Sierra Magazine, January 1, 2013
I really wanted the figures to work out. So did Ricky, the nice young guy from Sungevity who was trying to lease me a solar array for my roof. My family was looking into a 1.7-kilowatt system—the smallest available. Even so, our miserly habits kept us firmly in our utility’s lowest—and cheapest—tier of electricity usage. Solar is getting cheaper fast, but the numbers for the popular lease-financing model wouldn’t pencil out unless we could somehow boost our energy usage into a higher tier.
“How about a plug-in Prius?” Ricky suggested helpfully. “That would make it work.”
Unfortunately, even though a Prius driven 30 miles a day would increase our electricity use by 165 kilowatt-hours a month, a new car isn’t in our budget—and so (for the time being, at least), neither are solar panels on our roof. That puts me in good company: Some 75 percent of Americans rent, live in condos, have roofs shaded by trees or other buildings, or are otherwise poor candidates for sun power. Which leaves us out of the clean energy revolution that’s going on across the country.
If “revolution” sounds like hyperbole, consider this: U.S. solar installations more than doubled from the second quarter of 2011 to the second quarter of 2012. Last August, California’s utility-scale solar plants hit 1 gigawatt—as much energy as can be generated by a large coal- or nuclear-fired power plant. Less remarked on during the celebration of that milestone was the fact that at the same time, “distributed solar”—the thousands of rooftop systems in the state—was exceeding that number by 20 percent, producing 1.2 gigawatts. In 2008, the National Renewable Energy Laboratory put the annual technical potential of rooftop solar in the United States at 819 trillion watt-hours, equal to about a fifth of the nation’s 2011 electricity demand.
Along with the increase in capacity, solar prices are plummeting, thanks to technological advances and fierce competition from China. Within two to three years, says John Farrell, senior researcher at the Institute of Local Self-Reliance in Minneapolis, both California and New York will achieve “grid parity.” That’s the golden moment when power from the sun becomes as cheap as average residential electricity. Hawaii is already there; in Honolulu, 41 percent of building-permit applications these days are requests to install solar systems.
“The economics continue to drive solar forward,” Farrell says. “But there’s still a big barrier. The economics are going to allow a stampede of folks who are well placed financially, and in terms of the property they own, to go solar. But it’s leaving everyone else out.”
Some community solar advocates would like to adapt this system to solar gardens via a policy they call “virtual net metering” or “community net metering.” In my neighborhood’s case, this would require our utility to credit me, Doris, the cat lady, and all the other co-op members for the energy produced from the panels on the rec center. That would do the trick, but utilities hate it. The Clean Energy Collective model avoids this fight entirely by simply selling power to the utility as if the collective were operating a small power plant. Doing so, Spencer says, “allows us to speak their language.” The utility doesn’t have to change its accounting practices to credit the community solar members because Spencer’s group provides metering software that takes care of everything. The simplicity of this arrangement leads solar expert Farrell to call the Clean Energy Collective the “only consistently replicable community solar model.” It now has 14 projects totaling 5.3 megawatts operating or under construction in Colorado, New Mexico, and Minnesota.
“We’re one of the only solar companies I know that actually partners with the utility, as opposed to shoving it down their throat,” Spencer says. “You have to understand their mentality. Why not allow everybody to win? Utilities meet their goals, consumers meet their goals, and we end up with a hell of a lot more solar.” That, after all, is community solar’s goal—to provide more solar in general, not necessarily for particular individuals. Electrons from the panels on the rec center wouldn’t necessarily flow into my toaster, but they would increase the total amount of solar power in our town—and hopefully make me some money too.
Even more important, Germany subsidizes solar power by guaranteeing a fixed price plus a reasonable rate of return—a policy known as “solar cash back” or “feed-in tariff.” That makes solar a solid, simple investment—one as secure as a savings account. The annual rate of return declines over time, which encourages people to install their systems sooner rather than later. It also creates pressure on solar installers to become more efficient and to cut costs, so solar investors can get the most out of their euros. Gainesville, Florida, has such a policy; consequently, Mosaic is seeking to develop community solar projects there. Los Angeles is using its feed-in tariff—which was cosponsored by the Sierra Club—to help it get to 300 megawatts of rooftop solar by 2016.
Were he made U.S. energy czar, Farrell says, his first move would be to institute a national feed-in tariff: “Then you don’t have to mess around with anything else.” Of course, one might wish for a tax on carbon too, but neither policy is very likely in the current political environment. A more probable path to widespread community solar is to improve—or at least extend—the existing federal tax credit for solar installations. That credit expires in 2016, and any solar developer who watched Congress gridlock over extending the tax credit for wind has to be getting the heebie-jeebies. “Without the tax credit,” says the Clean Energy Collective’s Spencer, “these things do not work.”
That doesn’t mean, however, that the credit needs to stay exactly as it is. The current system is tailored to banks or large investors who have big tax liabilities. Thus, small and mid-level developers end up selling their credit to banks at a big discount. So, Farrell says, if the tax credit were replaced by a cash grant, the financing of community solar projects would be much simpler and more efficient. Also, he says, “the federal government would get a lot more bang for its buck out of a cash option because people wouldn’t need a middleman.” While a grant system may not sound politically likely, Congress actually enacted such a program from 2009 to 2011—a $9 billion effort that enabled 23,000 clean energy projects, enough to power 3.4 million homes.