivered and capacity held in reserve. The advance is much smaller in Texas, which pays generators for energy, not capacity, this report said.

‘A number of headwinds’

Yesterday’s report documents how geography and state policy have dictated wind and solar power development.

Whether wind or solar power is cheaper “depends on which region of the country you’re looking at,” Bolinger said.

The national average price of wind in purchase price agreements has dropped below 2 cents per kilowatt-hour. It was 7 cents per kWh in 2009. The low average is dominated by cheapest prices in the U.S. Great Plains and Upper Midwest, where wind conditions are strongest.

Texas and Iowa alone added nearly two-thirds of the 9,000 MW of new wind farms in 2019. Those states plus Illinois, South Dakota, Kansas and North Dakota contributed 82% of the additions.

The national average for solar purchase price contracts dropped to 2.4 cents per kWh last year, 80% below the price in 2010.

Overall, wind and solar still total no more than 10% of U.S. electricity output, the lab said.

“There are a number of headwinds that could slow [renewable] market growth,” Bolinger said, citing the phaseouts of federal tax credits.

In parts of the United States where the two power sources compete, “they tend to cannibalize their own market value,” he added. Regulatory and political hurdles have slowed construction of long-distance, high-voltage lines linking prime renewable power areas with urban centers.

Yesterday’s report also covered how U.S. suppliers are faring in international markets for wind turbines. Domestic manufacturers provided up to 90% of the nacelle or turbine motor housing content in 2019, between 65% and 85% of the towers, and 40% to 70% of the blades, but the U.S. share is much lower for most turbine power components.

China was the largest foreign supplier of wind power equipment, with imports totaling $428 million in 2019, followed by Spain at $358 million. Wind equipment imports totaled $2.6 billion last year.