Onshore wind is the largest and cheapest source of renewable power in the U.S. today, but solar is catching up quickly. No one is more aware of that urgent reality than the wind industry itself.
Renewables markets long dominated by wind, including Texas, are set for a wave of solar projects over the next few years. Many of the country’s largest wind developers are amassing in-house solar teams.
Amid these changes, the American Wind Energy Association (AWEA) trade group announced Tuesday that its flagship annual Windpower conference and exhibition will expand to include solar and storage, starting next year in Denver.
“We actually hear from many of you that you do as much solar business at Windpower as you do wind business,” AWEA CEO Tom Kiernan told the conference, held this year in Houston. “That’s great; we like that.”
While wind will still be the main focus, starting next year AWEA’s event will adopt a new “overarching conference structure” called Cleanpower, Kiernan said, with dedicated exhibition space and programming for the solar and storage sectors.
“It will be your hub for doing clean power business going forward,” he said.
For many in the wind business, the move feels like a natural evolution.
“More and more we’re talking about clean energy — putting together onshore, offshore, solar, starting to incorporate storage,” said Jose Antonio Miranda, CEO for the Americas at wind turbine supplier Siemens Gamesa Renewable Energy.
Increasingly, “there’s a tendency for companies to concentrate on all of them, not only one,” Miranda told Greentech Media.
Blurring of lines
The U.S. wind industry stands at one of the most important junctures in its history, and in many respects it’s never been in better shape.
There are 39 gigawatts of wind either under construction or in advanced development in the U.S. right now — the equivalent of building all the existing wind farms in Texas, Iowa and California over again.
Wood Mackenzie Power & Renewables predicts 25 gigawatts of new capacity will be installed in 2019 and 2020 alone, shattering previous records and straining the supply chain.
Meanwhile, the offshore market is just beginning to take off in U.S. waters, drawing in some of the world’s most important clean-energy investors, including Shell New Energies.
Yet beneath this flurry of activity runs a strain of anxiety about the future.
The production tax credit (PTC) — the U.S. wind market's main subsidy — will expire for all new projects after this year, and the chances of another extension look slim.
For its part, the solar investment tax credit is phasing down on more favorable terms, with the ITC set to remain permanently at 10 percent even as the wind PTC disappears entirely. That’s an advantage for solar in the 2020s and perhaps beyond.
By the time the last PTC-eligible wind farms are built, utility solar will be competitive with wind in five of the top 15 state wind markets – including Texas, Colorado and New Mexico, according to WoodMac.
Solar makes for a more natural partner for battery storage in many situations, and its generation profile means that it may be more valuable in some markets even if it’s not cheaper.
“We’re now moving into a world where utility solar becomes the number one competitor to onshore wind,” Colin Smith, senior solar analyst at WoodMac, said recently.
Unsurprisingly, many wind companies are diversifying into solar.
NextEra Energy, the nation’s leading wind developer and operator, has become a leading solar developer as well, running head to head with First Solar.
Orsted, the Danish offshore wind company, earlier this month acquired solar and storage developer Coronal Energy through its Lincoln Clean Energy subsidiary. Invenergy, EDF and RES — all long-standing powerhouses in the U.S. wind market — have pushed aggressively into solar in recent years.
Even wind manufacturers like Vestas are finding ways to branch into solar and storage.
"The number of our member companies identifying as pure wind is on the decline, and that's true even of the [manufacturers]," Robert Hornung, president of the Canadian Wind Energy Association, told AWEA's conference on Wednesday. "And customers are becoming more technology agnostic — we're seeing less wind-only [request for proposals] and more renewable RFPs."
Wind's transmission problem
A number of factors will impact wind’s ability to compete with solar in the 2020s. One of the most important — and potentially most frustrating — is the availability of transmission lines.
Simply put, the best places to build wind farms in the U.S. are far from population centers, and it’s getting harder and more expensive to deliver the power.
Solar, in contrast, tends to be easier to site closer to cities or existing transmission infrastructure.
While there are a number of high-profile transmission projects in development that would bring wind power from the country’s interior towards the coasts, wind developers are beginning to doubt whether such projects will pay off in time.
“It’s just unbelievably hard as you go across state lines,” RJ Johnson, vice president for origination at NextEra Energy Resources, said last week at GTM’s Solar Summit in Arizona.
“You have to have large organizations, lots of community support, and a lot of local, state and federal support for those long transmission lines. It’s billions of dollars and 10, 12 years of time,” Johnson said.
“I think localized renewables with some storage is going to be cheaper in the long run.”
Developers are much more optimistic about the prospects for smaller transmission upgrades, particularly in light of the ongoing political dialogue around the need for infrastructure investment. AWEA has made transmission one of its top priorities in Washington DC.
“I would say the grand plans to connect Wyoming to California are going to be incredibly difficult to pull off,” Hans Isern, senior vice president for origination at sPower, said last week in Arizona.
“But I do see a lot of demand for those incremental, smaller transmission upgrades — the ones managed by a single entity in a single [regional transmission organization] that solve specific problems. Those will go forward.”
Even as the wind industry pivots towards solar, it’s not giving up on its bread-and-butter energy source.
“I think you’re still going to have a very strong wind market from the Dakotas down through Texas,” Johnson said of the 2020s. “It’s just a great resource.”
In those central regions, wind will “still be more competitive” than solar after the PTC has gone away and the ITC has phased down to 10 percent, he predicted. “On the coasts, you’re just going to see a lot more solar.”
No one knows exactly what the wind market will look like in the 2020s. But one assumption is safe: Expect to hear a lot more talk about solar at wind conferences.