Lessons from the Smart Grid Trenches for Distributed Solar

Smarter grids harbor a lot of potential for distributed solar power. Any local jurisdiction worth its salt is, or should be, exploring what’s involved and outlining a strategy that positions it as a location that nurtures the evolution of digital business applications, especially those in the emerging clean energy sector. And solar installers should be at the table.

Among those applications should be two-way communications protocols, software and digital meters capable of tapping into the value offered by solar electric systems; mainly power that can offset high time-of-use rates for customers and — in the aggregate — help relieve demand on the regional grid on hot and humid weekdays.  The supply and the electricity can become more efficient and reliable, thereby helping reduce greenhouse gas emissions and avoiding, where possible, building new high-voltage transmission lines and fossil-fueled fired generating stations. In the long run, smarter grids can help consumers save money.

The first wave of smart grid investments and demonstration projects in cities such as Austin, Boulder, Charlotte, Miami and Maui are beginning to reveal some lessons learned. Some of them are daunting, while others are enlightening.

Lesson #1: Be skeptical of the fanfare. Smart grids sound downright sexy, if you will, but there are multiple dimensions to the challenge. The hurdle to achieve what the trade and even the mainstream media have been buzzing about is quite tall. We’re talking about very complex systems here.

Lesson #2: Expect resistance from regulators and consumers alike. Outside of homeowners, business owners and government financial officers with very high solar IQs, consumers will be a tough sell, especially if they are not subject to variable pricing. And short of where time-of-use pricing is in place for certain users in California and New York, for example, there is no incentive today to assess the bottom line impact.

Lesson #3: Utilities want ratepayers picking up a big part of the tab. The headlong rush toward smart grids in certain cities without rate structures reflecting the costs involved may slow to a crawl. Funds from Federal Stimulus projects appear ready to flow to jump-start efforts for utilities with applications on file. But how far will this money really take us? And for how long?

Lesson #4: We need systems to handle a ton of new data and we’ve got a long way to go to develop most of them. To be sure, there are a LOT of smart IT, telecommunications and electrical engineers sharply focused on a variety of promising applications. Just be sure to temper your expectations.

Lesson #5: Free stuff from vendors will only take you so far. Mature and early stage companies scrambling for a sustainable share of the smart grid economy are willing to donate software, equipment and a panoply of “solutions.” But demonstration projects don’t make a business.

 Lesson #6: The more you know about all the pieces – and the terminology – that comprise a smart grid, the better able you will be to see how they work and fit together.  Let’s start with advanced metering infrastructure (aka “AMI” and touted by some as “killer app”) and networking / two-way communications; followed by demand response systems, grid optimization and distribution automation. There is whole new world of software, solutions and applications out there and then there are the home area networks and energy management systems emerging on the scene.

Lesson #7: It’s never too soon to engage your local and regional officials, your local utility, together with county economic development officials interested in creating “green” jobs, about the steps necessary to make your grid smarter. We at Standard Solar are in the middle of an effort by Montgomery County, Maryland (just north of Washington, DC) to do exactly this, which leads to another lesson…

Lesson #8: Whatever the smart grid becomes, most, if not all, utilities want to play a major role in its development. If anything they want to protect and defend their way of doing business. But some might see more in the crystal ball. Within a matter of days last month, two utilities in Maryland serving economically ambitious jurisdictions – Potomac Electric Power Co. serving Washington, DC and the close-in Maryland counties, and Baltimore Gas & Electric Co. – announced smart grid initiatives. It was evident they want not only “stimulus” cash but also future rate increases from the Maryland Public Service Commission to help pay for them.

This list is by no means comprehensive. Think of it as a snapshot of the evolution that’s beginning to take place. For solar designers / installers / developers and their customers, large and small, both can gain by being IN the game and not on the sidelines.

David Leeds at GTM Research, in a thorough report issued last month, reached a harsh conclusion about the role for Smart Grids: “Without a Smart Grid infrastructure, renewable energy technologies – lacking the ability to scale significantly – will remain niche. The promise of renewable energy making a significant energy and environmental contribution is a non-starter without a Smart Grid that can facilitate and integrate these variable generation sources. Increasingly, Smart Grid will be about moving “new” technologies and applications – renewable energy technologies as a prominent example – from the land of novelty to the everyday norm.”

Jim Pierobon is Vice President – Policy & Market Development at Standard Solar Inc., in Gaithersburg, Maryland.

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