Solar leads shale boom as fastest-growing US power source

Move over shale. Bloomberg reports the sun is now the fastest-growing source of U.S. electricity.

Solar power capacity in the U.S. has jumped 20-fold since 2008 as companies including Apple Inc. use it to reduce their carbon footprint. Rooftop panels are sprouting on homes from suburban New York to Phoenix, driven by suppliers such as SolarCity Corp. and NRG Energy Inc.

Giant farms of photovoltaic panels, including Warren Buffett’s Topaz array in California, are changing power flows in the electrical grid, challenging hydro and conventional generators and creating negative prices on sunny days. The surge comes after shale drilling opened new supplies of natural gas, thus contributing to the 47% drop in oil’s price since June.

“Solar is the new shale,” Michael Blaha, principal analyst of North American power at Wood Mackenzie Ltd. in Houston, tells Bloomberg. “Shale has lowered cost and enabled lower natural gas prices. Solar will lower costs for electricity.”

Solar capacity surged 30% in 2014 to more than 20 gigawatts and will more than double by the end of 2016, according to the Washington-based Solar Energy Industries Association. That’s enough to power 7.6 million U.S. homes, up from 360,000 in 2009. The biggest gains will be in California, Arizona, Texas, Georgia, New York and New Jersey. In Germany, Europe’s biggest power market, solar power output gained 14% last year.

Even with the rapid growth, solar still accounts for less than 1% of total U.S. power production, behind coal, natural gas, oil, nuclear and hydroelectric, according to the government’s Energy Information Administration. Because output suffers on cloudy or hazy days, grid operators must keep conventional plants on standby.