Solar is becoming an increasingly appealing proposition to US utilities beyond just the need to meet state-mandated obligations, according to GTM Research.

In a new report, GTM Research says that the majority of utility photovoltaic (PV) procurement between now and 2020, will be fueled by drivers beyond the state-level Renewable Portfolio Standards (RPS). This is supported by the extension of the federal Investment Tax Credit (ITC) beyond 2016.

While projects procured by utilities to meet RPS requirements account for the bulk of the US’ current installed utility-scale PV capacity, 52% of all utility-scale solar that will built in 2016 will be outside of the RPS. The report projects that the US will add more than 6 GW of non-RPS utility solar this year, above the 4.1 GW direct current (DC) installed by the entire utility-scale segment in 2015.

Solar Appealing to Utilities

According to GTM Research, the shift is due to two factors — the falling costs of solar and the price stability it offers. Power purchase agreement (PPA) prices now range between USD 40 (EUR 37) and USD 60 per MWh, the firm notes.

It has identified three major non-RPS market drivers. These include voluntary utility procurement and retail customer procurement with a growing number of corporation powering facilities with off-site solar. The third is qualified facility development enabled through federal legislation called PURPA (Public Utilities Regulatory Policies Act).

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