Reports

Rooftop Revolution: Changing Everything with Cost-Effective Local Solar

Authors: 
John Farrell
Publication Date: 
Tue, March 6, 2012 (All day)

solar installWith the cost of solar power plunging and retail electric prices rising, 100 million Americans in the nation’s largest cities will be able to “go solar” for a lower price than grid electricity in the next ten years.  Seizing this opportunity requires rethinking electricity policy and planning even while solar produces less than 1% of the nation’s electricity.  Investments in new centralized power plants and transmission could divert billions of ratepayers dollars from a democratization of the electricity system.  At the same time, energy subsidies – for fossil fuels and solar energy – must be gradually transformed into barrier-breaking incentives that maintain the pace of growth and push solar into all corners of the country. 

SOLAR GRID PARITY
(our definition)
When the cost of solar electricity – without subsidies – is equal to or lower than the residential retail electricity rate.

One Third of Americans Reach Solar Grid Parity by 2021

The solar opportunity is driven by converging economics: the installed cost of solar has fallen 10% per year since 2006 and grid electricity prices have averaged a 2% annual increase in the last decade. 

Nearly 100 million Americans could install over 60,000 megawatts of solar at less than grid prices – without subsidies – by 2021.

If the trends continue, there may be an outbreak of economical solar.  The following chart illustrates the number of Americans (from the top 40 metropolitan areas) that would be at solar grid parity and the potential amount of solar capacity that could be added to the grid at less than retail electricity prices in the next decade.  Nearly 100 million Americans could install over 60,000 megawatts of solar at less than grid prices – without subsidies – by 2021.

The potential for solar grid parity may be much larger than the chart suggests because it is limited to residential rooftops in the top 40 metropolitan areas of the United States.

Expanding the analysis to the entire country, and to non-residential rooftops could more than triple the solar potential and drive down costs. 

Expanding the analysis to the entire country, and to non-residential rooftops, could more than triple the solar potential and drive down costs. 

Furthermore, innovative time-of-use electricity pricing could help advance the year of the solar crossover.

Democratizing the System

The opportunity of solar grid parity goes beyond the benefits of solar power for the masses.  It suggests a future that transforms Americans from energy consumers into producers and gives them a stake in electricity production and energy policy.  Each house with a solar rooftop has (on average) two voters who will strongly support smart solar policies.  And when half of Americans can install solar for less than the cost of grid electricity, it makes a majority that favors local ownership of localized energy production long before solar power becomes a significant portion of total electric generation. 

Policy Can Overcome Technical and Regulatory Barriers

A major technical roadblock to realizing the full potential of solar grid parity is the so-called 15% rule, a common state regulation that limits the amount of solar on a utility’s distribution grid to 15% of the peak demand.  However, recent research shows that the 15% rule is too conservative, and that there are minimal impacts when distributed solar supplies 25% or more of the power to the local electricity grid. 

Distributed solar [can supply] 25% or more of the power to the local electricity grid.

Other barriers can also be overcome by the proper policy design.  One concerns permitting fees. Currently permitting fees alone can currently amount to as much as 20 percent of the cost of a solar PV array, but new best practices (such as expedited review based on a checklist, email rather than in-person permit submission, etc) have cut fees in some communities fivefold, to less than 4 percent of project costs. 

Net metering is another policy that needs an overhaul.  Simply put, net metering allows for a buyback of solar power at the retail rate for electricity consumed on site and new “community net metering” lets people share the output from a common, off-site solar project.  But a number of states cap the number of net metering systems at 5% of total system load or less.  The policy can also lead to less cost-effective solar, as individuals are encouraged to optimize the balance between consumption and production, rather than optimizing the economies of scale of solar by covering their rooftop.  Net metering may also prove problematic in the long run, as the cost of solar dips far below the retail rate (leading to overpayment to solar producers) or if solar drives down the cost of electricity (leading to insufficient payments).  Net metering is a good policy to get solar started but moving to a much higher level of energy self reliance will require new thinking and new approaches. 

An Opportune Time to Plan for Phasing Out Solar Subsidies?

The most serious barrier is the potentially serious disruption posed by the looming expiration of the federal 30% tax credit (in 2016).  A thoughtless extension will enrich solar developers in some regions of the country at the expense of taxpayers; an abrupt expiration will seriously affect the solar market in the many regions that have not reached solar grid parity by 2016.  A hybrid policy approach is needed, whether to phase out the federal tax credit in a fashion that is geographically equitable or to shift to a feed-in tariff strategy to be more comprehensively prepared for the economic issues of grid parity.

The best transition policy may be a feed-in tariff, as is used in solar-leading countries like Germany. 

On a per capita basis, Germany installs as much solar per year (35,000 MW) as the U.S. would need in total (30,000 MW) to reach its residential solar grid parity potential in 2018.

This solar financing tool is not a tax credit, but is a combination of a long-term power purchase contract, a guaranteed grid connection, and a contract price sufficient for a modest return on investment.  The contract provides secure financing for solar projects, reducing borrowing costs and the cost of solar electricity. 

In contrast to the hodge-podge of incentives for installing solar, it would provide an all-in, long-term contract for solar producers that would remain transparent and predictable and flexible as market conditions change.  The feed-in tariff would also solve the two major problems of the tax credit, the inability of schools, cities, and other public entities to use it and the inherent inefficiency of finding project partners who can consume tax credits.

Even without a feed-in tariff, the federal government could replace the tax credit with a cash-based production payment that would provide revenue for solar projects in addition to local net metering rates (a Feed-In Tariff Lite), or simply switch the tax credit to a cash payment.  In either case, the incentive could decline over time, while still solving the inefficiency problem of tax credits.

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Rooftop Revolution

CLEAN v SRECs: Finding the More Cost-Effective Solar Policy

Authors: 
John Farrell
Publication Date: 
Thu, October 13, 2011 (All day)

In choosing policies to finance solar power, U.S. states have chosen between two major options: solar renewable energy credits (SRECs) and CLEAN Contracts.

But few legislatures have been armed with data on the cost-effectiveness of these strategies.

The result is a mix of state and local policies with varying levels of efficacy. Neither program has a clear edge in installing more solar, and no one knows which states have acquired solar at lower cost.

Galvanized by the recent collapse in state SREC markets, this report examines the relative cost- effectiveness of these two solar financing policies. It reveals that the transparency, certainty, and low risk of CLEAN Contract Programs makes them more cost-effective than SRECs for financing solar power projects. In other words, CLEAN means more solar at less cost.

Solar Renewable Energy Credits = SRECs.
SRECs put a price on the supply of solar relative to state-mandated demand.
Clean Local Energy Accessible Now = CLEAN.
CLEAN Contracts provide a long-term contract for solar electricity based on the cost of producing solar power.

Findings

  • SREC markets are subject to significant volatility, creating a high risk atmosphere where developers require higher rates of return and increasing the ratepayer cost of solar by 10 to 30%. The recent collapse of five state SREC markets highlights this volatility.
  • CLEAN Contracts provide developers with transparency, certainty, and low-risk financing for solar projects, reducing developer cost of capital and required rates of return and decreasing the ratepayer cost of solar power. The ability of Germany’s CLEAN Contract Program to more accurately price New Jersey solar than the state’s own SREC market highlights this advantage.
  • A model of identical solar PV systems installed at $4.00 per Watt in New Jersey finds that CLEAN Contracts deliver solar at a lower levelized cost than an SREC policy due to the transparency, low transaction cost and low risk of a CLEAN Contract Program.

 

 

Download : 
CLEAN v SRECs: Finding the More Cost-Effective Solar Policy

Pricing CLEAN Contracts for Solar PV in the U.S.

Authors: 
John Farrell
Publication Date: 
Thu, August 11, 2011 (All day)

What would happen if the U.S. adopted the world's flagship solar energy policy – a feed-in tariff?  This policy is responsible for three-quarters of the world's solar power capacity and offers the simplest mechanism for expanding production of solar power and other renewable energy. 

Pricing CLEAN Contracts for Solar PV in the U.S. explores how such a policy (also known as CLEAN contracts) would be priced in the U.S. market, translating the world-leading German program to America.  The report, authored by ILSR senior researcher John Farrell, accounts for the much greater solar resource in the U.S. and examines the price utilities would have to pay to obtain the most solar, most affordably.

The report examines what these prices would be with existing federal incentives and without, exploring the price states could pay to maximize their solar power potential.

CLEAN Rate for < 30 kW Rooftop Solar PV @ $3.50/W - ITC and depreciation

Download : 
Pricing CLEAN Contracts for Solar PV in the U.S.

Democratizing the Electricity System

Authors: 
John Farrell
Publication Date: 
Wed, June 22, 2011 (All day)

"Clean local energy provides the most efficient pathway to the smart energy future and the new energy economy.  Democratizing the Electricity System does a brilliant job of illustrating the unparalleled benefits of small- and mid-size renewable energy and the urgent need for new policies that make the enormous economic and political opportunities accessible."  -- Craig Lewis, Executive Director of the Clean Coalition

Click to download

Executive Summary

Wind and sun are available everywhere, so renewable energy can be economically harnessed at small scales across the country, state and community.  This nature of renewable energy, coupled with an exponential increase of renewable energy generation here and abroad promises to transform the structure and scale of the nation’s grid system.  But the greater transformation is the democratization of the electric grid, abandoning a 20th century grid dominated by large, centralized utilities for a 21st century grid, a democratized network of independently-owned and widely dispersed renewable energy generators, with the economic benefits of electricity generation as widely dispersed as the ownership.

This paradigm of energy production – called “distributed generation” because it is geographically dispersed and connects to the existing (distribution) electric grid infrastructure – is changing the nature of energy generation.  It’s the same way in which personal computers replaced mainframes, or how Wikipedia and the internet have supplanted the library encyclopedia. 

Germany has installed over 10,000 MW of distributed solar photovoltaics (PV) – mostly on rooftops – in the past two years and renewable energy now constitutes 17 percent of overall electricity generation.  Half of their wind power and three-quarters of German solar is locally owned.

Praise for  

Democratizing the Electricity System

"Clean local energy provides the most efficient pathway to the smart energy future and the new energy economy. Democratizing the Electricity System does a brilliant job of illustrating the unparalleled benefits of small- and mid-size renewable energy and the urgent need for new policies that make the enormous economic and political opportunities accessible."

-- Craig Lewis, Executive Director of the Clean Coalition

"John Farrell has made yet another great contribution to guiding us toward a sustainable energy future. Democratizing the Electricity System puts it plainly and simply: to address the climate crisis requires a new energy paradigm, one not compatible with the legacy of centralized power--centralized economic, political, and electric power. Farrell's vision for the 21st century is a distributed energy model, consisting of local renewable power that is democratically controlled. Getting there means new policies that challenge the economic and political hegemony of centralized electric power and create a new grid architecture to support decentralized energy. Farrell tells us how to change the energy game to one in which we can be winners."

-- Al Weinrub, author of Community Power
"Clean energy discussions are almost invariably dominated by narrow technological and economic analysis. ILSR is one of the few organizations taking a more holistic view, grappling not only with dollars and kilowatts but with the social and political implications of various energy systems. After all, as citizens it should matter to us not only how many electrons are flowing but where they are created, who owns the means of production, and who reaps the benefits. Kudos to ILSR for producing another excellent report, a piece of analysis that is not only technologically sound and economically sophisticated, but humane."

 

-- David Roberts, Grist

California intends to generate 12,000 megawatts (MW) from renewable distributed power plants by 2020.   Utilities are testing and developing new energy storage technologies just as manufacturers are prepared to put 100,000 fully electric vehicles on U.S. roads by 2012.  Sixteen states have added a solar or distributed generation mandate to their renewable electricity requirements.  The potential for local ownership and economic benefits from energy generation has never been greater.

The rapid growth of distributed renewable energy has led utility planners and state and local governments to examine what the new rules of electricity generation and distribution will be in an age where households and businesses will be both producers and consumers of electricity.  The result is a historic opportunity to democratize energy, develop energy efficiency, energy self-reliance and renew local communities. 

Integration of Distributed Generation

Until recently, utilities believed that even small amounts of variable renewable energy like solar and wind would generate problems on the local electric grid.  But currently in Kona, Hawaii, a 700 kilowatt (kW) solar array provides 35% of the capacity of the local distribution feeder.  In Las Vegas, 10 MW of commercial solar PV on a distribution line provides 50% of capacity (and up to 100% during periods of low load).   In each case, the utility has reported no significant issues managing the integration of local distributed solar power.

The growth of democratic, distributed renewable energy will also mitigate the need for new backup generation to smooth the variations in wind and solar power production.  Geographic dispersion will significantly reduce backup requirements, and existing fossil fuel power plants (particularly natural gas) will have sufficient capacity to smooth out the remaining variations in wind and solar generation for many years.

In the long term, the increasingly renewable energy electricity grid will also use more energy storage.  New technological developments and an increasing recognition of the many system benefits of storage (e.g. frequency regulation, voltage support, etc.) has led the Federal Energy Regulatory Commission (FERC) to issue new rules that give storage and generation equal standing.  This opens the door for large energy storage systems from batteries to pumping systems to compete with fossil fuel backup power to smooth out wind and solar power production.

(image credit: California Storage Association, hat tip to Greentechmedia)

The new distributed grid paradigm is already being tested by utilities.  Xcel Energy installed and has been testing a 1-MW (7.2 MWh) sodium-sulfide (NaS) battery integrated with a 11.5-MW wind energy project in Luverne, MN. The Long Island Power Authority is considering a proposal to meet growing demand with a 400 MW battery storage facility rather than new power generation.

Value to the Grid and Economy

A cornerstone of the democratization of the grid with distributed renewable energy is its economic competitiveness.  New wind, hydro, and geothermal power can increasingly compete head-to-head with fossil fuels with the use of federal tax incentives.  Solar power is competitive in a few select regions with high electricity prices and a strong solar resource, but its rapidly declining costs (50% in 5 years) suggest a pending explosion of distributed solar power.

This transition is aided by re-evaluations of the value of distributed energy by regulators and utilities.  Municipal utilities in Colorado, Florida, and Texas have found valuable benefits beyond its electricity output.

Furthermore, distributed generation reduces efficiency losses from long-distance transmission of electricity and can help reduce the incidence of blackouts (just 500 MW of distributed solar could have prevented the massive Northeast blackout of 2003, saving $6 billion).

Wind power is most cost effective in a size range of 5 to 20 megawatts.  Historically, solar PV economies of scale have largely been captured at an individual project size of 10 kilowatts, with modest additional savings for community-scale projects.The modest economies of scale in wind and solar power also create a positive feedback loop of cost effectiveness and economic value.  Wind power is most cost effective in arrays of 5-20 MW, a handful of utility-scale turbines.  The economies of scale of solar PV are largely captured at the modest size of 10 kW, with modest additional savings for community-scale (up to 1 MW) projects. 

The small scale cost effectiveness of distributed wind and solar enables the democratization of energy production and  local ownership.  For states and cities looking to maximize the local value of renewable energy, the 1.5 to 3.4 times greater economic returns of local ownership compared to absentee ownership are compelling. 

Breaking Down Barriers

While technology advances and costs drop, the major obstacle confronting distributed generation is a century of rules and institutional structures predicated on the outdated assumption that power plants will continually grow in size and electricity will continue to be transmitted over ever-longer distances.  From federal energy incentives to rules issued by the Federal Energy Regulatory Commission (FERC) to state interconnection rules, there is a systemic bias toward centralized power and one-way grid systems.  
 
Expanding and adopting new policies can level the playing field. 

Federal

The Federal Energy Regulatory Commission can abandon its policy of providing lavish and unnecessary incentives to new high-voltage transmission at the expense of democratic, distributed generation.  The federal government can also aid the transformation to a 21st century grid by extending the cash option in lieu of tax credits that dramatically broadens the potential participation in renewable energy generation.

State

CLEAN Contracts (i.e. feed-in tariffs) make electricity generation “plug and play,” democratizing the grid and allowing energy consumers to become producers.  Data sharing rules enforced by state public utility commissions require utilities to publish information about their distribution network, to let distributed generators locate the best opportunities for developing new projects.  Interconnection reform at the federal and state level can drastically simplify the process of connecting distributed generation to the electricity grid.

Local

Community choice aggregation and municipalization can give communities the power and authority to establish energy self-reliance.  Lacking these major moves, communities can increase democratic, local energy development by passing solar access laws giving everyone a right to capture sunshine on their property for solar electricity and by changing building codes to encourage or require more on-site power generation.

 

The U.S. electric grid is poised for a transformation.  Without new rules, the renewable energy future and its economic benefits will be developed under an outdated paradigm and owned by the same few large utilities.  With new rules, we can unlock the potential of distributed generation and the potential of people to power the clean energy future.

To download the report, click below (available now!).

To download web-ready charts from the report, click here.

For questions or interviews, contact report author John Farrell at jfarrell@ilsr.org, 612-276-3456, or on Twitter @johnffarrell.

Download : 
Democratizing the Electricity System

Community Power: Decentralized Renewable Energy in California

Authors: 
Al Weinrub
Publication Date: 
Mon, January 24, 2011 (All day)

Community Power argues that local, decentralized generation of electricity offers many benefits to California’s communities relative to large central-station solar or wind power plants in remote areas.

It identifies the factors that favor local decentralized generation of electricity: its economic benefits to local communities, its cost-effectiveness, its minimization of environmental impacts, its potential to rapidly meet renewable energy targets, and its increased system security. The paper also identifies obstacles to local renewable power and outlines policies that can promote its development.

Community Power reflects the reality that all electric power is not equal: the impact of electric power production on our ecosystem and on our communities depends on the economic, environmental, political, and social conditions under which the electricity is produced. And from this perspective, the impacts on our communities of remote central-station renewable power and local decentralized renewable power are very different indeed.  

Download : 
Community Power: Decentralized Renewable Energy in California

Maximizing Jobs From Clean Energy: Ontario’s ‘Buy Local’ Policy

Authors: 
John Farrell
Publication Date: 
Fri, January 7, 2011 (All day)

Ontario’s bold renewable energy program contains excellent examples of policy that marries economic and environmental goals.  Unique among programs that set a guaranteed price for electricity from renewable energy projects, Ontario’s program also boasts a domestic content requirement.  Sixty percent of the value of wind and solar projects interconnected under the program must be sourced from within the province.

Ontario’s clean energy program encourages local ownership and distributed generation, in part to broaden support for renewable energy and in part to capture the increased economic impact generated from local ownership.

The domestic content requirement has already resulted in the promise of 43,000 jobs and dozens of new manufacturing plants to support the 5,000 MW of new clean energy.  The public cost of these jobs compares very favorably with state and federal job creation strategies in the United States.  If U.S. states were to emulate Ontario’s strategy the public costs would likely be significantly lower, given Ontario’s currently low retail price for electricity and its weaker wind and solar resources.  

Ontario’s domestic content provisions have been challenged by Japan and others in a complaint to the World Trade Organization, although it is unlikely that a definitive ruling would occur before the program is implemented.   American states could also be vulnerable to challenges under the commerce clause if they imitate Ontario, although economic development strategies that offer incentives to in-state business development (rather than barriers to out-of-state businesses) have been upheld in the past.

Ontario’s renewable energy driven economic development strategy, although still in its infancy, offers significant lessons to American states.  With as much as 70 percent of U.S. renewable energy systems manufactured overseas, state policymakers could learn from Ontario’s success.

Download : 
Maximizing Jobs From Clean Energy: Ontario’s ‘Buy Local’ Policy

Community Solar Power: Obstacles and Opportunities

Authors: 
John Farrell
Publication Date: 
Thu, September 9, 2010 (All day)

Community solar power can offer unique benefits in the expansion of solar power, from greater participation and ownership of solar to a greater dispersion of the economic benefits of harnessing the sun’s energy. But community solar faces significant barriers in a market where the “old rules” favor corporate, large-scale development. New rules – better community solar policy and regulations – are needed to remove these barriers.

Update: Our location grades sparked a good conversation about building-mounted v. ground-mounted PV systems.  Read more here.

Download: Community Solar Power: Obstacles and Opportunities [pdf]

 

Executive Summary

In this report, we explore whether community solar can:

  • Overcome financial and institutional barriers to collectively-owned solar.
  • Increase the number of people who can invest in and own decentralized solar power.
  • Offer an affordable opportunity to “go solar.” 
  • Disperse the economic benefits of solar power development. 
  • Tap unused space on existing structures rather than open ground for solar modules. 
  • Replicate.

sample community solar project

Existing community solar projects have met many of these goals and overcome barriers to get electrons flowing.  The Clean Energy Collective in Colorado has built a 78 kilowatt solar array on the purchase of 20 shares by local community members.  A group in University Park, Maryland, put a 22 kilowatt rooftop solar array on a local church with 30 community members investing. 

However, even the best community solar projects fall short of being a successful and replicable model for community solar power.  But their failure is not their responsibility.  There are still substantial barriers presented by solar policy – the old rules – that need to be removed and new rules that are needed to enable more community solar.

Efforts to remove barriers and enable community solar have been limited.  A Washington state community solar incentive offers significant cash flow, but it expires in 2020.  A Colorado solar gardens law creates a legal structure for community solar but perhaps at the expense of rooftop solar development.  A handful of states have community (or virtual) net metering that means a group of solar investors can share the output from a solar array, but it doesn’t reduce many of the other significant barriers affecting community solar.

Future community solar policy must make it easy for any community solar organization to use federal tax incentives or must modify federal tax incentives to make them easy to access.  Community solar policies must make it simpler for community solar projects to comply with securities regulations.  New policies should also favor rooftop solar because it reduces controversies regarding open space and simplifies connections to the existing electrical grid.  Finally, new community solar policy should favor community solar projects that offer participants actual ownership shares, because it increases both the economic returns and the constituency for distributed solar power. 

Our report examines nine existing community solar projects as well as other models to encourage community solar power.  It analyzes existing solar policy and presents recommendations for the new rules for solar power.  To see more, click below .

Download : 
Community Solar Power: Obstacles and Opportunities

2009 Wind Technologies Market Report

Authors: 
Ryan Wiser
Authors: 
Mark Bolinger
Publication Date: 
Sun, August 1, 2010 (All day)

An incredibly thorough, annual analysis of the U.S. wind market.  A must-read for anyone doing analysis of wind power data in the United States. The authors even provide their data file.  Download the report.

From the Executive Summary:

Wind Power Additions in 2009 Shattered Old Records, with roughly 10 GW of New Capacity Added in the United States and $21 Billion Invested. The pace of utility-scale wind power capacity additions in 2009 was 20% higher than the previous U.S. record set in 2008, while cumulative wind power capacity grew by 40%. This was achieved despite the financial crisis that roiled the wind power industry in 2009, and the significant reductions in wholesale electricity prices that began in mid- to late-2008 and have continued to the present. A variety of market drivers allowed year-on-year installation growth to persist in 2009, including: carryover of projects initially planned for completion in 2008; elements of the American Recovery and Reinvestment Act of 2009 (Recovery Act), including the Section 1603 Treasury Grant Program; the expiration of bonus depreciation rules at the end of 2009; and state renewables portfolio standards.

A Growing Percentage of the Equipment Used in U.S. Wind Power Projects Has Been Sourced Domestically in Recent Years. U.S. trade data show that the United States remained a large importer of wind power equipment in 2009, but that wind power capacity growth has outpaced the growth in imports in recent years. As a result, a growing amount of the equipment used in wind power projects is being sourced domestically as domestic and foreign companies seek to minimize transportation costs and currency risks by establishing local manufacturing capabilities. Imports of wind turbines and select components in 2009 are estimated at $4.2 billion, down from $5.4 billion in 2008. When presented as a fraction of total equipment-related wind turbine costs, the overall import fraction is estimated to have declined from roughly 50% in 2008 to 40% in 2009 as domestic manufacturing investments outpaced import growth.

The Average Nameplate Capacity, Hub Height, and Rotor Diameter of Installed Wind Turbines Increased. The average nameplate capacity of wind turbines installed in the United States in 2009 increased to roughly 1.74 MW, up from 1.66 MW in 2008 and 1.65 MW in 2007. Since 1998-99, average turbine nameplate capacity has increased by 145%, but growth in this metric has slowed in recent years due to the dominance of GE’s 1.5 MW turbine and as a result of the logistical challenges associated with transporting larger turbines to project sites. In addition to nameplate capacity ratings, average hub heights and rotor diameters have also scaled with time, to 78.8 and 81.6 meters, respectively, in 2009. Since 1998-99, the average turbine hub height has increased by 40%, while the average rotor diameter has increased by 69%: these trends are one of several factors impacting the project- level capacity factors highlighted later.

Download : 
2009 Wind Technologies Market Report

Energy Self-Reliant States, 2nd edition

Authors: 
John Farrell
Authors: 
David Morris
Publication Date: 
Sun, October 11, 2009 (All day)

How self-sufficient in energy generation could states be if they relied only on their own renewable resources? In November 2008, ILSR began to address this question in the first edition of Energy Self-Reliant States.  That report included a limited set of resources – on-shore wind and rooftop solar photovoltaic (PV) – and also examined the potential for biomass-derived transportation fuels. 

This updated edition of Energy Self-Reliant States narrows the focus to electricity, but includes virtually all renewable resources (on shore and off shore wind, micro hydro, combined heat and power, geothermal, rooftop PV).  We also discuss the potential gains from improving energy efficiency and estimate the per kWh costs for each state to become energy independent.

Download: Energy Self-Reliant States, 2nd Ed. [pdf]

 

Executive Summary

In 2009, the nation is involved in a vigorous and far reaching debate about the scale of future energy systems. As we shift from fossil fuels to renewable energy a new question looms before us. Will we embrace a centralized renewable energy future characterized by greater federal involvement in planning, or will we meet local and state needs with local and state-based strategies?

The ubiquitous nature of renewable energy argues for a decentralist energy approach. This ILSR report offers data that supports that argument. Energy Self-Reliant States examines the renewable electricity potential for each state. The estimates do not represent the technical potential but rather the commercial potential.

The conclusion is both surprising and welcome. All 36 states with either renewable energy goals or renewable energy mandates could meet them by relying on in-state renewable fuels. Sixty-four percent could be self-sufficient in electricity from in-state renewables; another 14 percent could generate 75 percent of their electricity from homegrown fuels.

Indeed, the nation may be able to achieve a significant degree of energy independence by harnessing the most decentralized of all renewable resources: solar energy. More than 40 states plus the District of Columbia could generate 25 percent of their electricity just with rooftop PV.

In fact, these data may be conservative. The report does not, for example, estimate the potential for ground photovoltaic arrays – although it does estimate the amount of land needed in each state to be self- sufficient relying on solar – even though common sense suggests that this should dwarf the rooftop potential.

Even as FERC and Congress and environmental groups, spurred by independent renewable power producers (some of the biggest of whom are subsidiaries of regulated utilities) rush to pre-empt state authority and accelerate the construction of a new $100-200 billion interregional transmission network, the case for state-focused planning has never been stronger.

For it is at the state, not the federal level, that comprehensive, least cost energy planning is used. It is at the state – not the federal or multi-state regional level – that efficiency, demand reduction, distributed generation and other commercially available strategies are often evaluated together.

It is at the local level that new technologies like smart grids, electric vehicles, distributed storage, and rooftop solar will have their major impact. The integration of millions of electric vehicles into the grid, for example, will change the context for energy planning by creating, for the first time, abundant storage for electricity.

It is at the state and local level that the most important new energy developments are taking place. Efficiency Vermont has empirically proven that an aggressive electric conservation program can reduce current consumption even with economic and population growth. Cities like Berkeley already are mapping their rooftop solar potential, installing charging stations for electric vehicles, and directly financing efficiency and renewable energy in households and businesses.

Perhaps the most important reason to make states the principal actors in energy planning is that their collective economic self-interest is consistent with the national interest Every state could create thousands of new jobs and hundreds of millions, perhaps billions, of dollars in economic development, through a vigorous strategy of energy efficiency and renewable energy.

Those promoting a new inter-regional transmission network argue that even if renewable energy is to be found everywhere, states with more reliable and higher speed winds or with more abundant sunshine can generate electricity cheaper.
That is undeniable. Nevada can produce solar electricity from photovoltaic panels at a price about 20 percent less than Iowa and about 35 percent less than Pennsylvania.    A typical North Dakota commercial wind turbine can produce electricity at a cost about 30 percent less than one in Ohio.

But in most cases these significant variations result in modest variations in the retail cost of energy when the cost of transporting the energy is taken into account.
For example, if Ohio’s electricity came from North Dakota wind farms – 1,000 miles away – the cost of constructing new transmission lines to carry that power and the electricity losses during transmission could result in an electricity cost to the customer that is about the same, or higher, than local generation with minimal transmission upgrades.

Thus centralized renewable energy might not be in the nation’s economic interest, even when the cost- benefit analysis focuses solely on the impact on the retail price. But if we were to use a more expansive definition of economic interest, that is, the impact of renewable energy development on local and state jobs and economies, state-based energy self-reliance strategies can be clear economic winners.

States have clearly indicated their desire to harness renewable energy within their borders. For example, Ohio requires half of its renewable energy mandate to be met with in-state production. Colorado and Missouri each have a 1.25 multiplier for in-state resources used to meet their renewable energy requirements. Minnesota’s Community-Based Energy Development statute encourages more locally owned wind power. Washington state offers solar incentive payments based on the portion of the panels made in the state, as well as reserving incentives for community solar.

The data in this report argue that a new extra high voltage inter-regional transmission network may not be needed to improve network reliability, relieve congestion and expand renewable energy. The focus should be on upgrading the transmission, subtransmission and distribution systems inside states.

This report reveals that many states have sufficient renewable energy to generate 100 percent of their electricity. Clearly this is a theoretical statement in the sense that it is very long term and to achieve high penetration rates of variable renewable energy will require significant developments in storage technology as well as significant investments in upgrading distribution and transmission networks to allow for massive amounts of dispersed generation.

Yet even if there is much to do before very high proportions of our electricity system can be generated by renewable energy, these data do suggest that for the foreseeable future states can and should harness homegrown renewable fuels to meet in-state demand. No state has yet exceeded 10 percent renewable electricity (excluding large scale hydro) and as this report shows, all states with renewable energy mandates, no matter how high, could satisfy them by relying solely on in-state energy sources.

The power of states to control their renewable energy future hangs in the balance. Others have documented how states have used their authority to improve the prospects for renewable energy, from policies favoring domestic generation to smart grids and conservation programs. This report provides compelling evidence that if states retain their authority, energy self-reliance is within their grasp.

Download : 
Energy Self-Reliant States, 2nd Ed.

Community Choice Aggregation: An Update

Authors: 
John Farrell
Publication Date: 
Wed, June 10, 2009 (All day)

For years, the U.S. has been served by four forms of electric utility: investor-owned, cooperative, municipal, and federal (e.g. Tennessee Valley Authority).

This list is changing.

Community Choice Aggregation (CCA) is a law passed in several states that allows cities and/or counties to join together and form a retail utility that will serve all electric customers in its jurisdiction by default (an opt-out rather than an opt-in process). The CCA framework guarantees a customer base for public entities desiring to provide electricity to homes and businesses in their jurisdiction and may result in lower costs, improved conservation, and increased renewable energy generation for CCA participants.

This brief summarizes the active CCA laws and programs around the country, and discusses the benefits and risks of communities pursuing aggregation.

 

 

Publicly-owned utilities don't have to make a profit, don't have to pay taxes and don't have to pay exorbitant salaries for executives (PG&E's CEO made $12 million in 2007). All of these cost savings can be passed on to customers.

-- Tam Hunt, Community Environment Council, CA

 

Download : 
Community Choice Aggregation: An Update

New Report!

Rooftop Revolution

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