Engineers Forge a New Frontier for Solar: Utility Build-Transfer Agreements

2020-09-15T12:38:36-07:00

Historically, electric utilities in the U.S. have been buyers and sellers, but not producers, of solar energy. Largely due to tax and accounting constraints, vertically integrated, regulated utilities traditionally have entered power purchase agreements (PPAs) to procure solar energy (and wind and other renewable energy) from independent power producers (IPPs), rather than building such projects and including them in their rate base. To many utilities, this has seemed like a lost opportunity; they generally earn a return on the equity invested in power plants, transmission, and distribution lines, but not on power purchased from others. Dramatic reductions in the installed cost [...]