Sandhya Ganapathy, CEO of EDP Renewables North America, stated that large-scale solar developers in the US have exhausted the easily attainable opportunities.
Ganapathy explained that EDP Renewables North America has deliberately pursued a diverse portfolio of solar, storage, and wind projects across various states in the US. This strategic approach combines ambition and pragmatism.
In an interview with PV Tech Premium, Ganapathy emphasized the importance of aligning with demand, transmission infrastructure, and emission reduction goals. This entails expanding their presence in states, both in terms of land and communities. She highlighted that EDP Renewables North America is not limited to major markets such as California and Texas’ ERCOT network, but is actively exploring opportunities in other regions as well.
Ganapathy revealed that EDP Renewables North America has observed significant demand from states with high emissions, such as Kentucky and Michigan, which are historically known for their reliance on fossil fuel production and heavy industry. Despite the company’s recent activities in Mississippi, Arkansas, and Illinois, it recognizes the potential in these “super high-emissions states” and aims to explore opportunities in these regions as well.
Ganapathy explained that the progress in expanding into new areas is facilitated by the tax credits provided under the Inflation Reduction Act (IRA). These tax credits specifically support the development of renewable energy projects in low-income areas or communities that have retired existing energy facilities, commonly referred to as “energy communities”. The IRA tax credits play a crucial role in enabling the company to establish renewable energy projects in these designated areas.
Nevertheless, the increasing demand for renewable energy in the US has not been without challenges, as evidenced by a recent setback in one of the states mentioned by Ganapathy.
In a recent development, Louisville Gas & Electric (LG&E) and Kentucky Utilities (KU), two electricity utilities based in Kentucky, unveiled their plans to construct two new natural gas facilities in the state. These plans also indicated a delay in adding new solar PV capacity until 2035, with the intention to reconsider only if solar prices become more economically competitive or if utility customers demand an enhanced solar plan.
Despite acknowledging a significant increase in demand from data centers within the state, the utilities argued that solar PV alone would be insufficient to meet the projected surge in grid load. As a result, they concluded that alternative solutions would be necessary to address the growing demand.
According to a report released in October by the Lawrence Berkeley Laboratory, it was found that the energy community tax credits provided by the IRA had not yet had a noticeable impact. In fact, the report highlighted a 3% decrease in the number of projects over 5MW built in those designated areas since 2021.
Community solar, while not initially perceived as an easily attainable development opportunity, is predicted to have a varied trajectory in the coming years. A report by Wood Mackenzie and the Coalition for Community Solar Access (CCSA) indicates that the US community solar market is expected to experience an average annual growth rate of 5% until 2026. However, it is projected to contract by approximately 11% per year from 2027 to 2029. This decline is attributed to the uncertainty surrounding the reliability of IRA incentives, as stated by a representative from CCSA.
Despite the challenges mentioned earlier, the overall outlook for community solar, as well as solar energy in the United States as a whole, remains positive. It is projected that the community solar market will reach a capacity of 14GW by the end of the decade, indicating significant growth and potential for the industry.
