Greentech MediaAugust 3, 2020854
WoodMac: Large-Scale Solar Holds Cost Edge Despite ITC Stepdown, Coronavirus Impacts
Procurement of utility solar panel installation by corporate offtakers currently ranks second overall. However, the share of RPS-driven solar panels, which is procured to help utilities meet zero carbon or renewable energy mandates, has also grown and represented 28 percent of PPA contracts signed in the first half of 2020.
While there is substantive risk of COVID-19 affecting the cost of capital for new utility solar power projects, utility solar panel installations is likely to remain the most economically competitive electricity source in the U.S.
As a result, and despite the stepdown of the federal investment tax credit, voluntary procurement will remain the utility-scale solar power industry's largest driver. In other words, Wood Mackenzie still expect utilities to continue signing new utility solar panel PPAs.
Despite COVID-19 causing economic uncertainty, the pre-contract pipelines currently sits at 258.2 GWdc, with 34 gigawatts of solar power projects having a signed interconnection agreement.
Wood Mackenzie notes that Q1 saw 5 gigawatts of new projects procured in the U.S., a slowdown from 2019 procurement but still one of the biggest quarters for procurement on record.
Q1 2020 was the strongest Q1 on record for most megawatts of new utility solar power capacity installed in the U.S. according to Wood Mackenzie's Solar Data Hub tool. A total of 2.3 GW came online the first quarter of this year, representing 16 percent of Wood Mackenzie’s 2020 U.S. utility PV forecast.
While there have been a few reported cases of projects being delayed due factors related to the coronavirus, developers have, by and large, reported delays are not significant. The virus could, however, pose a risk to future projects that have yet to be contracted.
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