Factors Influencing the Development of Utility Scale Power in the United States

Abstract

In the last decade, the United States (U.S.) has experienced robust growth in the renewable energy sector. A variety of economic, political and environmental factors have been studied as possible drivers of solar energy adoption. This study examines the factors influencing the deployment of utility scale solar by using first a cross sectional model that measures solar adoption as of 2012 followed by an event history analysis that measures how long it takes for a utility in a state to first build a large solar plant. Three policies are found to be effective (both in the static and dynamic models) at encouraging the development of the first utility scale solar project. The first is a mandated solar carve-out (also known as a set-aside), which requires utilities to obtain a portion of their energy from solar technologies. The second is the presence of a credit multiplier which enables utilities to obtain additional renewable energy credits for either trading or if kept to meet their own renewable energy obligation. The third effective policy is the availability of tax subsidy schemes that provide tax relief to developers when renewable energy technology is adopted. One market and one regulation variable were also found to influence the deployment of solar power: growth in electricity demand relative to existing capacity and lower air quality in the form of ozone levels above national ambient air quality standards. Additionally two other factors are found to influence how long it takes for a utility to first integrate solar into their electricity portfolios: (1) having a Renewable Portfolio Standard (RPS) in effect which requires a certain percentage of the state's electricity to be derived from renewable sources and (2) resource endowment that provides higher solar technical potential in comparison to other renewable energy sources. As the visibility of large-scale solar power increases and states become interest in deploying solar technologies, the findings in this thesis may assist policy makers in choosing the most effective policy tools that support the still fragile solar industry.