Small Solar: Back in Favor
We have long been supporters of small solar rather than big utility-scale plants that cover thousands of acres.
As federal subsidies in Europe and the US contract, lenders are wary of risks, panel prices are falling further, and utilities are less interested because of low natural gas prices, small solar projects between 1-20 megawatts (MW) are the way to go.
Small solar projects are much cheaper and come online quickly. And investors don’t have an appetite for large solar plants right now, Jonathan Weisgall, vice president of MidAmerican Energy Holdings told The Desert Sun.
Smaller projects are also not environmentally damaging compared to large plants that cover thousands of acres of sensitive desert. Those projects have always been unnecessary because of the many brownfields and marginal lands that’s readily available, along with parking lots and rooftops.
Small projects can be sited right next to a substation and feed right into the grid – no new transmission needed. And permitting is much faster and easier. It can take years to get a permit to build on public lands and can cost millions in environmental mitigation costs.
Developers still need upfront capital though. The biggest hurdle right now is financing.
That’s why many see solar leasing as among the most important drivers for the industry for the foreseeable future. Companies like SolarCity, with $280 million in financing from Google and the $1 billion SolarStrong project with Bank of America, could be building many of the projects.
It’s interesting how quickly industry dynamics can shift. For the past few years, utility-scale projects dominated, and even recently proved how beneficial they are to investors. Suddenly, few people see many more of those big plants going up anytime soon.
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