Massive Solar Project
by Sammy Roth
First Solar is moving forward with plans to build a massive solar farm in eastern Riverside County, more than seven years after it first proposed the 4,800-acre, 300-megawatt Desert Quartzite solar plant.
The company's decision to forge ahead with the long-delayed project could be a sign that California's large-scale solar industry, which has slowed over the past year, still has opportunities for growth -- even if a 30 percent federal tax credit expires at the end of 2016. But Desert Quartzite is a long way from becoming a reality, and experts caution that losing the tax credit would still spell trouble for the industry, at least in the short term.
The federal Bureau of Land Management announced last week that it would begin the permitting process for Desert Quartzite, which would be built on public land southwest of Blythe. The agency will hold public meetings later this month in Blythe and Parker, Arizona, before starting work on an environmental impact report.
Whether or not federal officials ultimately approve Desert Quartzite, the fact that First Solar wants to move forward with the project at all might bode well for California's large-scale solar industry.
Several enormous solar farms have come online in California's deserts over the past year, including the 550-megawatt Desert Sunlight project, the 280-megawatt Mojave project and the 250-megawatt Genesis project. Desert Sunlight, which is in eastern Riverside County, is the world's largest solar power plant.
But despite a recent flurry of solar plant openings, the pipeline of large-scale projects in California has been drying up. In Riverside County, several projects have been stalled or delayed for months or years, and others have been dropped by their developers.
That slowdown has been driven in part by the planned expiration of the 30 percent federal investment tax credit, which is scheduled to drop to 10 percent in 2017. At the same time, California's major utilities are already close to meeting the state's renewable energy mandate, which requires them to buy 33 percent of their electricity from renewable sources by 2020. That means they have less incentive than ever to sign contracts for large-scale solar projects.
Solar advocates have lobbied Congress to extend the 30 percent tax credit, but that looks like a long shot, especially if Republicans retain control of the House of Representatives.
"Given the importance of solar energy to both the economy and environment, we're still hopeful of getting the 30 percent (tax credit) extended by Congress," Ken Johnson, a spokesman for the Solar Energy Industries Association, said in an email. "If it's not, and it drops to 10 percent, then 2017 is going to be a very difficult year."
Meanwhile, California policymakers have been discussing a 50 percent renewable energy mandate that could spark renewed demand for large-scale solar projects. But a new legislative mandate probably wouldn't take effect until after 2020, leaving several years in which large-scale solar could continue to lag.
What's notable about Desert Quartzite is that First Solar knows there's no chance of bringing the project online by the end of 2016, meaning it won't qualify for the 30 percent tax credit unless Congress acts. The fact that First Solar is moving forward anyway might reflect the falling costs of solar plants, which are increasingly competitive with natural gas-fired power plants.
"2014 was really the first time in which we saw a meaningful volume of utility-scale projects land contracts not to simply meet regulatory obligations, but because of its relative competitiveness in the broader electricity market," said Cory Honeyman, a solar analyst for GTM Research, a clean-tech consulting firm.
Still, Desert Quartzite is far from becoming a reality. Even if the Bureau of Land Management approves the project, First Solar isn't likely to start construction unless it finds a buyer for the electricity the project would generate.
It's possible, Honeyman said, that First Solar is positioning Desert Quartzite as a replacement for a proposed renewable energy project that already has a contract to sell its electricity. Those projects sometimes fall through, which could leave a utility scrambling to meet its 2020 clean energy obligations.
It's also possible that a private company will agree to buy the power generated by Desert Quartzite, which has become increasingly common as California's utilities approach their 33 percent targets. Health care giant Kaiser Permanente said last month it would buy 110 megawatts of solar electricity from a Riverside County solar project, following similar announcements by Google and Apple.
Desert Quartzite "really fits the mold of being another project that could be marketed to another Fortune 500 company," Honeyman said.
Regulators could also require utilities to purchase more renewable energy before 2020. Under state law, the California Public Utilities Commission could mandate renewable energy procurement above the 33 percent mandate, a step the commission has said it will consider this year.
If the commission does mandate new procurement, it could help ensure that projects like Desert Quartzite get built, said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies, a Sacramento-based renewable energy advocacy group.
"Another 300-megawatt solar project in a community that's disadvantaged and could use some jobs?" White asked. "Sounds like a good thing to be doing."
Especially as solar power become cheaper, White said, it doesn't make sense for utilities to stop buying solar once they've reached their 33 percent goals.
"Why do we have to stop?" he asked. "I think the utilities were a little too quick to congratulate themselves."
Environmental groups often object to large-scale renewable energy projects in the desert, and it's possible that will be the case for Desert Quartzite. Ileene Anderson, a senior scientist with the Center for Biological Diversity, said the project could overlap with sand dunes that serve as habitat for the Mojave fringe-toed lizard, which the California Department of Fish and Wildlife considers a "species of special concern."
Still, First Solar might be able to configure the project in a way that avoids seriously impacting the lizard's habitat, Anderson said. Large-scale solar projects generally require about eight acres per megawatt, according to the National Renewable Energy Laboratory, so Desert Quartzite might ultimately take up just half of the 4,800 acres being proposed.
"It seems like there may be some flexibility in there, with them applying for such a large area," Anderson said.
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