Utility-scale solar no longer makes sense

Brightsource Ivanpah concentrating solar thermal power plants: Utility-scale solar no longer makes sense

Brightsource Ivanpah concentrating solar thermal power plants

In an article titled “Siemens Will Shut Solar Unit on $1 Billion Loss in Two Years“, Bloomberg reported that “Siemens AG will close its solar power unit after struggling to find a buyer following losses of at least 784 million euros ($1 billion) euros since 2011 amid Chief Executive Officer Peter Loescher’s failed push into that business to expand renewable energy offerings.”

This is continuing confirmation that Utility-scale solar no longer makes sense. Siemens is the second company to exit the concentrated solar thermal power market after Brightsource Energy. At the same time, utility-scale solar installations are losing ground, as a percentage of the market, to rooftop installations.

If utilities own solar as a central station generating source, then it increases revenues and profits for them. If customers own rooftop solar, utilities lose sales, revenues, and profits. Solar is better geared to rooftop use than central station power plant use.

I think this recognizes the facts David Crane, CEO of NRG Energy, laid out at the Bloomberg NewEnergy Finance Summit in April. As reported by David Roberts in Grist:

He said yesterday that the whole approach of covering vast swathes of desert in solar panels and piping the energy hundreds of miles through high-voltage transmission lines “was stupid in 2008 and it’s stupid today.” Rather, the key advantage of solar is that it can cover houses and buildings and car parks and other urban structures, enabling them to generate their own power.

With advances in the cost-effectiveness of solar panels and as part of building integrated photovoltaics (BIPV), how  will recently built utility-scale solar farms remain economic? Not nearly as long as their purchased power agreements, I fear.



One comment on “Utility-scale solar no longer makes sense

  1. Chuck Rosselle on said:

    Could not agree more.