Oregon solar powers up
Big solar in Oregon is about to get a jolt. Falling prices and a renewables mandate are sparking new investment. The result could be an economic stimulus for rural Oregon, but only if developers can move beyond years of failed projects.
A new solar power plant, the likes of which Oregon has never seen, is under construction in Crook County.
When it’s completed next year, the Gala Solar project from Avangrid Renewables will cover more than 200 acres of grazing land southwest of Prineville. At peak, it will produce 56 megawatts of power, more than five times the output of any existing solar farm in the state. Annual generation should match the energy consumption of more than 10,000 average Oregon homes.
Solar installations are broken down into three categories: residential, commercial and utility-scale. While residential and commercial comprised about three-quarters of the 137 megawatts of solar installed in Oregon through 2015, utility-scale — generally considered projects 1 megawatt or larger that can be owned by a utility or an independent producer – is rapidly leaving those categories in the dust.
The state’s generous Business Energy Tax Credit drove rapid growth in commercial solar, but that’s slowed since the Legislature shut down the troubled program in 2014. Residential is doing a bit better, benefiting from a solid net metering program and the Residential Energy Tax Credit, although that’s due to end in 2018.
Big solar’s big advantage is that it costs less than half what it takes to install residential solar. Moreover, sited in the southern and eastern parts of the state, where the solar resource is excellent, it can be twice as productive as solar that goes on rooftops in Portland or Salem.
So after years of struggling to compete in Oregon, continually falling prices and the extension of federal subsidies are giving large-scale solar a chance against wind — and natural gas is in its sights.
“The cost trajectory for solar continues to decline,” said Franco Albi, a planner for Portland General Electric. “The solar resources we see today versus even just our last RFP and IRP (in 2013) are much lower cost, and we’re seeing medium to large-scale development around the state.”
According to the U.S. Department of Energy, the price of utility-scale solar has fallen by half in the past five years.
Oregon’s Clean Electricity and Coal Transition Act, which set the state’s renewable portfolio standard, will require PGE and PacifiCorp, which does business in Oregon as Pacific Power, to source 50 percent of their electricity from non-hydropower renewables by 2040. Jeff Bissonnette of the Oregon Solar Energy Industries Association said the law could ultimately drive 4 gigawatts of new renewables in the state, and 1 gigawatt of it could be solar.
Whether solar is ready to compete for a piece of that pie immediately is an open question. PacifiCorp sought renewable energy bids earlier this year, only to determine that buying renewable energy credits was a less expensive way to extend its RPS compliance.
Solar should get another chance to prove itself next year, when PGE, looking to meet its RPS obligations and to make up for the end of coal generation at its plant in Boardman in 2021, hopes to put around 500 megawatts of renewable energy out to bid.
But utilities might not be big solar’s only customer. Avangrid – the new name for longtime wind developer Iberdrola’s Portland-based U.S. operations – has struck a deal to sell Gala Solar’s power to an unnamed Fortune 500 company. It’s the first time a big renewable energy plant in Oregon, solar or otherwise, has done a power purchase agreement with a non-utility customer.
“We’re looking to serve both types of customers in Oregon,” said Jesse Gronner, Avangrid’s vice president for business development.
In addition to the RPS, the Legislature gave utility-scale solar one more boost this past session, enacting a program that pays owners of plants 10 megawatts and smaller a half-cent per kilowatt-hour of energy produced in their first five years of operation. It’s not a windfall and the program will end after 150 megawatts of power are enrolled, but it could translate to around a quarter-million dollars in added revenue for a 10 megawatt plant, and GTM’s Smith said it could help some projects pencil out.