The utility-scale solar market has been growing, and its prices are beginning to give natural gas prices, one of its biggest competitors, serious competition. Solar may now be a better choice to protect utility ratepayers from price hikes than natural gas. The prices in solar contracts are generally fixed, while fossil fuel plants are at the mercy of market prices for their fuels.
Looking at the data from recent years, the reasons for this solar boom are beginning to emerge. These are just a few of the reasons that solar is booming. Median prices in power purchase agreements (PPAs) fell, and utilities are now taking advantage of the new, low prices. There are higher project capacity factors, some of which are comparable in the Southwest to wind power. With the federal tax incentives ending at the end of next year, this is inspiring short-term growth.