Last week, Brian Foley of the Sierra Club published an interview with John Farrell on “grassroots solar” on the Sierra Club blog, Compass. Read the interview below, or click through to the Compass. Interview: Grassroots Solar You hear about gigantic solar and wind farms that require vast amounts of land. But what about the decentralized… Continue reading
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From Dr. Norbert Rottgen, German Federal Minister for the Environment, in a discussion of baseload fossil fuels versus decentralized renewable energy:
It is economically nonsensical to pursue two strategies at the same time, for both a centralized and a decentralized energy supply system, since both strategies would involve enormous investment requirements. I am convinced that the investment in renewable energies is the economically more promising project. But we will have to make up our minds. We can’t go down both paths at the same time.
After 10 years of battling incumbent utilities, Marin Clean Energy became California’s first operational community choice aggregation authority in 2010. Already, local ratepayers can opt to get 100 percent of their electricity from renewable resources.
Community choice aggregation (CCA) offers an option for cities, counties, and collaborations to opt out of the traditional role of energy consumers. Instead, they can become the local retail utility, buying electricity in bulk and selecting their power providers on behalf of their citizens in order to find lower prices or cleaner energy (or even reduce energy demand). Marin Clean Energy started operations last year:
“When it launched last fall, Marin Energy Authority’s goal was to offer 20% renewable energy to its customers,” said Ms.Weisz. “We were able to offer 27.5% compared to the state-mandated 20%.” The state recently increased the mandate to one third. PG&E has about 17% under contract, according to Ms. Weisz.
Customers can also opt for the “deep green,” 100% renewable service for a 10 percent premium.
Marin Clean Energy not only contracts for a higher portion of renewable energy than PG&E, it’s trying to increase its share of local, distributed generation.
“We are filling a niche market for mid-sized renewable energy generation in the 20 to 60 MW range,” said Dawn Weisz, interim director… “When we went out to solicit renewable power offers, Pacific Gas & Electric told us we would not get any bids. We were looking for 40 MW. We were offered over 600. Almost all was solar.”
The local “utility” is also trying to maximize energy efficiency. Currently, a public benefits fund pools ratepayer dollars for energy efficiency programs run by PG&E. However, such programs tend to work against the bottom line of the utility, but not against Marin’s CCA.
Marin Clean Energy thinks it can do a better job and create more local jobs with the money.
It’s a promising start for California’s first community choice authority.
Last month, a Grist writer noted sarcastically that “Money is a miracle cure for ‘wind turbine syndrome’.” It is. And environmental advocates frustrated by the (spurious?) health and aesthetic complaints raised by not-in-my-backyard (NIMBY) actors would do well to consider why.
The implication of the Grist post (and this attitude in general) is that we can’t green our energy system without sacrifice. Getting to big carbon reductions will require enormous new renewable energy development and it will often happen in places where land was previously undeveloped (note: see this counter-argument). The folks who live there, the NIMBYs, need to do their share.
It’s awfully easy to offer sacrifice when you’re not on the altar. And it’s worth considering what’s really behind the “syndrome.”
In a recent study by the ever-methodical Europeans, they found that opponents to new wind and solar power have two key desires: “people want to avoid environmental and personal harm” and they also want to “share in the economic benefits of their local renewable energy resources.” It’s not that people are made physically ill by new renewable energy projects. Rather, they are sick and tired of seeing the economic benefits of their local wind and sun leaving their community.
Such opposition is perfectly rational, since investments in renewable energy can be quite lucrative (private developers and their equity partners routinely seek 10% return on investment or higher). And the economic benefits of local ownership far outweigh the economic colonialism of absentee owners profiting from local renewable energy resources.
Of course, NIMBY-ism only sometimes manifests itself as an economic argument, and there’s a good reason for that, too. In the project development process, there are precious few opportunities for public comment, and almost all of them represent up-or-down votes on project progress. None offer an opportunity to change the structure of the development to allow for greater local buy-in or economic returns. And no project will be halted simply because it isn’t locally owned. Projects can and have been stopped on the basis of health and environmental impacts. Enter Wind Turbine Syndrome.
There are alternatives. In Germany, Ontario, Vermont, and Gainesville, Florida, local citizens can use a renewable energy policy – a feed-in tariff – that offers them a guaranteed long-term contract if they become a renewable energy producer. This contract guarantees a reasonable, if small, return on investment and helps them secure financing. In Germany, the program’s simplicity means that half of their 43,000 megawatts (MW) of renewable energy are owned by regular farmers or citizens.
In Ontario, the provinicial clean energy program specifically requires project developers to use local content, guaranteeing a higher economic benefit for the province in exchange for its robust support for renewable energy. The program is forecast to generate 43,000 local jobs in support of 5,000 MW of new, renewable energy.
In the United Kingdom, public officials are piloting a “community wind fund” program for all new wind projects. Under the program, each wind project must pay in £1000 per megawatt (~$1600 per MW) per year, for 25 years, into a community fund where the project is located.
The impact for the community is significant. Compared to the typical land leases (often $5,000 per turbine for the host landowner), the community fund payments would increase local revenue by over 60 percent, with the additional funds spread to the entire community rather than just the lucky turbine hosts.
The impact on turbine owner net revenue is small but not negligible, reducing the net present value of the project by about 3 percent.
It’s not that any of these policies represent the silver bullet for local opposition to new renewable energy projects, but they do address the underlying problem.
The truth is that many people are frightened of being left behind by the clean energy revolution or angry that their local resources are tapped without commensurate local benefit. They find that there’s no way to be heard in the (democratic?) process without resorting to tangental arguments about health and viewsheds.
NIMBY has been misunderstood by the clean energy community. It is not a knee jerk, it’s a market failure.
When citizens see a new wind or solar energy project, it shouldn’t be from the sidelines. They should see it from the front seat, where they have hitched their wagon to environmental and economic progress by investing in a local energy project.
Our energy policy should make that possible. It doesn’t.
Federal tax policy makes it very difficult to share renewable energy tax incentives among multiple investors. Federal and state tax-based incentives preclude many local organizations (nonprofits, cities, schools) from owning wind turbines or solar panels. And utility billing rules make it nearly impossible (in most states) to share the electricity output from a shared project that isn’t utility owned.
There are brilliant examples of entrepreneurs overcoming these barriers to install community-based projects. Developer Dan Juhl and others have a record of success with community wind in Minnesota. The Clean Energy Collective is piloting a new community solar program in Colorado.
There are even some policy ideas bringing hope. Virtual net metering laws in eight states allow for sharing electricity output. Colorado’s solar gardens bill enshrines a small amount of community solar.
But the theme is one of triumph over adversity, with local ownership the exception rather than the norm. And without better energy policies that give locals a chance to buy in, the wind turbine syndrome epidemic will likely continue.
Community solar projects (called “solar gardens” under a new Colorado law) are blooming like wildflowers in spring, reports the Solar Gardens Institute. The 2010 state law, discussed in our Community Solar Power report, creates a new legal structure for community solar projects and requires utilities to buy 6 megawatts (MW) of energy from community solar projects by the end of 2013.
The beauty of solar gardens is that they allow people without sunny roofs (e.g. renters, shade-dwellers) to go solar by subscribing as part of a group of people to a local distributed solar project. Since most estimates of rooftop solar capacity indicate that only 20 to 25 percent of roofs are suitable for solar, community solar gardens can significantly expand the constituency for solar.
The spread of projects and interest in solar gardens is impressive, and has expanded far beyond Colorado. In their recent news update, the Solar Gardens Institute published a map indicating where there is interest in solar gardens, either for hosting a solar project or interest in pursuing a solar gardens state law.
The growth of solar gardens means more potential, more capital and more public support for solar. Check out the Solar Gardens Institute or our 2010 report on Community Solar Power for more information!
For many improvements (e.g. kitchen, bath), you can capture a significant fraction of the value back when you sell your home. For solar PV, you can get it all back:
This premium sales price was slightly higher than the installation cost, the study determined: “These average sales price premiums appear to be comparable to the investment that homeowners have made to install PV systems in California, which from 2001 through 2009 averaged approximately $5 per DC watt… homeowners with PV also benefit from electricity cost savings after PV system installation and prior to home sale.” [emphasis added]
As the article goes on to illustrate, the homeowner also receives the free electricity from the PV system.
Go solar: it’s one heck of a money back guarantee!
We think over the next three to five years the solar business will migrate heavily from a utility-sized solar business to a more of a distributed solar model driven by consumer demand not by government largesse.
When is it time to break up with your utility? Perhaps it’s when they come to ratepayers for $30 million in cost overruns on a “free” smart grid project. Or when they fail to meet deadlines to propose a new franchise agreement. Or when they cite national security in an effort to avoid sharing load information. Or when they crash your office with 9 employees to present their delayed franchise plan. Or perhaps when the propose raising rates again to keep up with rising fossil fuel prices.
The citizens of Boulder, CO, have put up with a lot from Xcel Energy, the investor-owned utility that spans several states and currently provides the city’s mostly-coal-powered electricity. So it was energizing to be invited to Boulder by Clean Energy Action last week to share how the city could move forward. (my presentation below)
The city’s saga began in 2003, when it first began studying the option of municipalizing their electricity system, to have more control over the grid and increase clean energy production. The city dropped the plan in 2007 when Xcel offered to build a free smart grid network, called SmartGridCity, a program that deployed advanced meters and fiber optic cables to improve information flow on the local electricity grid. However, with a dubious cost-benefit ratio from the Xcel program and a desire for more clean energy, the city leaders are once again considering their options.
In 2010, the city of Boulder chose not to renew its franchise agreement with Xcel, essentially a monopoly charter that gives Xcel the exclusive right to serve Boulder’s customers for an annual fee. The citizens of Boulder voted to tax themselves to replace those funds for five years, giving the city time to evaluate alternatives. They’re taking it seriously.
For one, their current electricity costs keep going up, according to Anne Butterfield of the Boulder Daily Camera:
In Colorado, plunging costs for renewables are furled against the steady upward march of fossil fuels. In March, Xcel filed for an 18 percent increase in the “electric commodity adjustment” (the ECA on your bill) which allows fuel costs to get passed through to customers. This hike would increase a typical monthly bill by about $3 — with a resultant boost to the RESA of only six pennies. Every buck paid to fossils on Xcel’s system leads to two pennies sent to cost-saving renewables.
For another, they’ve already learned about options to dramatically increase the portion of electricity from renewables. At a Clean Energy Slam, one company proposed providing 50% of Boulder’s energy from renewables by 2014, up to 80% by 2025. Their planning process has also revealed new ways of thinking about the grid. Freed from the paradigm of big, centralized baseload coal power plants, they’re looking at electricity from the “top down.” They start with a load curve, throw in renewables and storage, and then see what gaps need filling, a process that prioritizes renewable energy instead of trying to shoehorn wind and solar into the gaps where fossil fuels fall short.
City officials aren’t just interested in clean, reliable electricity. They also want to learn more about the potential for generating electricity locally. While any new energy generator can add jobs and grow the economy, locally owned renewable energy creates job and economic multipliers.
Local activists are also strongly committed to changing the status quo. They’re not only looking for ways to green the local electric grid, but for ways for citizens and businesses to finance significant energy efficiency improvements as well as distributed renewable energy generation.
Boulder may end up joining the 2,000 existing municipal utilities in the United States and chart their own energy future or perhaps Xcel will finally bring them an attractive offer. But by taking the issue into their own hands, Boulder will definitely do better than before.
By a vote of 13 to 8, the Nevada Senate earlier this week approved a feed-in tariff to boost renewable energy develoment in the state. The bill, SB184, now heads to the House where it is expected to pass. Unfortunately, a gubernatorial veto is also expected, so supporters are hoping for a 2/3 majority in favor.
Last week I shared a graphic illustrating the dramatic fall in distributed solar PV prices in Germany, down to $4.11 per Watt installed, for rooftop systems under 100 kilowatts. As it turns out, the graphic was out-of-date. In Germany, the average installed cost for rooftop solar PV under 100 kW is $3.70 per Watt (update 7/13/11: $3.40 per Watt). It’s a 50% drop in price since 2006, an average of 13% per year.
For comparison (as in the first post), here’s the average installed cost for under 10 kW rooftop solar PV in the United States, by state.
Chart is from page 19 of the brilliant report, Tracking the Sun III: The Installed Cost of Photovoltaics in the U.S. from 1998-2009 (large pdf).
Also from the previous post:
Did I also mention that the German policy (a feed-in tariff) driving solar costs down only costs German ratepayers the equivalent of a loaf of bread per month? In the U.S., the federal renewable energy incentives cost $4 billion in 2007, or about $3.17 per household per month (or about the same price as an Italian baguette).
There’s only way to describe this German success: wunderbar!