Solar power is exploding in the United States and globally, for good reason.
The cost of developing solar power sites has decreased consistently, making it affordable for companies and communities alike. More importantly, solar has emerged as a low-cost energy option compared to other sources, including traditional fossil fuels.
International Renewable Energy Agency (IRENA) data suggests solar energy’s weighted average LCOE was 56% less than the least-cost weighted average fossil fuel in 2023. And as technology improves, solar costs could keep falling.
The global data is encouraging, but domestic stats are even brighter. According to the Department of Energy (DoE), solar generates about 5.3% of our nation’s electricity. As you’d probably expect, utility-scale installations provide most of the power.
At first glance, solar energy’s 5% share doesn’t seem like much, but it includes thousands of sites nationwide.
The Solar Energy Industries Association (SEIA) tracks more than 7,200 solar projects nationally, totaling more than 250 GWdc. Of those in the system, about 137 GWdc are in operation, while the rest are under construction or development.
And these installations aren’t one-size-fits-all solutions, either. Projects come in all shapes and sizes and depend on several factors, including size, location, purpose, and end users. Newer installations are also more technical, opting for battery storage to maximize each day’s energy.
But what is considered a large-scale installation? According to the Energy Information Administration, the threshold is 1 MW of electricity. Using this as our yardstick, you’re likely to see one of three types of projects: commercial, community, or utility.
From factories and schools to hospitals, malls, and businesses, commercial solar (AKA industrial solar) is a low-cost way to keep the lights on.
Most buildings don’t utilize their rooftop space, making it an ideal spot for solar panels. If the rooftop isn’t suitable, ground-mounted systems nearby can generate power.
So, why would companies, schools, and buildings choose commercial/industrial solar?
Affordable Energy – Many tax incentives are available through state and federal programs. As the country pushes toward its carbon-neutral goals, these programs are critical for renewable energy adoption. Known as Investment Tax Credits (ITCs) and Production Tax Credits (PTCs), businesses, nonprofits, and governments receive incentives for developing solar projects. Rebates also reduce the cost of solar energy.
Price Stability – With more solar power, businesses see fewer price fluctuations based on energy prices. Years of low-cost renewable power help offset the upfront costs tied to development.
Scalable Energy – When the facility or building expands, so can its solar farm. Adding solar panels generates more power for machines, lights, and electronics.
Self-Sustaining Grid – In an emergency or power outage, buildings can detach from the grid. By acting as a microgrid, the building still has access to electricity, avoiding downtime or potential issues.
Sustainability – Solar panels produce no harmful byproducts while generating electricity and rely on an infinitely renewable resource as their fuel.
Rather than serving the purposes of one company or facility, community-scale solar serves a small population.
These localized projects can be either community-owned or shared. Community-owned installations mean the stakeholders are the owner and the operator – they manage the system and electricity generated. Community-shared projects are more common, as a utility or third party owns the installation. Individuals and businesses then sign up as partial owners or subscribers.
During operation, these installations produce a few megawatts of generated power – enough to electrify hundreds of nearby homes.
The allure of community-scale PV system is its accessibility.
Some people want to support renewable energy but can’t afford to invest in a residential solar system. Community solar lets customers subscribe to or own some of the power generated.
Homeowners renters, businesses, and other groups pay to subscribe to the system. This allows them to have a share of the power generated by the project. Utilities then pay the solar operator for the power, with subscribers receiving credits toward their monthly electric bill.
Community solar is unique because anyone can be an owner. They’re easy to subscribe to, unsubscribe from, and participate in without confusing policies and rules.
Additionally, like industrial/commercial solar systems, community-scale projects can quickly detach from the grid. When emergencies occur, it can become a microgrid, maintaining power for the local area.
While keeping the lights and heat on is great for consumers, utilities also benefit. When systems disconnect from the grid, it’s easier for crews to pinpoint where outages are, reducing overall downtime.
Compared to community-scale solar projects, utility-scale installations are MASSIVE.
These mega systems can generate hundreds of megawatts, powering thousands of homes across a region. Owned by utilities, solar operators, or the government, they supply mass amounts of power to the larger electrical grid for general use.
Power is supplied by utility companies, who enter into long-term Power Purchase Agreements (PPAs) with solar operators. This helps the utility minimize price fluctuations and volatility and gives the operator a steady income.
Recently, large companies, including several tech giants, have joined utilities by signing PPAs of their own. The contracts allow companies like Amazon, Microsoft, Meta, and Google to meet ever-increasing power demands while addressing their carbon initiatives.
It may seem strange that tech companies are leading the solar revolution, but they use vast amounts of power. Artificial intelligence, for example, has integrated itself into everything from smartphones and search engines to chatbots and cars. The technology is powerful but uses a lot of energy.
Tech companies face a difficult question: how do they continue improving technology when AI and data centers are energy pits? The answer may come from renewables, which effortlessly add renewable electricity to the grid.
Utility-scale solar arrays comprised about two-thirds (65%) of U.S. solar capacity in 2023. While the total is impressive, experts believe it could rise to 70% by 2030.
Several states, including Texas, California, and Florida, have embraced renewable technology. In August 2024, the three states held nearly half of the nation’s solar installations, thanks to ample sunshine, green energy initiatives, and incentive programs.
Utility solar can also breathe new life into old and abandoned sites. Arrays can occupy a lot of space, but solar developers have been clever about what areas they build in. They often look for cheap land that won’t work for traditional development, like brownfields and abandoned mines. Not only is the land perfect for solar, but it’s often near established infrastructure and grid connection points.
Utility installations also benefit from battery technology. Energy storage systems can hold generated electricity for later use, like at night or on cloudy days.
Solar energy has improved immensely in a short amount of time, cementing its place in the energy portfolio.
Like other clean energy generation methods, solar is more variable than fossil fuels like natural gas. Thankfully, battery storage technology has improved dramatically, making it easier for arrays to store energy for later. The result is a growing number of “solar + storage” facilities keeping the lights on with clean power.
As concerns about steady energy production dissipate, more people and companies will embrace clean, renewable solar power. More importantly, once utilities address ongoing interconnection issues, the grid should be fully capable of handling new sites.
Current substations and grid interconnection points don’t easily support solar and wind. Substation retrofits can bring new sites online and bolster the energy supply.
Solar energy has become a critical piece of the U.S. energy pie.
It powers homes and businesses, revives brownfields and abandoned sites, and creates hundreds of thousands of good jobs. More importantly, solar is paving the way for more innovation, impact, and energy efficiency.
The country is moving fast toward reducing its carbon footprint, but it can’t happen without investments in emerging technologies. Solar has the potential to be a fantastic complement to fossil fuels because it’s clean and renewable.
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