Key benefits of distributed power generation (DP). Proven technologies for DP are widely scalable. Obvious example: a wind farm can be incrementally built in multiples of approximately 1.4 MW. Bigger doesn’t necessarily mean “cheaper” for DP. Customers can match the DP capacities to precisely known needs and not have to over-buy equipment. (see Figure 1… Continue reading
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In the beginning, there was the post office. Before the Internet, before cable, before TV, before radio, mail delivery was our major means of mass communication. The founders of the United States understood its importance and deemed that it must be a public institution. Article I, Section 8, Clause 7, of the U.S. Constitution states, “Congress shall have Power to establish Post Offices and Post Roads.”
Congress wanted the U.S. Post Office to be a monopoly, but the Post Office still had to deal with private companies that found loopholes in these rules.
When discussing centralized v. decentralized solar power, there’s an inevitable comparison between solar thermal electric power and solar photovoltaic (PV). But the fact is that solar thermal power – or concentrating solar power (CSP) – can also be done in a distributed fashion. In fact, of the 21 operational CSP plants in the world, 18… Continue reading
The CEO of a leading Indian solar energy firm issues a call for a U.S. federal feed-in tariff in yesterday’s New York Times:
Two things happened last month to give us pause to reflect on clean energy. First, Germany added the equivalent of nearly 1 percent of its electricity supply with solar energy between January and August. The first 1 percent took 10 years to achieve; the next 1 percent just 8 months. Second, the author of this revolution, Hermann Scheer, died.
The United States is one of the two top energy consumers in the world (along with China), so the world cares how fast America becomes convinced that there is a viable replacement to fossil fuels. The domestic American market should reach 1,000 megawatts next year. But to put that in perspective, Germany next year could add 1,000 megawatts in just 1.5 months.
To catch up, President Barack Obama needs to push for a federal feed-in tariff, or a mandate for states to have one, and fund it with a surcharge on conventional power — small enough to pass, but big enough to move solar away from cumbersome grants and tax incentives that come and go with the annual budget circus.
In mid-October, yet another municipality joined the growing list of lawsuits against the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac over the popular Property Assessed Clean Energy (PACE) program. Arguments in the court case will be heard next week.
A federal judge will consider next week whether to dismiss lawsuits questioning the Federal Housing Finance Agency’s decision to effectively shut down a White House-supported home energy efficiency program.
In a closely watched case, U.S. District Judge Claudia Wilken of the Northern District of California will hear arguments Dec. 2 over whether to dismiss several lawsuits against the agency, including one filed by the state of California.
I’m hopeful that the plaintiffs can win – PACE could really open the door to major improvements in home energy efficiency and expansion of distributed renewable energy.
North Carolina consumers and businesses would pay more for slower internet access when communities are preempted from building broadband infrastructure according to a new analysis released today by the Institute for Self-Reliance’s New Rules Project. This analysis shows that community fiber networks are faster and cheaper than incumbent cable and telephone networks in North Carolina. Continue reading
It’s rarely mentioned that a home with a solar array still gets most of its electricity from the grid. In fact, without storage, a typical home solar array might only serve one-third of a home’s electricity use, even if the system is big enough to meet the home’s peak needs. The problem is a mis-match… Continue reading
Yesterday, the Interstate Renewable Energy Council (IREC) released their model program rules for community renewable energy projects [pdf]. IREC’s new model rules consider many of the basic issues facing community renewables programs. These include: renewable system size, interconnection, eligibility for participation, allocation of the benefits flowing from participation, and net metering of system production. IREC… Continue reading
IN this environmentally conscious college town, thousands of bicyclists commute each day through a carefully cultivated urban forest whose canopy shields riders and their homes from the harsh sun of this state’s Central Valley.
The intensity of that sunshine also makes Davis an attractive place to generate clean green energy from rooftop solar panels. And therein lies a conundrum. Tapping the power of the sun can also mean cutting down some of those trees.
Enter community solar. Individuals can invest in a nearby, common solar PV installation, saving kilowatt-hours and trees.
But the article provides some poor examples: the Sacremento Municipal Utility District’s Solar Shares and SunSmart in St. George, UT. In the case of the former, participants pay extra for their solar power. In the case of the latter, participants pay extra for solar and – worse – pay up front for 20 years of more expensive power.
In our recent report – Community Solar Power: Obstacles and Opportunities – we provide a case study of nine operational community solar projects – five of them provide a payback on investment rather than asking a premium price for clean power.
Community solar can save trees, but it can also save participants money.
For two years, solar and wind energy producers seeking federal incentives have been able to take cash grants in lieu of tax credits. The stimulus act program helped keep the renewable energy industry afloat as the credit crunch and economic downturn dried up the market for reselling tax credits to banks and other investors with large tax bills.
The cash grant program is set to sunset at the end of this year, but solar and wind energy advocates are hoping it will be extended, for good reason:
In fact, the tax credits were always an awkward tool, some argue. Rhone Resch, the head of the Solar Energy Industries Association, said that many of the companies doing the installations were not making a profit either, so these tax credits were sold as “tax equity,” a secondary market, at a loss of 30 to 50 cents on the dollar to the seller. [emphasis added]
The tax credits were worth 30% of a project’s value, so the transaction costs of reselling the credits meant that renewable energy projects without sufficient internal tax liability were 13 to 21% more expensive than projects that could use the credits themselves.
This is dumb policy. Ratepayers pay a higher price for renewable energy because incentives filter through the tax code instead of the general fund.
But the cash grant v. tax credit issue is just one symptom of a larger disease affecting American renewable energy policy. Transaction costs are increasing the cost of renewable energy in nearly every state with a renewable portfolio standard (RPS).
Under most state RPS policies, utilities put out requests for proposal to acquire renewable energy to meet the state mandates. These solicitations attract thousands of developers who all have to front their project development costs. But in California, for example, 90% of projects don’t make the utilities’ shortlist for the solicitation, stranding over $100 million in development costs.
Some of those projects may eventually get online, but most of that money is flushed because the U.S. prefers to let utilities act as gatekeepers to clean energy rather than open the market to any potential producer. It’s not the only way.
There’s a renewable energy policy that’s responsible for 75% of the world’s solar and half its wind power. It has the lowest transaction costs because there’s no fiddling with the tax code and no parasitic costs from auctions or solicitations. Instead, utilities are required to interconnect and take the power from any developed renewable energy project, and to provide a price sufficient to provide a reasonable return on investment (just like the utilities enjoy in rate regulated states).
The policy is funded entirely through the electricity system, so renewable energy doesn’t have to compete with other budget priorities.
It’s called a feed-in tariff.
The U.S. can extend the cash grant program, but it merely treats a symptom of the disease. A better policy awaits.