The Great Solar Repowering

All across the United States, solar panels are withering on the vine. Equipment installed 10 to 15 years ago is still capturing sunlight and pumping out electricity, but significantly less of it than when the cells were new.

This is not a story about decline, however, but about growth. America’s aging solar farms represent an opportunity to expand clean energy capacity without using more land — and potentially without having to wait years for new projects to get through the grid’s interconnection queue.

Modern panels can produce as much as 70% more energy than new ones sold 20 years ago, according to Wood Mackenzie. A report published Monday estimates that “repowering” existing solar farms, or replacing old panels with new ones, could unlock about 9.6 gigawatts of solar power by 2030, 29 gigawatts by 2035, and 67 gigawatts by 2040. (For comparison, the U.S. added 27.2 gigawatts of utility-scale solar last year.) If every project up for repowering between now and 2040 installed batteries, as well, that would add up to 13 additional gigawatts of storage to the grid by 2030, and nearly 92 gigawatts by 2040. The U.S. has just over 50 gigawatts of storage online today.

That means repowered solar farms could supply about a third of the growth in peak demand the North American Electric Reliability Corporation expects to be driven by data centers by 2035, the report found.

“Solar is entering its first replacement cycle at this moment when we are seeing a structural increase in demand,” Lisa Hansmann, the director of energy company Foundry-Logic and one of the paper’s authors, told me. “The more we dug in, the more it became clear that this market is early, but it is fast growing and ultimately could be very large.”

Advances and cost declines in battery technology are key to harnessing this generation potential. If a developer wants to increase the output of their solar farm, they’ll likely have to get a new interconnection agreement, which can take years. Adding a battery to ensure the plant doesn’t send more power to the grid than it was initially approved for can help avoid that, although it depends on the specs of the project, the location, and regional regulatory requirements.

Foundry-Logic, which published the paper in partnership with the clean energy finance company Crux, is focused on “getting more out of the installed base of energy systems.” The paper, in other words, is essentially Foundry-Logic’s sales pitch. It estimates that when combined with battery storage, repowering will represent a $10.8 billion market in 2030, growing to $51.8 billion by 2040.

The estimates are certainly on the high end of what’s possible, however, as the authors looked at technical potential rather than regulatory or economic feasibility. While the first half of the paper highlights the reasons repowering can be so attractive — existing interconnections, land leases, and permits — the second half digs into the real-world conditions that complicate that narrative.

The Federal Energy Regulatory Commission requires regional transmission organizations to offer “surplus interconnection service,” rules that allow new generators to skip the interconnection queue if they connect to the grid using the same infrastructure as an existing power source, so long as there’s “surplus” room to connect at that node. The rules vary throughout the country, however. The paper finds that the Midcontinent Independent System Operator, which covers much of the Midwest, has the most favorable regulations for repowering, followed by the Southwest Power Pool, which covers the swath of the country between Montana and the Texas panhandle. In the nation’s largest transmission region, PJM, the surplus interconnection process has historically taken nearly as long as the queue, but the regional operator recently indicated it’s considering reforming the process.

Requirements also vary widely depending on the type of project — utility-scale versus smaller solar farms versus rooftop arrays — as well as by state and region. Utility-scale projects require interconnection agreements from regional transmission operators, while smaller projects connect at the local distribution level with permission from the relevant utility.

“Policy is evolving to meet the market demand for speed to power, and that's one of the things we tried to highlight too,” Josh Price, the director of market intelligence and research at Crux, told me. Because of the data center buildout and surging energy demand, he said, state regulatory commissions have started to push their utilities to examine their distribution systems, identify where there’s available interconnection capacity, and create rules or pilot programs to leverage it.

Price added that another advantage to repowering projects is that developers don’t have to start the financing process from scratch. In most cases, they already have a lender, an equity sponsor, and potentially a tax equity partner. They might need to renegotiate terms, but they also have 10 to 15 years of real-world data into how solar performs at the site, making it a less risky investment than a brand new development.

I spoke with one solar farm operator, CleanCapital, which owns many smaller sites throughout the country that were built in the early 2010s “and are needing more love,” as Zoe Berkery, the company’s chief operating officer, put it to me. The first step in deciding what to do with them, she said, is to try to extend the offtake contract for the power. “Otherwise, there would be no justification for pouring in so much additional capital into a site that may be rolling off in just a couple of years, so that piece has been something that CleanCapital has focused on pretty intensely over the last, I would say, six years,” she said.

CleanCapital has repowered some of its projects, but only to restore the original generating capacity. It has not yet added batteries to any legacy sites. Berkery said the company looked at adding batteries in New Jersey and California, but has not been able to make the economics work. “I do think there's a lot of potential there,” she said. “It just depends on the site, the space, the market.”

Hansmann told me that a lot has changed in the past year to make it easier to add batteries to existing solar sites, including new ways to get paid for energy storage, such as through participation in virtual power plants. For example, in June, Google announced it would fund a virtual power plant in PJM run by the company Voltus, which will aggregate batteries from homes and businesses, among other distributed energy resources.. “For the first time, you're having the technical potential and the commercial potential line up in a very interesting way.”