Education Needed to Explain Potential of Distributed Generation

Education is a major requirement before distributed generation technologies can penetrate the market, according to a study of organizations that have implemented DG in the United States.

LAKEWOOD, Colorado, US, 2001-12-31 [] “Most of the organizations feel that the technology for distributed generation is here today and works, but that not enough people know about it to have widespread acceptance occur,” says Energy Info Source in its report, ‘Distributed Generation Case Studies.’ “There is usually no standard process for interconnecting these new technologies, leading to frustration among utility employees, facilities personnel, and even regulators.” “All stakeholders need to be brought up to speed as soon as possible because the learning curve for many stakeholders is likely to be steep,” it concludes. “There are also likely to be emotional barriers around doing something different, but these can be lowered by educating people on the benefits of the technology.” The report examines commercial applications of DG from 23 organizations that have implemented solar photovoltaic, fuel cell, microturbine or wind energy systems. Case studies include sites such as Fetzer Winery and Parker Ranch, and suppliers such as Astropower, BP Solar, Powerlight and Spire Solar Chicago. “The most common reason for implementing a distributed generation solution was environmental concern,” it says. “A number of the commercial organizations surveyed have corporate policies on reducing the environmental impact of their operations and view distributed generation (particularly fuel cells and photovoltaics) as a means of demonstrating their commitment to these policies.” Some companies wanted to reduce emissions for regulatory reasons pertaining to their status under federal or local environmental protection rules, while non-commercial organizations wanted to demonstrate their commitment to the environment and to educate the public about DG technologies. “Another major reason for implementing distributed generation was to better understand the technology and its applications,” but the report says this was limited to organizations involved in the energy industry. “These farsighted businesses understand that distributed generation is on the threshold of becoming a major force in the energy industry and that their ability to profitably run their businesses depends on their understanding its abilities and limitations. By installing and operating distributed generation systems, these organizations hope to gain a competitive edge in selling and/or installing such systems.” Only a few of the companies surveyed implemented DG in order to lower their cost of electricity “due to the fact that in most cases distributed generation technologies are not cost effective versus utility-supplied generation,” although California, Hawaii and other regions have utility prices that are so high that DG can compete on cost, it explains. “Even though cost wasn’t the main decision driver for many organizations, most indicated that they wouldn’t have undertaken the project if it were not cost effective.” Many projects were cost effective only with government rebates or tax credits, which supports proponents of using government funds to ‘jumpstart’ the DG market. The companies that said they would have installed DG without government support were either energy companies that wanted to understand the technology or organizations whose main reason for selecting DG was to achieve greater reliability and better power quality, such as data centres that cannot tolerate more than 30 seconds of outages per year. Among the issues and challenges in implementing DG was the difficulty for early adopters to obtain ‘buy-in’ from others, due to the “new and relatively unproven” aspects of DG. Facilities personnel are concerned with the impact of new technologies on existing systems and infrastructure, and regulators do not understand how to fit the new technologies under existing rules, explains the report. “Because of the current high level of demand for photovoltaics, especially in California, several organizations experienced delays in implementing their systems due to component shortages, particularly with regard to inverters,” it says. “As other technologies gain in popularity, similar problems might be experienced with them also. However, these problems are likely to be short-lived as manufacturers ramp up new plants to meet the growing demand.” Most DG technologies require a large amount of space and, in some cases, the size of the project was reduced because of space concerns. Most organizations found it easier to install a DG system during construction of a building, rather than to install as a retrofit, and other issues raised included cost, space, venting, maintenance and warranty responsibility. Organizations in California and regions where DG is more common had an easier time interconnecting with the grid, but companies in states where the utility was unfamiliar with the technology expressed a need for uniform interconnection standards that deal specifically with DG systems. Very few of the systems are selling excess electricity back to the grid, but one company said it could save $12,000 per month if net metering were available and others said they would have installed larger systems if they could get a fair net metering agreement. “First and foremost” among the advice from the case studies is that more generic education is needed regarding DG technology, and there is also a need for education on specific applications. “A number of the organizations interviewed believe that the biggest issue delaying widespread implementation is not cost but application expertise,” it notes. “This has led to a number of potential customers shying away from DG because they can’t get their hands on enough detailed data to educate them about how the technologies perform.” Any company interested in DG should “thoroughly research” the technologies and available grants, which is critical to success. Companies must also look out for hidden costs, such as metering, insurance and building modifications. “Overall, the results in this report indicate that distributed generation is here to stay,” concludes the report. “While the technologies are generally not cost-competitive without grants and rebates, they are coming down in price. As more installations occur, ‘teething problems’ will become less common, application expertise will increase, all installation/interconnection will become simpler.” “It appears that a bright future awaits these technologies and its only a matter of time before they become commonplace,” it adds.
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