California, as most of you know, has a renewable energy target of 33% by 2020, one of the best around. However, if current trends are any indication of where the state is headed, it could blow past that target. According to a state regulator speaking this week on the matter, California’s proposed solar projects in 2011 were a whopping 4.5 times what the state needs to meet its 33% target. (As noted previously, the surge of renewable energy project proposals is actually causing huge traffic jam in the permitting process in California, and California is quite clear that it doesn’t need any outside help to meet its renewable energy goals.)
However, there is some concern about the projects proposed. First of all, only 6% of these projects have received approval from the California Public Utilities Commission (CPUC). Additionally, some insiders conjecture that firms are proposing projects that they won’t build themselves but will be sold to other solar power construction companies, and that the bids are too low.
“It does make me nervous,” commissioner Timothy Alan Simon told Reuters. “Is someone just bidding low to sit in the cue?” Mr. Simon believes projects submitted in the 7 cents per kilowatt hour range, for construction in 2015-2016, are unrealistically low, but he’s seeing such proposals come in.
Of course, low solar panel prices have helped solar installers and developers tremendously. And some may just be counting on increasing price declines, which we are also expecting. But I think an important point in the story above is that there’s a ton of competition in the solar marketplace right now, and developers are more than eager to make the most competitive, lowest bid (sometimes even unrealistically). Correct me if I’m wrong.
Note, though, that the CPUC is approving some beasts. I wrote 2-3 weeks ago on the news that it had just approved five renewable energy projects totaling 1,088 megawatts (huge, if you’re unfamiliar with the size of such projects).