Did Solar Just Replace Nuclear?


First Solar and NextEra Energy are teaming up to build another massive solar farm, and it's all headed where nuclear failed: Southern California. With another solar farm ramping up renewables, here's what you need to know.

72,000 homes
First Solar announced yesterday that it will construct a 250 MW solar facility in Riverside County, CA, for NextEra Energy's competitive generation business. The farm is capable of powering more than 72,000 homes, an admirable figure for an energy source that, until fairly recently, was commonly sniffed at for barely heating bathwater.

Construction is expected to begin in late 2014, and the farm should be operational in two years' time. But this isn't the first solar farm in the area, and it probably won't be the last.

Making up for nuclear
Supportive regulation and a windy, sunny environment has made California a go-to spot for renewables for years, but a recent nuclear plant retirement has put even more pressure on Cali's grid. Edison International's decision to retire its failing Southern California nuclear plant left the Los Angeles region in dire straits. Power prices registered 12% higher than Northern California's for over a year as producers clamored to keep up with capacity demand.

It should come as no surprise, then, that Edison International has entered into a power purchase agreement (PPA) to buy up all of NextEra Energy's and First Solar's new solar output. And this isn't the first time, either. The new project is located strategically close to an already under construction 550 MW solar farm with, you guessed it, Edison International as one of the utilities packing a PPA. First Solar is also developing this farm, and NextEra Energy is one of three co-owners of the plant.

Source: First Solar.

Did solar squash nuclear?
There is no single energy solution, but in this case, Edison International has found its fix in solar. Other companies like Sempra Energy are snagging some of Southern Cali's energy demand via strategically located transmission lines. Sempra Energy built 800 MW of transmission capacity last year to push power from a variety of sources (solar, wind, geothermal) through regional grids to meet localized demand.

Solar works in the area and Edison International's latest move show a willingness to adapt to the smartest solution around. Nuclear isn't dead, but the utility's decision to give it a regional rest may be the best solar switch yet.

The future of energy
Solar has found its sweet spot in sunny California, but it's going to take a suite of new sources to keep our energy economy rolling. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.

The article Did Solar Just Replace Nuclear? originally appeared on Fool.com.

Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter @TMFJLo and on Motley Fool CAPS @TMFJLo.The Motley Fool recommends Spectra Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published