How utilities helped the U.S. solar market grow: 10 years of SEPA’s Top 10

On April 26, the Smart Electric Power Alliance (SEPA) will release the initial results of its 10th annual Utility Market Survey with the announcement of 2017’s Utility Solar Top 10 lists, honoring the utilities that put the most new solar capacity on the grid in 2016.

Such anniversaries, by their very nature, are a time for reflection — on where we started, what we’ve accomplished and the challenges ahead. This year, for example, we are launching a new Top 10 list recognizing the utilities that put the most new energy storage on the grid last year.

Back in 2007, few people in our industry would have thought such a list possible. The rapid development of solar markets in the U.S. was still barely on the horizon —- the falling prices, the rapid rise of distributed energy technologies, and the growing demand for clean energy among consumers.

In fact, when SEPA — which then stood for the Solar Electric Power Association — came up with the idea for the original survey and Utility Solar Top 10 list, one of the main challenges was finding enough utilities with enough solar to provide us with measurable data.

The first Top 10 list, released in 2008, collected cumulative information on all the solar the 50 respondents had interconnected by the end of 2007. Southern California Edison claimed the No. 1 spot with 409 megawatts (MW), while No. 10, Long Island Power Authority in New York, managed to get on the list with 5.3 MW.  Many utilities reported less than a megawatt.

Figure 1: The original Top 10 list published in 2008

Why start a Top 10 list with such small numbers? SEPA President and CEO Julia Hamm saw two reasons.

Even in 2007, “the storylines were that the utilities were the barrier to solar,” Hamm recalled. “We wanted to highlight that this was hard for them. It requires a total change of business practices to interconnect solar, especially the small rooftop systems, and we should really recognize and give positive feedback when they are able to accomplish that.”

Focusing on industry leaders would also provide examples for other utilities, she said. The list “shows the industry that it’s possible. Whatever the challenges with solar, utilities can figure out ways to manage them,” she said.

How utility-scale solar arrived

While recalled in hindsight, Hamm’s original vision continued to come to mind as I read nine years of surveys — from 2008 to 2016. After 2008, the yearly survey and Top 10 lists were based on the new solar that utilities connected to the grid during the previous year — both total megawatts and watts per customer — rather than the cumulative figures to-date collected in the original report.

Based on these yearly figures, the past decade breaks into two distinct phases, reflecting the ongoing changes in the U.S. solar market, the utility sector and SEPA itself, as the organization expanded its mission to include distributed energy resources (DERs).

The first phase — roughly from 2008-2013 — the annual reports document the growth of utility-scale solar — and utilities’ embrace of these large-scale projects — as primary market drivers.

The early reports are extremely granular, with detailed examinations of the solar portfolios of almost every utility on the list — how much residential, commercial and utility-scale each had. Survey results were further broken down by region — we had East, Central and West Top 10 lists — and utility type, either investor-owned or public, which initially included both municipals and electric cooperatives.

Figure 2: In 2014, a new look for the Top 10

What’s beneath this onslaught of facts and figures, clearly, was a keen interest in showing which U.S. utilities were putting increasing amounts of solar on the grid and exactly how they were doing it. The watts per customer list, in particular, developed as a place where small electric cooperatives and municipal utilities could be recognized for their initial, often innovative forays into solar. With low numbers of customers, even a relatively small project could secure these utilities a spot on the list.

Mike Taylor, who was then SEPA’s Director of Research, also remembers these reports as “boot-strappy” efforts. SEPA had only a small number of employees in 2008, and Taylor, who is now SEPA’s Principal of Knowledge, produced the first reports pretty much on his own as Word documents with very rudimentary graphics.

The 2014 report — based on figures from 2013 — signaled the transition into a new phase, with utilities and the general public increasingly looking at solar as a least-cost, mainstream power source. Close to 300 utilities provided data for the report, reporting more installations across the U.S. than any other kind of generation.

For the first time, the No. 1 utility on the Top 10 list — Pacific Gas & Electric — had interconnected more than a gigawatt of solar in the previous year — 1.4 GW — while the No.10 Duke Energy Carolinas had installed 58 MW. Utility-scale had surpassed residential as the largest sector of the U.S. market, and both the ceiling and floor for the Top 10 list were continually rising.

Since then, basic data gathering has remained the foundation of SEPA’s annual Utility Market Survey and Top 10 lists — for megawatts and watts per customer. But a new focus on data analysis and market trends reflects the industry’s increasing sophistication.

The survey has been repeatedly expanded to ask questions about solar’s impact on utility business models, and the kinds of technologies and programs utilities might be considering going forward. Recognizing that we cannot talk about solar in isolation, SEPA researchers are asking more utilities for more information on such questions each year.

In 2014, the annual report became the Solar Market Snapshot, with SEPA’s growing research and marketing teams producing eye-catching graphics surrounded by more concise, punchier text.

The exponential speed of change in the market had become a central issue for many utilities. In a prescient note, the 2014 report warned that those “in smaller markets may think they can watch, learn and respond once solar achieves a greater penetration, but they may find that solar markets and innovation grow more quickly than they or the regulatory process can respond.

Net metering, rate reform and the rise of DERs– including storage, demand response and electric vehicles — became issues with ongoing movement toward solutions ever on the horizon. We also saw solar market growth move from West to East as an increasing number of southern utilities appeared on this list, along with an explosion of interest in community solar.

The 2016 report notes that utilities had passed a major industry milestone, interconnecting more than one million solar installations to the grid.  Our 2017 report marks a milestone for SEPA, with about 400 utilities participating in this year’s survey. This year’s ceiling and floor on the Top 10 list for new megawatts run from more than 1,600 MW to just under 200 MW.

Where will we be in another 10 years? As in 2007,  what will unfold as solar and other DERs continue to reshape the grid can barely be imagined.