Opportunities and Challenges of Developing Solar Resources in California

The energy policy goals of the State of California have set very aggressive targets for clean renewable energy. The state Renewable Portfolio Standard (RPS) has been accelerated with the target to meet twenty percent electricity demand of the state with renewable resources by 2010. The California Solar Initiative (CSI) calls for 3.0 GW of solar photovoltaic (PV) power by 2016. The Western Governors Association (WGA) has set a target of reaching 30.0 GW of clean, diversified energy by 2015. Solar energy is expected to be a major contributor in meeting these targets. However, the relatively high cost of solar power presents significant barriers for the solar industry. This paper briefly reviews the opportunities, challenges and barriers faced by the solar industry and presents results of a study conducted by California Energy Commission (CEC). Technical and economic feasibility of California solar resources (both PV and CSP) and impacts of injecting solar power into the electricity grid at strategic locations is examined. Some of the major findings include: In the near term PV power still needs to rely on incentives to be cost competitive with other resources, however the economics significantly improves when time of use and tiered rates, long term financing, and non-energy benefits are considered. Approximately 500 MW of residential PV could be deployed in California by 2010 and over 2000 MW by 2017. Locating 500 MW of grid connected PV power in the highest housing growth areas of the state could provide two-to-one benefits to the electricity system