Utility-Scale Solar Power: The Future of Grid Power Generation
Utility-scale solar will be key in reducing the world’s overreliance on fossil fuels. Over the past two decades, the costs of photovoltaic cells have declined precipitously, making solar technology a cost-effective solution in most parts of the country. As grid-scale solar power goes mainstream, it’s worth defining and classifying the term among other solar power generation systems.
What Is Utility-Scale Solar?
A utility-scale solar farm is any facility that generates electricity through solar cells and feeds that electricity into the grid. Industry associations get more granular with their definitions, however. The Solar Energy Industries Association defines solar as “utility-scale” when it exceeds 1 million watts (or 1 megawatt) in name-plate capacity. The National Renewable Energy Laboratory has even higher requirements, defining utility-scale as 5 MW of capacity or more.
Rooftop Solar vs. Utility-Scale Solar
To be clear, both rooftop solar and utility-scale solar have important roles to play in decarbonizing the US energy grid. Utility-scale solar projects have considerable advantages - and challenges - over rooftop installations.
Large-scale solar are much more efficient than rooftop systems because they produce more total output at a lower cost per kilowatt hour (kWh). They also require less maintenance and repairs per watt than rooftop installations, although all kinds of solar have lower long-term operational costs than natural gas turbines or coal-fired power plants.
Related: Is Solar Power Worth It in Michigan?
The Future of Grid-Scale Solar
There are more than 37,000 MWs of utility-scale projects in the US, with another 112,000 MS under development. The US solar industry has grown tremendously over the past several years, adding a record 15 gigawatts (GW) capacity in 2023, a 60% increase from the prior year. Much of that added capacity occurred in Texas as the Electric Reliability of Council of Texas (ERCOT) raced to increase renewable generation to meet the state’s increased electricity demand.
It’s not all in Texas, however. Midwest capacity grew an incredible 224% year-over-year in 2023, with the East Cost adding 150%.
Solar Industry Challenges
There’s a reason rooftop solar projects will play such an important role going forward. Grid-scale solar faces tremendous upside, but substantial barriers.
Land-use. Large-scale solar facilities require tens of thousands of acres to achieve optimal efficiencies. That footprint can have negative environmental impacts, such as affecting animal migratory patterns and habitats. There’s also an opportunity cost; that land could be used for housing, commercial development, or agriculture.
Competition. Historically, China has dominated the photovoltaic manufacturing industry, providing low-cost panels severely undercut domestic production. Spurred by national investment, Chinese companies appear to have saturated the market; in 2024, key components like polysilicon, wafers, and finished cell modules are selling below production costs. Aside from production, geopolitical factors, including expensive US import tariffs, make competition and supply hard to forecast in the years ahead.
Regulation. From land use to financial considerations, the solar industry faces lingering regulatory hurdles that have slowed adoption in many parts of the US. Utility-scale solar power facilities often face community pushback to the degree that it slows the permitting process, even when the developer has followed existing guidelines. The elevated interest rate environment between 2022 and 2024 has also restricted access to capital investment just as pandemic-era supply chain snarls resolved.
Despite these challenges, the solar industry looks bright. From 2023 to 2025, total solar power generation is expected to grow 75% to 286 billion kWh. Still, many local businesses are racing ahead of the wider market. Rooftop solar installations provide affordable, reliable electricity at below-utility costs.
Solar Power At Your Scale
Keen Technical Solutions is Northern Michigan’s most trusted, experienced solar installation contractor. We’ve helped businesses from across industries with on-site solar, wind, and battery storage equipment backed with an expertly designed management and control system. Take control of your energy environment; contact a Keen representative today to get started!