Big Solar vs. Little Solar

One of the phoniest disputes in the renewable energy space is that between “big solar” and “little solar.”

It can be dealt with through a little transparency.

Big solar projects, like the 48 megawatt Copper Mountain project in Nevada, have been favored by utilities ever since the days of George Westinghouse and Thomas Edison. Advocates deride little solar projects — a few panels on a residential roof — as contributing little, as mere political correctness.

But the science doesn’t always agree with Big Solar. For one thing, projects situated many miles from town lose much of their power load as the power is transmitted. For another, they promise no relief from grid vulnerability to terrorism. People have known how to take out a city’s power structure since before Ocean’s 11 (the Sinatra one).

All this would be academic except for the political battle it creates. So long as solar power costs more to produce than conventional power, it seems, big solar and little solar will be battling for subsidies, and these internecine fights, often pitting activists against utility companies, tend to be one-sided on the side of the utility.

The solution, I think, is a new way of looking at subsidies. Price differentials.

Instead of basing subsidies on costs, base them on the difference in price between current technology and what’s being offered. Utilities know their current rates, and they know how their grids are designed. Let that cost, delivered to a specific point near the center of the grid,  be your yearly baseline, then calculate real rates for every proposed project, large and small, that wants to connect. Set the subsidy budget annually, as a single pile of money, then approve projects that can meet the price test best until the subsidy budget is exhausted.

Over time the baseline rises and the unsubsidized price falls. The utility, as a public company or a co-op entity, is placed under the obligation to deliver regular, honest reports. I have no problem turning public utility managers into “good guys” in this fight, and I think it’s silly to always see them as the enemy.

For a homeowner or business that wants to sell power through net metering, the baseline price becomes the price they get for their excess power. They can calculate their own costs and decide for themselves whether a project is worth their money. But any large off-grid project should also go through this calculation. Justify the ratepayer’s love, don’t just think you can throw any boondoggle at us and expect us to pay by calling yourself green. And add the cost of transmission to that calculation.

My guess is a lot of big solar won’t get built on that basis. I’m guessing a lot of big wind projects will either disappear, or look for customers closer to their supply, if transmission costs have to be calculated, and if they have to compete directly with small solar for subsidies and capital.

But I’m willing to be proven wrong. And going through this calculation brings the whole subsidy debate into the open, where it belongs.

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Dana Blankenhorn has covered business and technology since 1978. He covered the Houston oil boom of the 1970s, began making his living online in 1985, and launched the Interactive Age Daily, the first daily coverage of e-commerce, in 1994. He has written for a host of off-line and online publications including The Chicago Tribune, Advertising Age, and ZDNet. He has covered PCs, networks, telecommunications, cable technology, Internet commerce, the Internet of Things, Open Source and Health IT, He began covering alternative energy at his personal blog, Danablankenhorn.com, in 2007.

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