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Term for Energy

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Apr 19, 2011

Oregon Town Gets a Lot of Solar for a Little Money

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/oregon-town-gets-lot-solar-little-money/

The upfront cost has always been the biggest barrier to solar PV adoption, and one Oregon town has found an innovative way to help its citizens buy down that cost.

The city borrowed from the sewer account to offer no-interest loans of $9,000 each. The repayment schedule, over four years, is tied to residents’ tax returns each spring, when they receive refunds of state and federal renewable energy tax credits.

All told, Lehman estimates the program will cost the city only $10,000 in lost interest over four years.

While the loan terms are short (4 years), the repayment plan is tied to the state and federal tax credit schedule, essentially allowing interested home and business owners the chance to finance solar directly with those credits, rather than having to put their own money up front.

The loan program spurred over 50 solar PV installations in 2010, in a town of just 16,500 residents.  The residents not only received discount financing, but the city helped aggregate the purchase of the solar panels to get participants a “group buy” discount.  Assuming a system size of 3 kilowatts and installed cost of $6.00 per Watt, the city’s $10,000 investment got their residents approximately $1 million worth of new solar power.

The increase in solar installation activity had an effect even for those who didn’t use the town’s financing option:

Ken Abbott, a retired postal employee, didn’t use the loan program but took advantage of the lower installation prices that resulted from the large number of buyers.

Pendelton’s lesson to cities is that you don’t need a lot of money to make it a lot easier to go solar.

Photo credit: Flickr user chdwckvnstrsslhm

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

Smaller Generation Incites Largest Renewable Energy Gains

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/smaller-generation-incites-largest-renewable-energy-gains/

While seeming counterintuitive, a focus on smaller-scale distributed generation enables more and faster development of cost-effective renewable energy.

Last week I wrote about the illusion that we can “move forward on all fronts” in renewable energy development; rather, a bias toward centralized electricity generation in U.S. policy reduces the potential and resources for distributed generation. 

Solar Economies of Scale Level Off at 10 Kilowatts

In contrast, distributed generation provides unique value to the grid and society, and its development can also smooth the path for more centralized renewable energy generation.

First, distributed generation is cost-effective.  Economies of scale for the two fastest-growing renewable energy technologies (wind and solar) level off well within the definition of distributed generation (under 80 megawatts and connected to the distribution grid).  Solar PV economies of scale are mostly captured at 10 kilowatts, as shown in this chart of tens of thousands of solar PV projects in California.  Wind projects in the U.S. are most economical at 5-20 megawatts, illustrated in a chart taken from the 2009 Wind Technologies Market Report.   

Besides providing economical power relative to large-scale renewable energy projects, distributed renewable energy generation also has unique value to the electric grid.  Distributed solar PV provides an average of 22 cents per kWh of value in addition to the electricity produced because of various benefits to the grid and society.  The adjacent chart illustrates with data coming from this analysis of the New York electric grid.  Grid benefits include peak load shaving, reduce transmission losses, and deferred infrastructure upgrades as well as providing a hedge against volatile fossil fuel prices.  Social benefits include prevented blackouts, reduced pollution, and job creation.

Distributed wind and solar also largely eliminate the largest issue of renewable power generation – variability.  Variability of solar power is significantly reduced by dispersing solar power plants.    Variability of wind is similarly reduced when wind farms are dispersed over larger geographic areas.

Not only are integration costs reduced, but periods of zero to low production are virtually eliminated by dispersing wind and solar projects over a wide area.

As mentioned at the start, distributed generation also scales rapidly to meet aggressive renewable energy targets.  Despite the conventional wisdom that getting big numbers requires big project sizes, the countries with the largest renewable energy capacities have achieved by building distributed generation, not centralized generation.  Germany, for example, has over 16,000 megawatts of solar PV, over 80 percent installed on rooftops.  Its wind power has also scaled up in small blocks, with over half of Germany’s 27,000 megawatts built in 20 megawatt or smaller wind projects.  In Denmark, wind provides 15-20 percent of the country’s electricity, and 80 percent of wind projects are owned by local cooperatives.

With all these benefits, distributed generation can also smooth the way for centralized renewable energy, in spite of energy policies that favor centralized power.  When distributed generation reduces grid stress and transmission losses by provided power and voltage response near load, it can defer upgrades to existing infrastructure and open up capacity on existing transmission lines for new centralized renewable energy projects.  A focus on distributed generation means more opportunity for all types of renewable energy development.

It may seem counterintuitive, but distributed renewable energy should be the priority for reaching clean energy goals in the United States.

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filed under Energy | Written by John Farrell | No Comments | Updated on Apr 13, 2011

On Solar Power Installations

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/solar-power-installations/

“Most of the action has still been in small, distributed stuff,” [Ryne Raffaelle, director of the National Renewable Energy Laboratory’s National Center for Photovoltaics.]  said. “That in itself poses a lot of challenges because our power system existed under large centralized power station models since its inception.”

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Rooftop Solar Installation
Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 3 Comments | Updated on Apr 12, 2011

Distributed Solar Power Worth Far More Than Electrons

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/distributed-solar-power-worth-far-more-electrons/

From the ability to reduce peak demand on the transmission and distribution system, hedge against fuel price increases, or enhance grid and environmental security, solar power has a monetary value as much as ten times higher than its energy value. The cost of residential-scale distributed solar PV is around 23 cents per kilowatt-hour (kWh) in… Continue reading

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Apr 8, 2011

More on Centralized v. Decentralized Solar

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/more-centralized-v-decentralized-solar/

A recent Colorado news story captures the spirit of my last post on the tension between centralized and decentralized renewable energy generation, with a quote that describes the conventional (environmentalist) wisdom:

It’s not an either or choice, that we only put solar on rooftops or on people’s homes or do utility scale, large projects,” said Pete Maysmith, executive director of the Colorado Conservation Voters.

“As we move forward toward energy independence, reducing our dependence on foreign oil, on dirty, polluting sources of energy like coal, we need to move forward on all fronts with renewable [energy], and that includes rooftop solar and community solar gardens, local power. It also includes utility-scale solar that is properly sited, and that’s really important.” [emphasis added]

As I illustrated with the example of FERC’s lavish incentives for new high-voltage transmission lines, the principled stand of “moving forward on all fronts” collapses in the face of incentives strongly skewed toward centralized power generation.  From rich federal incentives for centralizing infrastructure to the basic structure of federal tax incentives, distributed generation operates at a disadvantage.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Apr 7, 2011

Centralized v. Decentralized Clean Energy – We May Have to Choose

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/centralized-v-decentralized-clean-energy-we-may-have-choose/

In the clean energy community, collaborative meetings often reveal a unity around goals (maximizing clean energy production and use) but a disagreement over the means.  It’s not that people oppose distributed generation, but rather they see it as a secondary approach to meeting long-term clean energy goals.  The following conversation is typical: Advocate 1: Cheap… Continue reading

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Apr 5, 2011

Solar is Contagious

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/solar-contagious/

Update 4/6/11: Adam responds on a listserv; his comment is added below.

Adam Browning of Vote Solar writes about a recent study of the peer pressure effect of solar PV adoption.  The linked study notes that for every 1 percent increase in the number of installations in a single ZIP code, there’s a commensurate 1 percent decrease in the amount of time until the next solar installation.  As he writes, “solar is contagious!”

I’m a data lover, so I thought it would be interesting to see what this looks like over time.  If you start with a neighborhood with 25 solar installations, where it was 100 days between the 24th and 25th installation, this peer pressure effect will reduce the time between installations to just 10 days by the 250th PV project. (see chart)

Of course, this process takes a while to unfold.  In fact, if solar PV was being installed only once every 100 days at the outset, the peer pressure effect will take over 15 years to reduce the time between neighborhood installs to 10 days. 

The second line on the chart (red) looks at the change if you start with 25 solar installations but with a time between installs of just 30 days.  By the 250th PV project, the time between installs has dropped to 3 days.  And because the lag time between installations started so much lower, the 10-fold drop in lag time takes less than 5 years. 

The basic formula – written another way – seems to be that a 10-fold increase in local solar installations will result in a 10-fold drop in the time between installations. This will hold true through the second iteration, as well.  In the neighborhood with an initial 100-day lag between installations, it will take another 15 years for the lag to drop to 1 day from 10 days, reaching this level when there are 2,500 local PV projects installed.

Perhaps I can amend Adam’s statement: solar is contagious, but it’s not yet very virulent.

Update (Adam’s reply): I would note that the current strain  (solar expensivus) is not a virulent as future strain (solar cheapus).  Minnesotans are expected to have low resistance — we are talking major epidemic levels of contagion.

Note: If only the experience cost curve for solar PV worked at the neighborhood level, since it typically shows a halving of installed cost for every 10-fold increase in total installed solar capacity (worldwide)! 

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Mar 31, 2011

Distributed Solar: Cleaner and Smarter than Oil

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/distributed-solar-cleaner-and-smarter-oil/

A delightful infographic from 1BOG, residential solar aggregators who are driving down the cost of solar PV across America. 

They also note that the cleanup cost for the oil spill – $32 billion – would buy enough solar to power all of Los Angeles county for 30 years, for less than 15 percent of what Los Angeleos are expected to pay through 2040.

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current-solar-permit-costs
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 http://www.ilsr.org/colorado-solar-permitting-fees-may-fall-new-legislation/

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 http://www.ilsr.org/uk-solar-incentive-cuts-may-also-distribute-solar-rewards-more-widely/

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
GBP USD Size
£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
GBP USD Size
£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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