Archives

Podcast: Why Global Solar Demand Will Be Off the Charts

By the end of the decade, the solar industry could be installing 135 gigawatts yearly — more capacity in 12 months than all the cumulative installations over the last four decades.

The 2020 solar market will look much different today. It will be defined by fewer subsidies, greater geographic diversity and more sophisticated business models.

This week, we’ll talk with Adam James, a senior solar analyst at GTM Research, about some of the most interesting findings from his new global demand report.

Later in the show, we’ll discuss the Supreme Court ruling against the EPA’s mercury and air toxics rule for power plants. We’ll wrap up with a look at leading residential installer Sunrun as it prepares to go public.

This podcast is sponsored by ReneSola, a Tier 1 solar cell and module manufacturer with a decade of experience in the cleantech industry.

###

The Energy Gang is produced by Greentechmedia.com. The show features weekly discussions between energy futurist Jigar Shah, energy policy expert Katherine Hamilton and Greentech Media Editor Stephen Lacey.

July 6, 2015 0 comment

Local Energy Rules Episode 23 – San Diego’s Fight for Community Choice

written by John Farrell

“San Diego and its community choice energy district would be able to offer a diverse energy mix with all of the solar, biodiesel, biogas, and energy storage resources that we have in San Diego. A product that is price competitive and yet at the same time would strive for and achieve a higher level of renewable content.”

See how this southern California city is striving for more clean energy and more local control in this interview with Lane Sharman, co-founder and chair of the San Diego Energy District Foundation. This podcast was recorded via Skype on May 21, 2014.

A Fight Against ‘Solar Taxes’
The rise of the San Diego Energy District Foundation was in response to fees proposed on solar customers by San Diego Gas and Electric in October 2011. Thanks to the efforts of Lane, Bill Powers, and others in and outside of the foundation, the solar-crushing “Network Usage Fees” were not adopted. It was a particularly important win, because the fees would have applied to those customers who had already installed solar, with the expectation that they wouldn’t pay extra for going solar.

Pursuing More Local Energy Control
The Energy District Foundation wasn’t satisfied with stopping their monopoly utility from implementing bad policy, it wanted to create an energy system that put the community in charge of implementing policy that was positive for the economy and the environment. In 2012, members of the Foundation worked with Protect Our Communities, a nonprofit organization focused on using California’s community choice aggregation law, to create a local entity in charge of greening up the city’s energy supply with local power. They hope to follow in the footsteps of Marin County and Sonoma County in prioritizing local control of a cleaner energy system, at competitive prices.

Why Public Power?
The interest in local control over energy purchases is rooted in the inherent conflict of interest between ratepayers and their existing for-profit utility. Utilities in California make money by investing in hardware (power plants, power lines, and the like) and not finding the cleanest, lowest cost power for their ratepayers. In part, this is because taxpayers pick up the tab for pollution from fossil fuels. A public entity is more likely to incorporate those externalities. Water, sewage, and education all provide examples of where the public sector provides excellent local service.

How Renewable Can San Diego Be?
A 2010 study called the San Diego Regional Plan for 100% Renewable Energy outlines the technical potential for clean energy in the region. But it’s the market prices for clean power than are most encouraging. Open bids for new energy in Texas, for example, had solar bidding in at 5¢ per kilowatt-hour compared to retail energy prices of 15¢ or more. The county has approved (in 2013) a comprehensive energy plan that will include an investigation of a local energy aggregation.

A ‘Monopoly Protection Act’
Incumbent utilities don’t much like the San Diego Energy District Foundation and its plan for local control of the energy system. The big three corporate monopoly utilities in California are behind a new bill (AB 2145) that would completely undermine community choice aggregation by changing a key provision of implementation. Currently, when a local government establishes a local aggregation to purchase power on behalf of its residents and small businesses, these individuals may opt out. If AB 2145 passes, all potential participants would have to opt in. It effectively shields the monopoly utilities from competition, requiring a yet-to-be-operational local utility to spend thousands of dollars to attract customers before it sells a single kilowatt-hour. Furthermore, it would make energy procurement nearly impossible for the local utility, which would be unable to effectively plan and purchase power without a reasonable estimate of their market share.

For more information on community choice aggregation, Lane recommends the San Diego Sierra Club, the local 350.org, the Local Energy Aggregation Network, and the San Diego Energy District Foundation .

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

June 11, 2014 0 comment

Local Energy Rules Episode 22 – A Deep Dive on Value of Solar and the Future of Solar Energy

written by John Farrell

“Utility regulation and rates is a contact sport,” says Karl Rabago, and that makes the implementation of a new “value of solar” policy complex. Will distributed solar grow better with a transparent, value-based contract price? How does it differ from net metering? Is Minnesota’s law a precedent to follow?

Prepare yourself for a deep dive in this extended interview with Karl Rabago, former Vice President at Austin Energy and soon-to-be Executive Director of the Pace Energy and Climate Center at the Pace Law School in White Plains, NY. This podcast was recorded via Skype on May 1, 2014.

An Accurate Incentive for Solar

A few years ago, Karl was interested in offering an incentive for solar energy production while serving as the Vice President of Distributed Energy Services for Austin Energy – the municipal electricity utility for Austin, TX – but he wanted to know how much to pay. Concerned about “feast and famine” effects of setting incentives, he wanted an accurate price that would grow the market but also reflect the actual value of solar.

Fortunately, he already had a good number.

Since 2006, the utility had been tracking the “value of solar,” based on a study conducted by Clean Power Research for the Austin utility. In the five subsequent years, the city had continued to track this value of solar.

If We’d Never Had Net Metering

Since the incentive program was new, it was an opportunity to re-think traditional policies for supporting distributed solar. Karl mused, “what would I do if we had never had net metering before – if we were writing on a blank slate?”

Traditional net metering (as implemented in Texas) provided two perverse incentives Karl wanted to avoid:

Because customers received a much smaller payment for excess power generation, they tended to increase their use to even out consumption and production, even during times of peak demand.
The retail rate isn’t set based on the value of solar energy.

With net metering already being destroyed by utility lobbyists in Texas, it seemed prudent to find an alternative.

“Solar Customers Know Their Electricity is Worth A Lot”
Although at first a shock, it became clear to the Austin utility and Karl that the value of solar was actual a premium over the retail electricity rate used to compensate net metered customers. In his words, it provided:

Fuel price volatility insurance

Insurance against climate change regulation

Insurance against drought

A Negotiated Shift from Net Metering to Value of Solar
Karl saw a potential negotiation with customers. The utility would pay the value of solar, and the customer would in exchange continue to pay for all of their power purchases, ensuring that they would cover the utility’s cost of maintaining its infrastructure.

“It was better for solar,” says Karl. The rebate costs have fallen by 33%, and solar installations have doubled since he left Austin Energy in mid-2012.

What Does it Cost to Serve a Solar Customer?
One of the biggest issues in the raging state-by-state debates over distributed generation is whether solar customers pay their fair share of the cost to maintain grid infrastructure. The bigger issue may be that no utility has ever actually studied the question:

“I’ve done only a couple hundred rate cases in my life,” says Karl, and “I have never seen a published utility cost of service study that shows how the cost to serve a customer with solar differs from the cost to serve an identical customer without solar.”

“The only real question” he says, is the potential uptake of solar between utility rate cases (if they don’t happen for a long time). And utilities already have a tool they use – a fuel cost adjustment that fluctuates with the price of fossil fuels – they could use. But Karl cautions that such a charge would be premature.

“In the mainland USA (outside of California), no utility has had their financial integrity threatened by the amount of solar that their customers have installed.”

Too Much Power for Utilities?

In the politics of distributed generation policy, value of solar is no different from metering.

“Utility regulation and rates is a contact sport,” says Rabago, and investor-owned utilities “owe a duty to their shareholders to try to maximize profit.”

For any policy, advocates will have to play defense or offense, but always be in the room.

A Right to Self-Generation?
Not in his reading of the law, suggested Karl. He believes that utility tariff law and PURPA provide a broader right, however, that customers should only have to pay for what they use. In that vein, he finds the notion of charging higher fixed fees on customers “silly.”

“There is nothing in Econ 101 that says that the way you collect your revenues has to be parallel to the way you incur your costs.”

Just because utilities find that more of their costs are “fixed” (poles, wires, transformers), instead of variable energy delivery, doesn’t mean that they have mimic that in their billing. He offers the anecdote of a coffee shop, which has high fixed costs but that charges its customers for what they use (the coffee they buy) and no more.

Utilities: Focused on the Small, Insignificant Things
Karl concludes his analysis of the utility attacks on distributed solar and other distributed generation with an anecdote from a utility board room. Looking for a scapegoat in an increasingly challenging market, utilities realize they have little control over the major factors: natural gas prices, energy efficiency, the weather, the economy.

“I have a sense that well-meaning people…are reaching out for the small, insignificant things because they can control them rather than facing a fundamental reality of the utility business that the largest, most capital-intensive business on the face of the earth is driven almost entirely by exogenous factors, commodity prices and the general state of the economy.”

The fight against value of solar or net metering is a fight against a changing business model, says Rabago, and change always comes hard.

Can We Get Along?
Karl notes that whether everyone loves value of solar policy, the notion of proper valuation for solar energy is supported widely. Cost-benefit studies of net metering for solar have had enormous support from advocates. Even The Alliance for Solar Choice, notable for its opposition to value of solar, has filed a brief in favor of proper solar valuation in a North Carolina regulatory proceeding.

Benefits to Value of Solar
While no policy is perfect, Karl sees several benefits to using value of solar policy.

It eliminates the argument about “cross subsidies” between solar producers an non-solar customers.
Customer gets full compensation for their energy production
Customer doesn’t have perverse incentives around energy efficiency, because reducing energy use (even for a solar owner) always means reducing their energy purchases.

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

May 21, 2014 0 comment

Disruption: Solar Energy – Episode 31 – Pamela Cargill

written by Roger Willhite

Today on the podcast I speak with Pamela Cargill, Principal of Chaolysti. We talk in depth about choosing the right solar job. This includes location, culture and other factors. We also talk a little third party ownership, policy, and I ask for a closer examination of Jigar Shah’s thesis that the only way to solve our climate problems is with mainstream, not impact, investors.

May 15, 2014 0 comment

Disruption: Solar Energy – Episode 30 – Sean White

written by Roger Willhite

This is episode 30 of Disruption: Solar Energy brought to you by SecondSilicon.com.

Today on the podcast I speak with Dr. Sean White. We talk about his vast experience in solar PV training. I ask him just how important NABCEP training is. Sean gives us some details about his attempt to hold office. And of course we talk a little news, trends, and policy on the podcast.

Some useful links relating to this episode are:

PV Student – pvstudent.com

The Magic of PV– youtube.com

SecondSilicon’s Comprehensive List of Solar Events – secondsilicon.com

Sean White on LinkedIn

May 6, 2014 0 comment

Local Energy Rules Episode 21 – One City Utility is Carbon Neutral, Today

written by John Farrell

It’s one thing to own your utility and have a commitment to renewable energy, but it’s another thing to deliver. The municipal utility in Palo Alto, CA, set an ambitious target of 33% renewable energy by 2015 and to ultimately deliver a carbon neutral electricity supply. They will reach 48% renewable power in 2017 and met the carbon neutral goal starting last year.

Learn more about the strategies one municipal utility pursued to drive down its carbon emissions and acquire solar energy in this interview with Jim Stack, Senior Resource Planner of the Palo Alto Utilities, recorded via Skype on Feb. 27, 2014.

How Can a Utility be Carbon Neutral?
The foundation of Palo Alto’s energy supply is hydropower, making up as much as half of their total electricity generation each year. But other renewable energy supplies the other half, at a time when most utilities have targets of 25% renewable or less. The chart illustrates how Palo Alto plans to get 23% of its energy from solar, 11% from landfill methane recovery, and 12% from wind power in 2017.

The carbon neutral target, while impressive, doesn’t mean that no fossil fuels are used. The statement means that on an annual, net basis, the cities electric customers produce no carbon emissions.

Building on Low-Cost Solar
The drive toward renewable energy and a carbon neutral energy supply was aided by dramatically falling costs for solar energy. When the utility went out for bids in 2012, it found solar producers willing to sell the utility power for 7¢ per kWh, a price that’s remained relatively steady since then. Low cost solar energy has meant that the city’s nationally recognized green energy purchasing program, with 20% customer participation, eliminated the price premium because clean energy was no more expensive than traditional power.

Having Control Matters
“If you were a customer of an investor owned utility, you’d be much less likely to see a program like [Palo Alto’s] put in place simply because investor-owned utilities have a much more traditional business model focused on profits and the bottom line,” says Stack.

Local control was a key to the success of the pursuit of a low-carbon energy system in Palo Alto. They aren’t hampered by regulators and the city’s bond rating means the municipal utility can also access lower cost capital than investor-owned utilities.

Municipal ownership has one big drawback, however, making the transition to renewable energy that much more impressive. The city can’t access the 30% federal tax credit for solar energy projects that private developers can. While they can still sign contracts with these developers to deliver solar, they miss the economic opportunity of direct ownership.

Keeping it Local
Palo Alto hasn’t been able to develop as much power in town as it would like, confesses Stack. As a mostly built-up urban environment with high land costs, and in a very sunny environment, local solar energy costs nearly twice what it costs to buy from projects nearby. All their renewable power comes from California, however, within a two hour drive of the city.

The city does have programs focused on local distributed generation and energy efficiency, however. Already, 6.5 MW of solar energy has been installed on local rooftops (serving about 4% of peak demand). The utility intends to use its feed-in tariff, community solar, and other initiatives to increase local solar to 23 MW, serving 15% of peak energy demand and 4% of total sales.

Can it Work for You?
Stack says there’s nothing stopping other municipal utilities from moving in the same direction. Renewable energy is less expensive than just about anything else and offers long-term price stability.

For communities without municipal utilities, he suggests lobbying for voluntary green purchase programs, community solar, and working on developing community-based renewable energy projects.

For more information on Palo Alto Utilities, see the section on Palo Alto in ILSR’s 2013 report showing 8 ways cities can boost their economy with local renewable energy: City Power Play.

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

May 2, 2014 1 comment

Disruption: Solar Energy – Episode 28 – Gabe Elsner

written by Roger Willhite

This is episode 28 of Disruption: Solar Energy brought to you by SecondSilicon.com.

Today on the podcast I speak with Gabe Elsner. We talk the work he and his cohorts are doing at the Energy and Policy Institute in Washington D.C. We discuss the how the American Legislative Exchange Council is doing everything it can to halt the progress of solar. And we get into a little bit on global solar markets

Some useful links relating to this episode are:

The Energy & Policy Institute – energyandpolicy.org

ALEC – alec.org

SecondSilicon’s Comprehensive List of Solar Events – secondsilicon.com

Gabe Elsner on LinkedIn

Energy and Policy on Twitter

April 21, 2014 0 comment

Local Energy Rules Episode 20 – The Power of Collective Energy Purchasing

written by CleanTechies.com Contributor

“We can’t do it as an individual, But four hundred communities aggregating and asking for local wind power and solar power – that’s really powerful.”

Oak Park, IL, is one of hundreds of Illinois towns using their authority to buy electricity in bulk on behalf of its residential and small business customers. So far, most communities have used the policy – known as community choice aggregation – to negotiate for less expensive electricity compared to the default electric utility, Commonwealth Edison. Many have also purchased renewable energy credits with their power, but it’s not clear if the practice is greening or green-washing the power supply.

Learn more about the incremental steps forward with community choice aggregation in Illinois and the potential for much greater collaboration between cities in this interview with outgoing Sustainability Manager K.C. Doyle of Oak Park, recorded via Skype on Mar. 28, 2014.

K.C. is also the founder of the Prairie State Local Government Sustainability Network, providing peer-to-peer networking of municipal officials around sustainability and climate planning.

Starting an Avalanche of Local Control in Illinois
The Illinois state legislature authorized “community choice aggregation” in 2009, allowing cities in this already deregulated electricity market to buy energy in bulk for their customers. It’s a 20-year-old policy, and such local city (or county) aggregations serve about 5% of utility customers in Illinois, Ohio, Massachusetts, Rhode Island, and California. Most states

Uptake of local aggregation was slow at first. Only a couple other communities had tried it when Oak Park city staff brought the issue to their town board in December 2010. The city held its referendum in April 2011, and two-thirds of voters approved of the city taking more control over electricity purchases.

By the end of 2012, dozens of Illinois communities had held votes approving local electricity purchase aggregation.

Cheap, Clean, or Both?
Once the town board had voter approval for aggregation, it began discussing options. The city could simply bid for cheaper electricity, or it could focus on more energy efficiency and renewable energy.

One of the city’s goals was to use a small fraction of the potential energy savings to set up an energy efficiency fund to offer energy audits or upgrade city lighting. That concept was dropped because of concerns that, amidst what was already a somewhat complex discussion for a small city, residents might perceive this fund as some sort of energy tax.

On clean energy, the decision was easier, although the outcome remains murky. Doyle notes that citizens were very clear in their interest in renewable energy:

“The answer was overwhelmingly…yes, we want the best price possible and yes, we want renewable energy as our power mix. In fact, we want it all renewable energy.”

In fall of 2011, the city went out to bid for green energy, with 100% of it covered by renewable energy credits (RECs) from wind power.

RECs – Renewable Energy Credits
ILSR and others have explained the concept of RECs elsewhere, but what’s important to understand is that buying RECs didn’t change the actual source of electricity flowing to Oak Park homes and businesses, nor did it mean the construction of new renewable energy facilities.

“We are not getting wind power through our electric socket…we’re getting the same mix everyone in northern Illinois is getting from ComEd…but we can say we offset that purchase with the purchase of wind RECs,” says Doyle, by “buying the environmental benefit of an already built wind farm in our energy market area (PJM),” which spans five states and part of Canada.

What’s clear is that the competitive energy market doesn’t offer small cities like Oak Park much choice.

“If you’re a large enough aggregation (e.g. Chicago), you can go right to the source” and get wind energy from a specific wind power provider in Illinois or even sign a long-term supply contract. With just 20,000 electric accounts, Oak Park doesn’t have the market leverage. Using long term contracts wasn’t of interest to the city board, either, since the board didn’t want to sign contracts longer than their terms of office (6 years).

Organizing to Move Beyond RECs
But cities like Oak Park do have a choice to increase their market power: join with their neighbors.

The North Shore Electricity Aggregation, for example, serves eight municipalities north of Chicago and bids on behalf of the entire group. The Metropolitan Mayor’s Caucus also established a “reverse auction platform” allowing cities to solicit bids simultaneously from energy supply companies. But that platform still only helps communities with similar energy use profiles. “The more alike you are,” says Doyle, “the easier time [suppliers] have bidding on your aggregation.”

The move toward larger aggregations may also help promote local renewable energy. While their first bid was limited to wind RECs in the larger PJM market area, the 2014 bid from Oak Park will ask for RECs from Illinois-only wind farms. Perhaps in future years they’ll shift toward procuring renewable energy locally, as Marin Clean Energy has done in northern California.

The focus on clean energy is tricky, though. The city remains “very price sensitive” as ComEd’s rates come down, says Doyle. They “want to remain competitive.”

What’s Next for Local Energy Aggregation?
Early aggregations in Illinois were able to take advantage of a unique situation to obtain much lower energy prices, but that situation has changed. They’ll need strategies beyond price to keep aggregation a “value add” for their residents.

Cities can take up and invest in energy efficiency. They can solicit bids for electricity contracts that include real-time pricing or demand response. And they should always ask for a price for local renewable energy, says Doyle:

“Every single community should ask the question…you are showing the suppliers that you have a very, very interested community in supporting the local renewable energy industry. It’s powerful information for decision makers, legislators, Illinois Power Agency…four hundred communities aggregating and asking for local wind power and solar power – that’s really powerful.”

Ultimately, communities should build on the success of collective action.

“We do this really great thing together, we banded together, we went out for a cheaper price and we saved a ton of money. $5 million in 2 years…there’s a lot of [community] pride around that.”

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

April 17, 2014 0 comment

Local Energy Rules Episode 19 – The Leading Community Energy Aggregator

written by CleanTechies.com Contributor

Community choice aggregation describes a situation where a town can become the bulk buyer of electricity on behalf of its residential and small business customers. Such local aggregations serve about 5% of utility customers in Illinois, Ohio, Massachusetts, Rhode Island, and California, but it’s Marin Clean Energy in California that stands above the crowd for their commitment to renewable energy and their nearly decade-long fight to offer service.

Learn more about the struggle for local control of the energy system and its numerous advantages in this interview with Marin Clean Energy Executive Director Dawn Wiesz, recorded via Skype on Feb. 13, 2014.

Why is Local Aggregation Worthwhile?

I began by asking Dawn if the effort to form an aggregation in Marin County, almost 10 years in the making, was worthwhile.

Definitely, she said: “We’ve been able to achieve many of the goals we set out…purchasing more than double the amount of renewable energy…offering rates that are competitive and in many cases lower.” Marin Clean Energy has prices that are competitive with incumbent Pacific Gas & Electric, and also advertises power that is 50 or 100% renewable.

When Did You Know You’d Beat the Utility?

Dawn said that it wasn’t clear they’d made it until they finally offered electricity service on May 7, 2010. “It was a down to the wire development.” The incumbent utility, Pacific Gas & Electric, had financed a ballot campaign to kill community choice aggregation by increasing the vote threshold from a majority to two-thirds, fought them at the Public Utilities Commission, and set up phone banks to dissuade potential customers from signing up.

“There’s really not a level playing field,” says Weisz. The incumbent monopoly provider has “brand recognition, an army of lawyers” and other resources that it deployed to stop the locals. Ultimately, Marin Clean Energy won, and about 75% of customers in their service territory now take electricity from Marin Clean Energy.

What Makes Local Aggregation Competitive?

Dawn notes that the local aggregation has several factors in their favor in offering competitive energy service to, and more renewable energy than, the incumbent utility. As she says, “we have low operating costs – we are a small and nimble shop – we procure in a very prudent way, maximizing renewables within our portfolio, and we don’t have shareholder profits.”

More Local Energy?

Marin Clean Energy only has about 1 megawatt of local renewable energy, a solar array at a local airport, but they have big plans for more. The mechanism for more local energy is a Deep Green fund, money from customers who have opted for 100% renewable electricity. Half the revenue from that fund will help finance pre-development for renewable energy built within the utility service area.

The utility also offers a feed-in tariff program, long-term contracts for buying solar or other renewable energy projects 1 megawatt or smaller that are built locally.

Dawn says they also have plans to support community solar or “syndicated solar,” allowing customers to buy energy from solar arrays built locally.

Advice for Other Aggregators?

Dawn has two pieces of sage advice for communities jumping into local aggregation:

Walk before you run
Don’t let the perfect be the enemy of the good

In particular, the first piece of advice refers to the desire of Marin Clean Energy organizers to offer a high renewable energy share to everyone right away, but that they phased it in slowly in order to make it work. Also, she notes that it’s really essential to get community buy-in with lots of local conversation and that taking the time to do so is what ensures all the pieces fall into place.

What’s Next?

Dawn says they’re seeing a real change with the utilities in California that may indicate a smoother road for future community choice aggregation efforts. Sonoma Clean Power is planning to launch in the next year, and many other communities in California are moving forward, offering customers “the only real choice they have” over their energy future.

You can learn more about community choice aggregation from our 2009 report or from the Local Energy Aggregation Network, a nonprofit based in California that provides information and technical assistance to states and communities considering local aggregation.

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

April 7, 2014 2 comments

Disruption: Solar Energy Podcast – Episode 25 – Matthew Tolle

written by Roger Willhite

This is episode 25 of Disruption: Solar Energy Podcast brought to you by SecondSilicon.

Today on the podcast I speak with Matthew Tolle. We discuss the recent PV Expo in Tokyo, Japanese solar development, Japan’s new storage subsidy policy, and Matt’s company Unirac. We also talk about a few current events in solar including the downward trend of utility scale solar in the U.S. and Solar City’s Best Buy play.

Some useful links relating to this episode are:

Unirac – unirac.com
Storage Subsidies for Japan– pv-tech.org
Solar City Partners with Best Buy– renewableenergyworld.com
Utility Scale vs Distributed Solar in the U.S. – greentechmedia.com
SecondSilicon’s Comprehensive List of Solar Events – secondsilicon.com
Matthew Tolle on LinkedIn

Visit the home for this podcast at secondsilicon.com/podcast.

Search “Disruption!” to find the podcast on iTunes or Stitcher Radio. Please subscribe, thumbs up, and share. Thank you for listening!

March 21, 2014 0 comment