Midwest U.S. could see a surge in solar installation in the next 10 years, Fitch says
Energize Weekly, October 23, 2019
The Midwest could see a surge in solar installations with 100 gigwatts (GW) of capacity being added in the next 10 years, according to management consultant Fitch Solutions Macro Research.
Fitch noted that there are already 546 proposed utility-scale projects with a total capacity of nearly 79 GW in the interconnection queues of the three grid operators in the Midwest – PJM Interconnection, Southwest Power Pool and the Midcontinent Independent System Operator.
The study looked at 12 states within the Great Lakes and Plains regions, which through the second quarter of 2019 accounted for only 4 percent of total U.S. installed solar capacity, according to the Solar Energy Industries Association (SEIA).
Fitch, however, projects that between 2019 and 2028, the region’s solar capacity will more than double to almost 175 GW.
“We expect strengthened renewable energy targets by cities, states and utilities, improvements in solar technology, the adoption of community solar programs, and increasingly competitive prices for solar power projects to be the key drivers of investments in solar power projects within the Midwest U.S.,” Fitch said.
While there are a large number of projects in the interconnection queues, many are placeholders and will not be built, the study said. Still, there are 6.6 GW of projects in the late planning stages or under construction with completion dates through 2023.
Bolstering Fitch’s positive outlook are a number of government and corporate steps being taken in the region.
Wisconsin Gov. Tony Evers signed an executive order in August 2019 creating the Office of Sustainability and Clean Energy, with the goal of achieving 100 percent carbon-free energy in the state by 2050.
“Governors and legislators in Illinois, Minnesota, Iowa, and Michigan are also calling for stronger renewable energy targets at the state-level,” the analysis said.
In 2019, several major Midwest cities also made pledges to transition to 100 percent renewable electricity over the coming decades, including Chicago and Madison, Wisc. – Wisconsin’s capital city.
“We expect additional governments to pledge stronger renewable energy targets in the coming years, supporting additional growth in the wind and solar power sector,” Fitch said.
Two of the largest utilities in the region – Minneapolis-based Xcel Energy and Detroit-based DTE Energy – have announced their own plans to be carbon-neutral by 2050, and even smaller utilities, such as Northern Indiana Public Service Co., are setting renewable energy targets.
Illinois, Missouri, Iowa and Nebraska utilities have all launched successful community solar programs in 2019, in which retail customers can buy a share of a ground-based solar installation. The capacity for the projects was quickly sold out.
The trend will also be helped by the continued improvements in solar technology, enabling better performance in the Midwest’s harsh winter weather, and what has been a steady decline in the cost of solar.
Improvements in the technology of solar power system components, including inverters, batteries, panels, tracking and racking components, have made systems easier to install and better able to withstand and operate efficiently in the harsh and cold conditions within the Midwest.
“The declining costs for installing both utility-scale and small-scale solar systems will continue to make projects an attractive investment for utilities, corporations, individuals, and communities within the Midwest,” Fitch said.