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

Severe Volatility Illustrates the Risks of Using Solar RECs

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/severe-volatility-illustrates-risks-using-solar-recs/

This is a little taste of a project I’m doing comparing solar renewable energy credits (SRECs) with a state solar mandate to Clean Contracts (a.k.a. feed-in tariffs).  One metric for comparison is the risk created by market uncertainty, and there’s no better illustration of the risk and uncertainty in SREC markets that this chart.  In the past 9 months, SREC prices have tumbled in nearly every market in the U.S. 

Chart of Solar Renewable Energy Credits in Seven U.S. States August 2009 to 2011

The cause is the same everywhere – the solar industry met the state mandate, cratering demand for SRECs.  Prices won’t recover until the market slows down. 

From an Econ 101 standpoint, SRECs beautifully price market demand and are a powerful indicator of when the state-created market is saturated.  From an industry standpoint, however, they represent a real roller coaster.  It’s hard to be a solar installer when your entire market dries up for 9 months waiting for next year’s quota to roll in (in NJ and PA, legislation is being considered to accelerate the state mandate to solve the problem). 

Clean contracts (if uncapped) solve the problem, because the market doesn’t bust (of course, a solar mandate that can keep ahead of supply would also work). 

But rather than pricing market demand (as SRECs do), Clean contracts attempt to price the cost of solar.  It’s one reason why they tend to deliver lower cost solar to market than SREC markets or mandates.  And as you can see in this chart from a previous post, even Germany’s Clean contract (feed-in tariff) program more closely approximates the cost of solar in New Jersey that New Jersey’s SREC price.

It’s a serious question for policy makers to consider when creating a market for solar.  Is an SREC market that depends on a state solar mandate any more “market-based” than Clean contracts that simply provide a standard offer to solar developers?  And if the latter means cheaper solar for ratepayers, then shouldn’t that trump considerations of “markets”?

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Sep 2, 2011

Putting the Sun to Work for Minnesota

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

This is the best video you will ever see supporting a state solar energy standard, submitted for a contest hosted by Environment Minnesota.

 

For more information on the solar energy standard for Minnesota, see Environment Minnesota’s website as well as Solar Works for MN.

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Clean Local Energy for Kentucky
Article, Resource filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Aug 31, 2011

Clean, Local Power for Kentucky

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

In August 2011, ILSR Senior Researcher John Farrell gave this presentation to a group of rural utilities and environmental organizations in Kentucky.  The slides illustrate the enormous renewable energy potential in Kentucky and the cost-effectiveness of clean, local power in meeting the state’s electricity and economic needs. Clean Local Power for Kentucky View more presentations… Continue reading

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Aug 25, 2011

Why ‘Market-based” is a Poor Criteria for Good Solar Policy

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/why-market-based-poor-criteria-good-solar-policy/

Updated 8/26/11 and 9/1/11

Many renewable energy advocates argue that the market for solar renewable energy credits (SRECs) is a more cost-effective tool for incentivizing solar power than a feed-in tariff (or CLEAN contract) set in a regulatory proceeding. 

Really?

This chart illustrates the installed cost of solar in New Jersey from 2006 to 2011 (as reported by the National Renewable Energy Laboratory in Tracking the Sun III and converted to levelized cost) in green, the New Jersey SREC spot market price in red, and the German feed-in tariff price (constant exchange rate, adjusted for NJ solar insolation) for rooftop solar projects 30 kilowatts and smaller in blue. (Update 9/1: the previous chart showing solar cost in $ per Watt is here).

Does a “market-based” policy do a better job of matching the actual cost of solar? 

This comes to mind: “one of these things is not like the other…”

Update 8/26: I should add that the German feed-in tariff is the only source of revenue for solar projects, whereas the SREC in New Jersey comes in addition to the federal 30% tax credit and accelerated depreciation (and net metering).  Since the two federal incentives (and net metering values) have not changed, the fact that the SREC value is rising against the tide of falling solar prices is even more absurd.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Aug 18, 2011

U.S. Could Get 20% of Its Power from Solar on Transmission Line Right-of-Way

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/us-could-get-20-its-power-solar-transmission-line-right-way/

Ontario Hydro transmission line forest cutUpdate 8/23/11: While solar can be built right under high voltage transmission lines, it can’t necessarily interconnect right at the tower.  Thus, this piece should be read as an analysis of land use rather than easy interconnection.

What if the U.S. could get 20 percent of its power from solar, near transmission lines, and without covering virgin desert?

It can.  Transmission right-of-way corridors, vast swaths of vegetation-free landscape to protect high-voltage power lines, could provide enough space for over 600,000 megawatts of solar PV.  These arrays could provide enough electricity to meet 20% of the country’s electric needs.

It starts with the federal Government Accountability Office, which estimates there are 155,000 miles of high-voltage transmission lines in the United States (defined as lines 230 kilovolts and higher).  According to at least two major utilities (Duke Energy and the Tennessee Valley Authority), such power lines require a minimum of 150 feet of right-of-way, land generally cleared of all significant vegetation that might come in contact with the power lines.

That’s 4,400 square miles of already developed (or denuded) land for solar power, right under existing grid infrastructure. 

Of course, the power lines themselves cause some shading, as may nearby trees (although the New York Public Service Commission, and likely other PSCs, has height limits on nearby trees that would minimize shading on the actual right-of-way).  To be conservative, we’ll assume that half of transmission line right-of-way is unsuitable for solar. 

That leaves 2,200 square miles of available land for solar.  With approximately 275 megawatts (MW) able to be installed per square mile, over 600,000 MW of solar could occupy the available right-of-way, providing enough electricity (over 720 billion kilowatt-hours) to supply 20 percent of U.S. power demands (note: we used the average annual solar insolation in Cincinnati as a proxy for the U.S. as a whole).

Making big strides toward a renewable energy future doesn’t require massive, remote solar projects, but can use existing infrastructure or land to generate significant portions of our electricity demand.  Transmission right-of-way, providing 20% of U.S. electricity from solar, is just one piece of the puzzle, with another 20% possible using existing rooftops and a solar potential of nearly 100% from solar on highway right-of-way.  Solar can help achieve a 100% clean – and local – energy future.

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

SolarShare Bonds Help Democratize Ontario’s Electricity System

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/solarshare-bonds-help-democratize-ontarios-electricity-system/

Thanks to innovative energy policy, residents of Ontario can invest in local solar power projects by buying SolarShare bonds. The $1,000 bond provides a 5% annual return over five years and the money is invested in solar power projects across the province (as the chart below shows, this beats a savings account with 0.8% interest or even a 5-year U.S. treasury, with 0.91% interest). Continue reading

Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | 1 Comment | Updated on Aug 9, 2011

Local Solar Could Power the Mountain West in 2011, All of America in 2026

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/local-solar-could-power-mountain-west-2011-all-america-2026/

The Germans have installed over 10,000 megawatts of solar panels in the past two years, enough to power 2 million American homes (most of Los Angeles, CA).  If Americans installed local solar at the same torrid pace, we could already power most of the Mountain West, could have a 100 percent solar nation by 2026, while enriching thousands of local communities with new development and jobs.

The following map shows the states that could be powered by solar if the U.S. kept pace with Germany on solar power in the past two years (installed the same megawatts on a per capita basis).

Solar Would Power the Mountain West if The U.S. Kept Pace with Germany

The spread of solar has not resulted in covering natural areas or fertile land with solar panels.  Rather, 80 percent of the solar installed in Germany was on rooftops and built to a local scale (100 kilowatts or smaller – think the roof of a church or a Home Depot store).  Solar in the U.S. also can use existing space.  The following map shows the amount of a state’s electricity that could come from rooftop solar alone, from our 2009 report Energy Self-Reliant States:

State Potential Rooftop PV:

While the local rooftop solar potential of these states varies from 19 to 51 percent, there’s much more land available for solar without covering parks or crops.  Once again, data from Energy Self-Reliant States (p. 13):

On either side of 4 million miles of roads, the U.S. has approximately 60 million acres (90,000 square miles) of right of way. If 10 percent the right of way could be used, over 2 million MW of roadside solar PV could provide close to 100 percent of the electricity consumption in the country. In California, solar PV on a quarter of the 230,000 acres of right of way could supply 27% of state consumption.

Such local solar power also provides enormous economic benefits.  For every megawatt of solar installed, as many as 9 jobs are created.  But the economic multiplier is significantly higher for locally owned projects, made possible when solar is built at a local scale as the Germans have done.

With local ownership, making America a 100% solar nation could create nearly 10 million jobs, and add as much as $450 billion to the U.S. economy. 

The Germans have found the profitable marriage between their energy and environmental policy.  It’s time for America to discover the same opportunity.

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Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Aug 3, 2011

Could Rooftop Solar Prevent Texas Blackouts?

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

Just a reminder that while Texas swelters and its electric grid sags, rooftop solar PV alone could meet 35 percent of the state’s electricity needs. Map from Energy Self-Reliant States:

State Potential Rooftop PV:

 

Not only is the potential high, but the cost is low.  The levelized cost of solar is just 14 cents per kilowatt-hour in Texas, when including the federal 30 percent tax credit.  Cost estimates from ILSR.

Levelized Cost of Solar PV @ $3.50/W over 25 years – 30% ITC included

Texans should start using the sun to beat the heat.

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ILSR energy program slide.014
Article filed under Energy, Energy Self-Reliant States | Written by John Farrell | No Comments | Updated on Aug 3, 2011

ILSR’s Energy Work, In 16 Slides

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/ilsrs-energy-work-16-slides/

Find out why and how ILSR has been helping communities maximize the value of their local energy resources for nearly 40 years: ILSR’s Remarkable Energy Self-Reliant States and Communities program View more presentations from John Farrell Continue reading