From the Editor: The New Energy Landscape

During Q2 2016, there were 121 policy actions taken in 42 states related to distributed energy resources (DER), according to the North Carolina Clean Energy Technology Center. About a third of the actions were increases in residential fixed charges, another third were changes to net-metering, and the remaining third were solar valuation studies, community solar, residential solar charges, third-party ownership of solar and utility-led rooftop PV programs. It would be an understatement to say that utilities are grappling with the new energy landscape.

However, I believe that we have the technologies and the brains to figure out what will be the most efficient and cost-effective way to buy, sell and manage energy using DER. I’m pretty sure we’ll need to move ratepayers to time-of use-rates or even real-time rates. I’m pretty sure the solution will incorporate the Internet of Things (IoT) so that our appliances can communicate with the grid and let us know when they should be turned on or off based on the price of energy at the moment. If we have PV and/or a battery, I’m fairly sure that those will also be internet-enabled so they know when to direct the energy they produce to the home and when to put it on the grid, again, in response to price signals.

What I don’t know is if all of these solutions are affordable. And I’m not clear about how we will use them in conjunction with each other. Utilities and companies are launching pilot projects and studies left and right to see if they can figure it all out.

All in all, though, I’ve got my fingers crossed that once we arrive at a solution, utilities, solar-enabled homes and businesses, and energy storage providers will all be compensated properly.

Jennifer Runyon, Chief Editor

 

From the Editor

If renewables didn’t have policy support, there wouldn’t be much of a market, so the saying goes. You only need to glance at Paula Mints’ most recent report showing how the spread of the European Feed-in Tariff (FIT) caused a spike in development activity to realize how policies manipulate markets.

I wonder however, if that is changing as more and more corporations get into the space. Major players like Amazon, Google and others are signing PPAs left and right. Our story on corporate PPAs gives more insight into how these mechanisms work.

One reason that corporations are interested in PPAs is because of economics. When Chief Financial Officers (CFOs) run the numbers they realize that locking in electricity rates for the next 10, 15, 20 years makes a lot of sense. Policy is a factor here because it is tax credits or other incentives that help make PPA economics look so attractive.

But a second equally important reason is not driven by policy: public support. A recent Strom Report shows that in major industrialized countries, renewables have approval ratings above 80 percent.

This uptick in corporate PPAs can be attributed to policy and public support. The CFO wants the electricity rate-lock, the sustainability officer wants to reduce the carbon footprint of the organization, and the marketing group wants renewables because they are viewed so favorably by the public. If technology costs keep dropping and public support of renewable energy keeps growing, that means that policy could eventually step out of the picture with no detriment to the growth of renewable energy.

Play the video letter from the editor at this link for more on this topic.