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Solar Will Be Second-Biggest Source of U.S. Power Added in 2013

Solar power will be the second- biggest source of generating capacity added to the U.S. electric grid this year, according to Sharp Corp. (6753)’s Recurrent Energy unit.

“Solar is going to move into the No. 2 position in terms of new build, second only to gas,” Recurrent Chief Executive Officer Arno Harris said in an interview yesterday at the company’s main office in San Francisco.

Rooftop solar systems can be installed for about $4 a watt and utility-scale systems for $2 a watt, Harris said. “We can see our way to $1.50,” he said. “At those kinds of costs, we’re competitive in the Southwest with conventional electricity.”

Panel prices have fallen almost 69 percent in the past two years, benefiting companies such as Recurrent that purchase and install the equipment and sell electricity from the systems to utilities. Falling costs also have enabled developers to accept lower-priced contracts. First Solar Inc. (FSLR) has signed a power purchase agreement for a project in New Mexico that will sell electricity at a lower rate than new coal plants earn.

“Solar has clearly landed in a place where it’s a very bankable asset class and is widely accepted and sought after,” Harris said. “It’s going to follow the same path that other asset classes have followed, which is now a move to public capital markets,” and that may include real estate investment trusts, master limited partnerships or other structures that enable shares of project portfolios to be publicly traded, he said.

Buffett’s Role

Warren Buffett’s MidAmerican Energy Holdings Co. and NextEra Energy Inc. (NEE) are the largest U.S. owners of photovoltaic projects, including all stages of development from planning and permitting to commercial operations, according to data compiled by Bloomberg.

The U.S. in 2013 may add about 4.2 gigawatts of solar generating capacity using photovoltaic technology, according to data from the Solar Energy Industries Association, for which Harris serves as board chairman.

Photovoltaic systems totaling about 3.3 gigawatts were added in 2012, which was 76 percent more than in 2011. The amount of wind generating capacity added last year exceeded that of all other sources, including gas-fired power.

“Solar has moved alongside wind now as one of the three technologies -- solar, wind and gas -- that are going to be part of our nation’s energy build-out no matter what,” Harris said.

Sharp in 2010 bought then-closely held Recurrent for $305 million, and it plans to sell the unit as part of a restructuring plan that may include the sale of three television factories. Harris wouldn’t comment on the potential sale of his company.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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