A spirited panel discussion involving solar PV industry organizations, vendors, and even local government on the first day of Intersolar North America explored whether and how the US can grow and nurture solar PV as a viable energy alternative.
July 11, 2011 – A spirited panel discussion involving solar PV industry organizations, vendors, and even local government gathered on the first day of Intersolar North America to come up with ideas about whether and how the US can grow and nurture solar PV as a viable energy alternative, from consumers to utility and overall with policymaking decisions.
Fielding the first volley from panel moderator (and solar industry luminary) Eicke Weber from Germany’s Fraunhofer ISE whether they are satisfied with solar PV progress in the US, and specifically California, analyst Paul Gipe with Wind Works replied that Ontario has a FiT and installed 350MW in 2011, well on its way to becoming the largest PV market in North America. And the US’ 2GW installations is half of Italy’s 4GW in 2010, and Italy is reining in its market just to keep doing 2GW for several years out. How, then, can anyone in a nation 5× bigger than Italy, or a state twice the size of Ontario, be satisfied with comparative domestic “progress” in renewable energy? Kevin Fox, cofounder of Keyes & Fox LLP, noted that after California it’s tricky to name ripe US markets for solar PV, as policies inspire confidence only for about the current year or so, and not the few years out that investors and proponents hope for.
FiTs, net metering, and a capitalism lesson from Germany
Johanna Gregory Partin, director of climate protection initiatives for San Francisco Mayor Edwin M. Lee, blamed a lack of leadership at both the national and state level to promote renewable energy, but also pumped up what SFO is doing: 18MW of total solar across the city (~2500 installs), a solar map (sf.solarmap.org) gauging solar readiness for every building, as well as two new PV support efforts being launched during this week’s show.
Talk quickly turned to feed-in tariffs. One problem, noted Weber, is in who sets the rates, a government agency or policy body? He proposed a “radically simple” idea of “net metering plus” — set the price at prevailing household electricity rates. Arbitrariness is removed from the equation, utilities would see no net cost (it would be “indistinguishable” from simple energy savings, he argued), and installers would peg the rate at the moment of installation, a dampening effect as prices go down. Gipe responded that such a plan benefits PV, not all renewable energy. John L. Geesman, co-chairman of the American Council On Renewable Energy (ACORE), went further, noting that prices inherently are based on the people; California’s regulatory benchmark is a natural gas plant, for which 70% of costs are tied to fuel, which is regulated by no one (“Jesus sets the fuel price,” he quipped). Fox added that how rates are designed is important, e.g. more solar friendly (i.e. based on time of use) or less friendly (demand-based). A robust discussion is needed to figure out rates that will both incentivize PV and maximize grid benefits by offsetting the system peak as much as possible.
Back to net metering, Craig Lewis, executive director of the Clean Coalition, noted the distinction between residential, large-scale/centralized, and interconnected in between the two — a sweetspot partly identified by California’s SB32 which is now being implemented two years after its introduction. It’s an important consideration that net metering inherently shifts costs to everyone who *doesn’t* have renewable energy, and utilities will end up breaking those users’ backs to get its fees and taxes, and that’s no way to win favor and spur interest in RE. He also noted the difficulty in figuring out net metering for buildings with multiple tenants or those that are underoccupied, and the difference between the “wholesale” rate — calculated as transmission connection — and the retail rate, the level as measured at the end-destination.
Eicke Weber playfully jumped in that it’s positively un-American to conceive of a net metering scheme in which a user who produces excess energy would not seek nor receive compensation for excess delivered back to the grid. (Three years ago at a SEMICON West lunch panel he similarly wondered aloud how it was that in solar PV, Europe had to teach the US how to make money.)
An audience member from Indiana asked the panel to consider whether a national FiT would spur some competition for California in national PV solar “so they’re not #1 forever.” In response, panelists Lewis noted that Indiana is actually a great example of utility-spurred local efforts at a FiT that are “close to being useful, and there are similar “exciting things happening all over the US,” including a proposed “state’s rights clean bill.” Rhone Resch from the SEAI added that it’s probably more fair to compare large California not with individual states but with regions, e.g. the Northeast, where from Boston-DC there is more installed solar than in CA.
Revisiting incentives for users, Geesman argued that the underlying problem is in trying to change the public’s behavior by altering the way they are charged for energy; instead we need to teach the important distinction in how peak energy (midday, summer) costs more than offpeak (night).
A quick side discussion about “intelligent” rates was squelched by Resch, who related how his own house’s PV system monitoring showed how smart — or actually, not smart — his new meter was, which ended up pinging “Error” and generated no credit for three weeks. Pepco, his (Washington DC-area) utility, ended up installing 500kl of smart meters that simply weren’t ready.
An audience member noted that there was no banker on the panel, which spurred another discussion surrounding money and finance. Weber said he urges people to see rooftop PV systems as actual cash-money investment — e.g. a 20-year guaranteed return, for a retired couple putting a solar system on their house, can provide valuable cash income. Minh Le, principal scientist at the DoE, noted that German banks see residential PV as an asset class. Resch noted that the legacy of Sen. Jeff Bingaman (D-NM) is the concept of a “green bank” to service all markets (utility to residential), operating as a “patriot” organization somewhat outside government restriction, like the Red Cross. Lewis reiterated the difference between a “clean program” and net metering is in the strength of credit, i.e. borrowing from the credit worthiness of a utility vs. a residential consumer.
Another audience member representing Hawaii’s solar PV interests pointed out that net metering in fact worked well for his state, which has unique concerns about energy security (so reliant upon oil imports) and clean considerations. Panelists also agreed that HI also has the unique angle of sky-high electricity rates which aren’t as heavy a consideration elsewhere. Other areas (e.g. Gainesville, FL) successfully replaced net metering with FiTs, pointed out Lewis; and in fact most FiT proponents favor multiple tracks, and are adopting them in the UK and Italy, added Gipe.
EV + solar PV, a heavenly match?
One final audience question drew praise from the panel for its insightfulness: will the rise of electric vehicles spur more solar PV adoption, once people realize they can charge their (environmentally friendly) vehicle with electricity they generate themselves (solar PV), thus saving on both ends — gas and utility bills? “This has huge political implications,” agreed the DoE’s Minh Le, pointing out that on a per-kWh basis, one could achieve $0.50/gal equivalent for EV, vs. $4/gal for gasoline. EV costs currently bring total lifetime to around $3.50/$4/gal, though — but with so much attention now being paid to energy storage, including EV battery technology (including DoE efforts), this is a potential major area.
Geesman agreed, saying that the EV-solar PV combination could “catalyze utilities” to upgrade their own networks, because it eases concerns about what to do about integrating PV into the grid and distribution/load balancing problems. Fox agreed it’s a classic and needed example of why we cannot look at new technologies in silos, and must explore policies together going forward. SFO’s Partin pointed out that CA’s EV tariff rates need reform badly. And Resch chimed in that acre-for-acre, solar means 85% reduced landmass than ethanol (though admitted it’s not a totally fair comparison as few people can grow corn on their roofs).