Renewable energy finally makes sense as a utility—and that’s why it’s becoming a threat to coal.
When it comes to innovation, businesses often follow the lead of government. Take large-scale renewable power—especially solar. Before the 2009 stimulus package, solar power was nowhere in this country. But the same program that brought us the Solyndra debacle offered loan guarantees for the first efforts to build truly massive, utility-scale projects—ones that could supply massive quantities of energy and theoretically replace plants fired by fossil fuels. Those projects worked. America now is home to the world’s two largest solar plants. California’s Desert Sunlight and Topaz facilities each have a capacity of 550 megawatts. Both were made possible by Energy Department loans.
Once the technologies were proven, and the costs began to come down, investors and operators stepped in. Companies put up plants, and then made deals with utilities to buy the output—often at a price above the cost of electricity created by coal plants. Utilities complied in part because of state requirements that they source a certain percentage of their electricity from renewable sources.