Source:energyportal.eu
Utility-scale solar is set to surpass coal in North Carolina’s net electricity generation due to the declining costs of solar deployment. However, the state’s leading position in solar deployment may be challenged in the coming years.
According to a blog post by the North Carolina Sustainable Energy Association, the decreasing cost of solar has made it the most affordable form of energy, rendering coal financially non-competitive. In 2021, solar accounted for 8.5% of total electricity generation, while coal’s share dropped to 10.9%.
In the fourth quarter of 2021, utility-scale solar exceeded coal in net electricity generation, with solar contributing 6.8% and coal accounting for 5.5%. This trend persisted in the third and fourth quarters of 2022 as well.
The Lawrence Berkeley National Lab has reported that the median installed costs of photovoltaic (PV) systems in the US have decreased by 76% since 2010. This increased affordability, in combination with the efficiency of solar panels and favorable state policies, has significantly impacted North Carolina’s energy landscape.
Conversely, the rising cost of coal can be attributed to supply chain disruptions and cost volatility during the COVID-19 pandemic. As a result, the state has retired some coal facilities, with the rest of the coal fleet scheduled to be retired by 2036.
Policies have also played a crucial role in this shift. The Renewable Portfolio Standard (RPS), established through Senate Bill 3 in 2007, mandates that a certain percentage of North Carolina’s electricity must come from renewable sources. By 2021, each public utility should ensure that 12.5% of their retail sales are generated from renewable sources. Electric membership corporations and municipalities are also required to provide 10% of their retail sales through renewable energy.
As of the first quarter of 2023, North Carolina had an installed solar capacity of 8,407MW, ranking fourth for total installed solar capacity. However, the Solar Energy Industries Association (SEIA) predicts that the state will only rank 30th in the nation for total solar deployed (1,682MW) over the next five years. This decrease in ranking may affect North Carolina’s position in the national solar deployment leaderboard.
The increasing affordability and efficiency of solar panels, along with supportive state policies, have fueled the rise of solar energy in North Carolina. While utility-scale solar has overtaken coal in net electricity generation, the state will need to address potential challenges to maintain its leading position in solar deployment.
