In 2023, solar power plants will generate less than 6% of the electricity generated by US utilities, yet this ratio greatly underestimates the critical role solar plays in helping power companies accelerate the energy transition. The reason is that solar power plants can have a disruptive effect on system power flow, which forces utilities to develop capacity, rapidly cut output from other sources, and store surplus electricity for later use.

In turn, the resulting flexibility and emerging ingenuity across the energy sector is forcing power systems to adapt more effectively to large fluctuations in clean energy output, thereby helping to accelerate energy transition efforts. As the supply of various forms of renewable energy grows rapidly, utilities that can maximize the use of solar energy in today's power generation systems will most likely help drive the further development of the energy system for decades to come.

Solar energy: cleaner, but less stable

There is no clean energy that creates both opportunities and challenges like solar energy. According to data from the US Energy Information Administration (EIA), the current overall share of solar energy in US electricity output may be very small, but it is growing rapidly, and production will increase by 155% between 2018 and 2023. In contrast, wind power generation and natural gas generation increased 56% and 22.4%, respectively, during the same period.

In order to adapt to the growing supply of renewable energy and meet commitments to reduce carbon emissions in the power industry, US utilities reduced coal-fired power generation by 41% from 2018 to 2023, and the share of coal-fired power generation in the electricity structure was reduced from around 30% to 16%.

Over the past five years, however, America's electricity system has become both cleaner and more unstable. California's power system is the best example of the instability caused by rapid growth in solar power generation. According to data from Ember, an energy think tank, as the largest solar power state in the US (California's solar power generation accounts for about 25% of the nation's solar power generation), California's solar power generation increased by 72% from 2018 to 2023, and about 28% of the electricity supply depends on solar energy.

But how to turn California's abundant solar energy into usable electricity without distorting the electricity market is an enduring challenge. Over the past decade, as more and more solar power plants are connected to the California grid, California's electricity prices are under increasing pressure at noon when solar generation peaked. This is because the peak of solar power generation overlaps with a period of traditional low electricity demand, which forced power companies to lower electricity prices to balance system demand until solar power production declined later in the day.

The uneven distribution of solar power generation within Japan has led to daily distortions in California's power generation structure, and this creates a “duck curve” of electricity prices. During peak periods of solar power generation, California's electricity prices usually turn negative over a period of time as market pricing mechanisms try to attract demand and block electricity from other sources.

energy storage battery

To mitigate the effects of system imbalances caused by uncontrolled solar power output, California utilities have deployed utility-scale battery networks to store excess power during peak solar power generation and release it when the system needs it. Although the battery network is still under construction, at the peak of the cessation of solar power generation and the increase in demand for household electricity after work, the battery network already supplied about 20% of the electricity supply to the California power system.

These battery networks also reduced California's demand for electricity imports during peak demand periods, thereby reducing regional power constraints and helping the state reduce its dependence on the Territory's electricity supply. California's battery network also provides a learning tool for other grids, which are also struggling to cope with the impact of excessive solar power generation.

Furthermore, with the widespread use of smart meters — which encourages consumers to use more electricity when supplies are most plentiful, all US utilities are learning key ways to adapt to the rapid increase in solar power generation and prepare for a further energy transition.