Posted December 17, 2012
Several news headlines came out last week showing continued growth of solar energy in the U.S.:
- "Residential solar systems reach an all-time high in Q3 2012"
- "Solar City Corp. IPO electrifies"
- "OakTech: Solar Mosaic unveils fourth Oakland solar installation, unveils new finance model"
Adding to these positive stories, a headline earlier in November showed that a major solar panel efficiency milestone was achieved in field-tested solar research, aided in-part by the Department of Energy.
Solar development in the U.S. continues to be a bright spot for the economy. NRDC Senior Attorney Robert F. Kennedy, Jr. and David Crane, CEO of NRG Energy relay this positive news and challenge that we can build on our recent success to grow this important non-carbon, reliable, clean and renewable energy resource in their New York Times Op-Ed: "Solar Panels for Every Home".
Context: Why focus on solar?
Solar, like wind, geothermal, sustainable bioenergy, and opportunities for energy efficiency is an abundant zero-emitting energy resource in the U.S. Our recent proposal to regulate carbon under existing authority afforded by the Clean Air Act shows just how wide-ranging these cost-effective energy resources are throughout the nation, spanning everything from energy efficiency to solar, wind, sustainable bioenergy and geothermal. The potential to capture sunlight for energy ranges from good (i.e. all on par or better than Europe) to extremely good (i.e. the U.S. Southwest is among the best solar regions in the world). And this potential amount excludes developing in areas designated as national or state protected areas plus lands identified as critical species habitat or ecologically sensitive.
We focus our attention on solar because it is now at a critical juncture in terms of U.S. industry growth. In many ways, solar deployment levels today are similar to wind deployment in the U.S. about a decade ago. I believe there are important lessons that we have learned over this decade-plus of experience in setting up and carrying out wind deployment policy. Chief among these comparisons is the dependability of a long-term and stable federal tax credit that investors and developers alike can rely upon to get projects, large and small, to completion. Without the dependability and long-term clarity of federal policy, the industry will struggle to move forward. One notch below the federal level, at least 29 states and the District of Columbia have put into action, over the last decade and a half, renewable portfolio standards (RPS), that while not perfect, have done a good job successfully growing clean and renewable energy development both within and across state lines. The key factor in the success of these RPS policies is that they put real utility 'skin in the game'. Utilities and the bodies that regulate them (e.g. public utility commissions) are key entities in implementation successful RPS programs because they are at the center of long-term energy planning processes and have honed competitive procurement mechanisms* combined with important interconnection and reliability standards from over a century of practice and learning.
Unlike a number of 'utility-scale' energy capture technologies that have dominated energy utility resource development since, well, the dawn of the electric utility, solar PV possesses a particular unique physical quality -- chiefly modularity, afforded by standardized panel sizes with no moving parts or emissions -- that allow for safe placement of the technology right into our built environment. That means energy resource visibility -- that can lead to prompting neighborly conversation and a plethora of new opportunities for education (like renewed excitement for math, science and engineering with students, teachers and community leaders having a hand in these kinds of visible and local clean energy projects) -- much the same way we recognize efficiency when we see the Energy Star logo on products and appliances or the U.S. Green Building Council's LEED award plaques recognizing green buildings. We think that the excitement generated by visible and local distributed solar PV can and should explored with investments in energy efficiency, which is still the cheapest, fastest, but unfortunately most 'invisible' energy resource available to us.
But here's the catch: despite the popularity of solar and its capacity for continued industry growth, several institutional impediments remain. Here's how we propose fixing them.
Legalize Distributed Solar
Our electric utilities, be they investor-owned, public or co-operative, manage the delivery of electricity into our homes and businesses. When the lights go off, they're at the other end of the [phone] line. They are ultimately responsible for getting crews up to assess and fix any and all problems on the electrical lines. "Keeping the lights on," or otherwise known as electric service reliability, is the foundation of their business. When a new technology such as distributed solar connects to the grid, rest-assured, utilities are going to want to make sure these systems aren't going to disrupt local service or possibly harm their crews. The procedure known as interconnection is therefore critical to get right. In this regard, the utility maintains confidence in its ability to keep the lights on with new generation on its lines, as well as provide clarity to the distributed generation developer to know what quality control standards must be met in order to purchase, install, test and operate the solar (or other distributed generation) connected to the grid. A second issue related to interconnection that has essentially the same policy goals -- achieving legal clarity and procedural transparency -- is permitting. Permitting is the umbrella term that captures local land zoning laws, building and safety codes, and administrative sign-off procedures that can vary greatly from place to place. The solar developer company SunRun released a report last year showing just how costly it is to do business in places where there is a lack of clarity and transparency in places their permitting procedures for distributed solar.
The distributed renewable energy advocacy group, the Interstate Renewable Energy Council (IREC) has been at work on these set of issues for a numbers of years and has a good handle on the technical and procedural issues that constitute this market barrier. Their latest annual report Freeing the Grid 2012 applies an A to F grade evaluation system across all fifty states on how well state regulators and utilities are tackling interconnection, as well as state and local authorities that work to clarify permitting requirements and implement sensible procedures to necessary reviews, approvals and fees. Our next step is to package these policy fixes into actionable policies to improve the grades of all the states. This 'legalization' of solar and distributed renewable energy more generally will further open investment to clean and renewable energy opportunities throughout the U.S.
*Restructured electricity markets covering states in the Northeast and Mid-Atlantic have changed the rules and the entities who carry out 'competitive procurement' of energy resources. Despite that difference, 'distribution utilities', as they are known in these markets still play the key role in 'keeping the lights on'.