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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 28, 2011

Colorado Solar Permitting Fees May Fall With New Legislation

The content that follows was originally published on the Institute for Local Self-Reliance website at

A few weeks ago we posted on the adverse impact of solar permitting fees on residential and other small-scale distributed solar PV projects.  Vote solar provides an update and progress in Colorado:

Vote Solar recently teamed up with COSEIA to collect and evaluate the current state of [solar] permitting in 34 local jurisdictions throughout the state.  Survey says? In practice, solar permitting requirements vary widely from one jurisdiction to the next due to different permitting plan review processes and other extraneous fees. This has resulted in piecemeal local permitting practices that are often costly, complex, non-transparent and time-intensive. The process is arduous for solar installers and increases costs to consumers. Among the 34 cities and counties surveyed, Breckenridge, Colorado Springs, and Denver are doing permits on the fast and cheap. On the slower, more expensive end are Arapahoe County, Aurora and Commerce City…

The findings reinforce the need for Colorado’s juridications to adopt standardized, streamlined solar permitting practices. The Colorado Fair Permit Act (HB 11-1199) has passed out of the House on a 64-1 vote and now moves on to the Senate. Stay tuned!

Solar permitting remains a looming cost barrier to distributed solar, so it’s great to see that Vote Solar’s Project:Permit is gaining traction.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 25, 2011

UK Solar Incentive Cuts May Also Distribute Solar Rewards More Widely

The content that follows was originally published on the Institute for Local Self-Reliance website at

A proposed revision to the United Kingdom’s feed-in tariff program may have created an uproar, but it may also help spread the economic benefits of solar more widely. 

The proposed changes, announced last week, would reduce solar payments for large solar projects (50 kilowatts and larger) by 50 percent or more, but leave payments for smaller projects largely intact.  The following tables illustrate:

Old Tariffs Price paid per kilowatt-hour
£0.41 $0.66 < 4kW retrofit
£0.36 $0.58 4 to 10 kW or <4 kW new build
£0.31 $0.51 10 to 100 kW
£0.29 $0.47 100 kW to 5 MW
New Tariffs Price paid per kilowatt-hour
£0.41 $0.66 < 4kW retrofit
£0.36 $0.58 4 to 10 kW or <4 kW new build
£0.31 $0.51 10 to 50 kW?
£0.19 $0.31 50 to 150 kW
£0.15 $0.24 150 to 250 kW
£0.09 $0.14 250 kW to 5 MW

The new tariffs will help redistribute more of the feed-in tariff (FIT) program revenue to smaller projects.  The most likely manner is simply by giving less money per kilowatt-hour (kWh) to the large projects, leaving more for the small projects.  The following charts will illustrate. 

Let’s assume that under the old FIT scheme, each project size tranche provided 25% of the solar PV projects under the program (see pie chart).

However, since a 2 MW project produces many more kWh than a 3 kW project, the revenues will skew heavily toward the larger projects.  For the sake of simplicity, I assumed that the midpoint of each size tranche was a representative project and that they all produced the same kWh per kilowatt of capacity. 

The revenue distribution can be seen in the second pie chart:

Essentially, all the FIT Program revenue was going to the largest projects.  Even if three-quarters of projects were under 4 kW, they would still only represent 3 percent of program revenue, with 93 percent accruing to the projects over 100 kW.

Under the new FIT scheme, the prices paid to larger solar PV projects are sharply reduced. With projects evenly distributed between the now six size tranches, much less of the program revenue goes to large projects.

The projects under 100 kW have roughly tripled their share, from 3 percent to 10 percent of revenues. 

Of course, the lower prices for large solar projects could have another impact: killing large solar projects completely.  Let’s assume that the new prices for projects over 50 kW (that experienced the steepest revenue decline) are simply too low and that all development ceases. 

The first pie chart shows the project allocation in the FIT program without any projects over 50 kW.  As described, we have an even distribution (# of projects) between the smallest three size categories, and no projects 50 kW or above.

The next chart shows the revenue allocation of the FIT program under this assumption.  Now, nearly 30 percent of program revenue accrues to projects 10 kW and smaller. 

If we assume that instead of an even allocation of projects, we have an even allocation of capacity between the size tranches (e.g. 30 MW, 30 MW, 30 MW), then the revenues would be split evenly between the remaining size categories and two-thirds of the solar FIT program would be flowing to solar projects 10 kW and smaller.

While it’s unlikely that the government plans to eliminate the large solar PV market with its price revisions, the overall effect is likely to be a transfer of program revenues to smaller projects.  The advantage in this strategy is that these revenues will be spread over a much larger number of projects and project owners, creating a larger constituency for supporting solar power and solar power policies.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 25, 2011

Utilities in Ohio Claim They Can’t Meet State’s Solar Standard

The content that follows was originally published on the Institute for Local Self-Reliance website at

Vote Solar reports that Ohio utility First Energy is claiming for the second straight year that it can’t meet the state’s solar carve out. 

First Energy Corp – which is parent company to Toledo Edison, Ohio Edison and Cleveland Electric Illuminating - reports that they were unable to find enough solar renewable energy credits in Ohio needed to satisfy their 2010 benchmark for solar energy. First Energy has filed for  force majeure for the second year in a row claiming that it was a circumstance beyond their control, a legal ‘act of God’,  that prevented the company from buying the needed SRECs….it’s awfully suspect that an Act of God would occur twice in a row.

It is, for two reasons. First, as we detailed in our 2009 report – Energy Self-Reliant States – Ohio is like many states in having sufficient rooftop space for solar PV to supply 20 percent of the state’s electricity.  There’s no shortage of sunshine.

Additionally, it’s far less expensive for the utility to buy solar than to pay the alternative compliance payment.  In 2011, utilities must either acquire the necessary solar renewable energy credits (RECs) or pay $400 per megawatt-hour (MWh) that they fail to acquire. 

However, a large-scale solar PV system in Ohio with an installed cost of $6 per Watt only needs 22.6 cents per kWh ($226 per MWh) to break even over 25 years (if they use federal incentives).  With a long-term contract with a known price for solar RECs (something they have yet to offer), First Energy can surely find a solar developer willing to help them out.

After all, that’s exactly what other Ohio utilities are doing:

First Energy could have followed the example of AEP Ohio, a neighboring utility that has successfully entered into a long term PPA with a 10 MW solar farm and is in development for another 49 MW solar facility as we write. If AEP can do it, so can First Energy.

First Energy’s problems with solar have little to do with God or their state’s solar resources, and everything to do with giving up.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 22, 2011

How Community Ownership Can Save Wind Power

The content that follows was originally published on the Institute for Local Self-Reliance website at

Community ownership may provide the solution for increasing resistance to wind power in the United States. 

Wind power has expanded rapidly in recent years, but the new wind farms have a common characteristic: absentee ownership.  These large wind farms promise a broad expansion of clean energy production, but not a commensurate expansion in local economic benefits.  True, every wind power project will create some jobs and ripple effects in the local economy, but with absentee ownership most project benefits will leave the community (whereas locally owned projects have significantly higher rewards).

Without a say or stake in the turbines remaking their local skyline, communities have raised red flags.  The result is more restrictive wind siting policies and opposition to new high-voltage transmission lines that may carry wind power from remote areas to major cities. 

The wind industry’s initial reaction to local resistance seems to attempt an end-around, looking for states to pre-empt local siting authority and the federal government to pre-empt state transmission planning authority.  Unsurprisingly, such moves win few friends for wind power.

There’s an alternative.

Some wind developers have learned that gaining local acceptance means rewarding not just the landowners who host project turbines, but neighbors who will also be affected by the turbines’ proximity.  In the United Kingdom, state policy is requiring wind farms to pay into community funds (perhaps inappropriately, as a tool to offset severe budget cuts).  But this policy has two drawbacks.  For one, it only buys off the opposition, it doesn’t transform them into wind advocates.  Second, it fails to take advantage of a community’s capital and the interest of residents in owning a stake in local wind power, rather than simply observing.

Community wind projects typically find a warmer welcome:

“In local communities, there’s been little to no opposition to wind projects,” said Eric Lantz, a wind policy analyst at the Renewable Energy Laboratory and a co-author of the study. “There’s more pride taken when you’re able to participate with an ownership stake.”

Several studies reinforce the idea that a local ownership stake is key to acceptance of wind projects.

Community ownership not only eliminates most local opposition, but makes locals into stakeholders in the success of wind power.  A new 25 megawatt wind project in southwestern Minnesota will feature significant community ownership.  Just listen to the heartfelt pride in wind power from these members of a wind power cooperative in the United Kingdom:

Community wind projects are also more likely to reduce demand for long-distance transmission, because gaining local acceptance means wind farms can be built closer to cities and because communities lack the capital to build that largest-scale wind farms.  This is a key issue, since there’s yet to be a community-owned transmission line.

While community wind could save the wind industry, it won’t be without some better rules.  Community wind projects still require financial acrobatics, largely because the federal incentive for wind power (the Production Tax Credit) can only effectively be used by big banks and investment firms.  And utilities tend to favor a few negotiations with large wind projects rather than many negotiations with smaller projects to meet their renewable energy obligations.  Laws like Minnesota’s Community-Based Energy Development statute or CLEAN contracts can pave the way for more community-based wind projects.
Wind power is a key element of transforming our electricity system to clean energy and to combatting climate change.  But it’s future may hinge on the willingness of the wind industry to embrace community ownership.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 3 Comments | Updated on Mar 17, 2011

Cost, Not Japan Crisis, Should Scrub Nuclear Power

The content that follows was originally published on the Institute for Local Self-Reliance website at
please ignore this image
explosion at Japanese nuclear reactor

The plumes of smoke rising from Japan’s Fukushima Daiichi nuclear reactor create a visceral reaction.  But the crisis should not persuade Americans to abandon nuclear power. 

Instead, Americans should abandon nuclear power for its prohibitive and un-competitive costs.

The wildly escalting costs of nuclear plants under construction in the U.S. are a perfect example.  A pair of proposed nuclear power plants in Florida have “overnight” costs of $3,800 per kilowatt, but since nuclear power plants actually take eight years to construct, the total estimated project costs are closer to $6,800 per kilowatt (kW) of capacity.  This figure is reinforced by an estimate for Progress Energy’s two new units ($6,300 per kW $8,800 per kW), and Georgia Power’s new plants ($4,000 per kW $6,335 per kW), both still incomplete. 

As Mark Cooper notes in his thorough analysis of the so-called nuclear renaissance, this is nothing new.  Most nuclear projects haven’t come in on budget, or even close.

But let’s be generous for a moment and assume the U.S. utilities can hold to their current cost estimates.  What do those costs mean to consumers?  At $6,500 per kW, the expected cost of nuclear electricity is over 15 cents per kWh ($150 per MWh).

At that price, investment bank Lazard estimates that only two technologies are more expensive than nuclear (crystalline silicon solar PV and natural gas peaking plants).  But solar PV has significant near-term cost reduction potential and “gas peaking” only refers to the way we use natural gas, not its inherent cost (see Gas Combined Cycle).  In the time it would take to build a nuclear plant (6-8 years, optimistically), every commercial energy technology could produce electricity for less.

Subsidies can change the picture – the picture most Americans have of nuclear, that is.  The Union of Concerned Scientists recently reported that nuclear subsidies total nearly 7 cents per kWh, twice what a typical wind power plant receives and similar to the federal incentives offered for solar power.  It’s time to let the market pick our winners, not outrageous government subsidies for nuclear power.

Beyond its (escalating) costs and huge subsidies, nuclear power also reinforces a centralized grid paradigm where the financial winners are utilities who pass through cost increases onto the backs of ratepayers (sometimes before the plant begins operations).  Did we mention that Florida Progress will require $3 billion in transmission upgrades to accommodate its new nuclear plants?  Compare that to distributed renewable energy sources that can often interconnect to the grid with a minimum of infrastructure upgrades.

The crisis in Japan is terrible, but we shouldn’t eschew nuclear power for its ability to cause immensely disproportionate harm during natural disasters.  Instead, we should abandon this costly boondoggle for more cost-effective and renewable energy sources.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Mar 16, 2011

Community Choice Aggregators Fight to Choose Their Power Provider

The content that follows was originally published on the Institute for Local Self-Reliance website at

Communities in California have been trying to become more energy self-reliant for nearly 10 years, but not a single one has managed to establish a “community choice aggregation” network despite a state law requiring incumbent utilities to “cooperate fully.”

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). Only four states have CCA laws on the books – Ohio, Rhode Island, Massachusetts, and California.  Most have only a single CCA; California has none.  There’s a reason.

Incumbent electric utilities aren’t big fans of CCAs.  

In California, the CCA law passed in 2002 but utilities like Pacific Gas & Electric (PG&E) have stymied the development of local CCAs, even sponsoring a ballot measure – Proposition 16 – to require towns to get a two-thirds super majority to create a CCA.  The measure was narrowly defeated (with a 52% vote) despite $46 million spent by PG&E to steamroll local choice.  The ballot measure was only the latest in a series of attempts by PG&E to quash community choice, dating back to the utility’s bankruptcy and $8 billion bailout in 2001-02. 

Advocates are continuing the fight with new legislation to clarify what was meant in the original law when utilities were ordered to “cooperate fully” with communities seeking to establish a CCA.

The CCA difference can be significant.  Ohio’s largest CCA offers customers prices averaging 5% lower than the incumbent utility.  And CleanPowerSF, the CCA certified (but not yet operational) for the City of San Francisco intends to get 51% of its power from renewable sources by 2017. 

You can read more about Community Choice Aggregation in our 2009 policy brief.

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Article filed under Energy, Energy Self-Reliant States | Written by admin | No Comments | Updated on Mar 15, 2011

Penny-wise or Pound-Foolish Policies for Renewable Energy: Auctions and CLEAN Contracts

The content that follows was originally published on the Institute for Local Self-Reliance website at

Toby Couture is one of the pre-eminent experts on cost-effectiveness of renewable energy policies and his comparative analysis of auctions (such as California recently adopted for distributed generation) and CLEAN Contracts (a.k.a. feed-in tariffs) is a must-read.  Read the full story over at our Energy Self Reliant States web site. Continue reading

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 15, 2011

Ontario’s Buy Local Renewable Energy Policy: An Update

The content that follows was originally published on the Institute for Local Self-Reliance website at

In January, we released a report – Maximizing Jobs From Clean Energy: Ontario’s ‘Buy Local’ Policy – highlighting the impressive job forecast (43,000 jobs) from Ontario’s CLEAN Contract (a.k.a. feed-in tariff) program.  News from the province suggests that the program is overcoming hurdles and continuing to grow.

Forecasts for 2011 indicate that Ontario could become North America’s largest solar market, installing 455 MW, more than twice what California installed in 2009.  This is nearly a 3-fold increase over 2010 installations.

Additionally, supply concerns have faded.  ClearSky Advisors notes that, “Though there has been concern that development would be limited by supply shortages, it is now most likely that there will be sufficient supply to meet demand from 2011 to 2015.”

Hurdles remain for Ontario.  They are still subject to a World Trade Organization complaint over their ‘buy local’ policy (discussed in detail in our report) and if liberals lose the fall elections, it could spell significant cutbacks in the province’s clean energy program. 

One recent report suggests that there are new “big fees” for project development, as well, but these fees exempt small-scale projects and a back-of-the-envelope calculation suggests that the fees will comprise less than 2 percent of projects costs.

Overall, it appears Ontario’s robust clean energy program is still on track to develop thousands of megawatts of clean energy and thousands of jobs.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 2 Comments | Updated on Mar 14, 2011

Distributed Solar PV Beats Grid Prices with “Balance of System” Cost Reductions

The content that follows was originally published on the Institute for Local Self-Reliance website at

Cutting non-module solar PV costs with best design practices could make solar PV cost less than grid electricity for more than 25 percent of Americans.

Half of the installed cost of a solar PV array is the solar module, but the other half (the “balance of system”) involves labor, assembly, and other components.  With module prices continually falling, significant decreases in total installed cost depend on reducing balance of system costs.  The Rocky Mountain Institute held a design charette last year, and the result was a concept of how to reduce balance of system costs by 58 percent in five years.

From the report’s executive summary [pdf], this chart (right) illustrates the reduced costs.

Even more interesting, the report put those cost savings in the context of the levelized cost of solar electricity.  They found that the balance of system savings (and induced reduction in module costs) could lower the price of solar PV electricity from 22 cents per kWh to 8 cents per kWh. 


To put that in context, we recently examined distributed solar’s cost compared to grid electricity prices, concluding that “solar PV at $5 per Watt (with solely the federal tax credit) could not match average grid electricity prices in any of the sixteen twenty largest metropolitan areas in the United States.”

With the Rocky Mountain Institute’s best design from their charette, that sentence reads: solar PV (with solely the federal tax credit) beats average grid electricity prices in 13 of the largest 20 metropolitan areas, representing 78 million Americans.  With time-of-use pricing plans, the number rises to 19 of 20 metro areas, representing over 100 million – one-third of – Americans. 

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 10, 2011

Is the Bloom Box Cheaper Than Solar?

The content that follows was originally published on the Institute for Local Self-Reliance website at

A month ago, I compared the fuel cell Bloom Box to distributed solar PV.  I’m not linking the posts, because I’ve updated my cost models for both technologies thanks to some good input from others.  The revised analysis follows. 

Update 3/15/11: The data in the text was accurate, but I had a labeling error in the chart. It’s fixed now.

The Bloom Box provides a plug-and-play approach to on-site electricity, using natural gas-powered fuel cells to provide stable, on-demand power.  While it competes favorably with solar PV, its cost is competitive in just a few states with high electricity prices.

Bloom Box v. Grid

Only three states (New York, Connecticut, and Hawaii) have average retail electricity prices for the commercial sector higher than the break-even price (14.7 cents) for the Bloom Box’s electricity (with natural gas at $9 per million BTU), assuming the user is able to use federal tax incentives and accelerated depreciation. A number of states (including New York, New Jersey, and California) also have state rebates for fuel cells. The following map illustrates the states where the Bloom Box breakeven price is equal to or lower than the retail electricity price for commercial users. (In blue states, the Bloom Box competes with only federal incentives; in green states, it competes with additional state incentives.)

The number of states where Bloom Boxes would make economic sense would be higher, but a recent story from Greentech Media noting that the oft cited price for a Bloom Box ($700,000-800,000) was incorrect. Instead, the unit retails for $1,250,000 with a 10-year warranty, essential because the fuel cells will require replacement at least once in that span.

Bloom Box v. Distributed Solar PV

The Bloom Box performs well compared to distributed solar PV, especially in less sunny climates. At $5 per watt, a competitive price for commercial scale installations, solar PV in sunny Phoenix and Los Angeles costs 12.3 and 14.1 cents per kilowatt hour, respectively; in New York City, solar PV costs 17.5 cents. (all prices include federal tax and depreciation incentives). Six of the 16 largest metropolitan areas (with a cumulative population of 36 million) have solar PV prices lower than the Bloom Box price, although not by a lot.

The Bloom Box and solar differ in one significant way, however. The Bloom Box produces electricity on demand and round the clock, whereas a solar PV project only produces electricity during daylight hours.

When comparing the Bloom Box to a solar PV power plant with varying storage capacities, the Bloom Box is more cost-effective, even in sunny regions.

However, even this quantitative analysis leaves out a number of additional considerations: If the goal is to provide stable, baseload power, then the PV system would need longer storage (at least in winter months with fewer daylight hours). This is especially true if the power plant is an off-grid application.

If the goal is instead to offset grid electricity, especially peak power, then the PV system may make more sense. It produces power during peak hours (when prices are higher), and even a small amount of storage capacity would be sufficient to smooth out variability during the day (e.g. periods of clouds), as well as to extend production into the high-priced, late afternoon peak period.

Additionally, the operations cost for the Bloom Box will fluctuate with fuel prices, and there are more carbon emissions associated with a fuel cell operating on natural gas than with a solar PV array (zero).

Bloom Box Financing

Bloom is emulating the creative financing tools of the solar market with a power purchase alternative to buying the fuel cells. Businesses sign a 10-year power purchase agreement at a discount to their current electricity rates and Bloom handles installation, maintenance, fuel purchasing, etc. The service mimics a popular strategy for installing solar PV on residential and commercial rooftops. Bloom purportedly offers a 5 to 20 percent discount to California’s 14-cent per kilowatt-hour average commercial electricity price, so the power purchase arrangement would likely only work in states with comparable or higher electricity rates.

Overall, the “power-in-a-box” concept can serve commercial and industrial enterprises with round-the-clock power needs very well and it’s a promising start for distributed electricity production from fuel cells. As prices for both technologies fall, the Bloom Box fuel cell and solar PV power plant will be complementary components of a distributed grid.

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