Georgia Regulators Force State Utility to Embrace Solar Energy

by | Jul 12, 2013 | Uncategorized

Environmentalists, conservatives and solar startups celebrate as the influential state utility Georgia Power is mandated to expand the amount of solar energy it generates. The newly approved program requires Georgia Power to purchase solar power from solar firms, growing Georgia’s solar industry. Read Kiley Kroh’s article to learn about the Koch brother’s attempts to undermine conservative support for the initiative.  Greg Bluestein and Kristi E. Swartz’s article below outlines Georgia’s path to an exciting future for the State’s energy consumers and solar energy producers.


By Greg Bluestein and Kristi E. Swartz

State regulators forced Georgia Power on Thursday to expand the amount of solar energy it generates, putting the company on the rare losing side of a political battle. But the vote was just a skirmish compared with bigger battles ahead for the powerful utility. 

It faces a double-whammy of upcoming votes before the Public Service Commission on approving new costs for its nuclear expansion project and a proposed 6 percent rate hike to fund new equipment. And a legislative fight looms over a proposal to create a new solar monopoly that could challenge Georgia Power’s grip on state utilities. 

The all-Republican commission’s 3-2 vote was a significant defeat for the Atlanta-based company, which had warned it already generated more than enough energy for its customers. Opponents also said that adding 525 megawatts of solar by 2016 would inevitably drive up rates, although Georgia Power, in a surprising about-face, backed off that argument on Thursday after months of making that case. Instead, its attorney said for the first time that the added solar likely wouldn’t affect power bills. 

In the aftermath of Thursday’s vote, the odd coalition of environmentalists, conservatives and solar startups behind the expansion barely paused to savor their win. Some emboldened activists said the victory gave them new hope they could successfully challenge the utility on other contentious issues.

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RENEW’s Michael Vickerman Examines Utility Arguments Against Third Party Solar Arrangements

by | Jul 11, 2013 | Uncategorized

To: Clean Energy Choice Supporters
From: Michael Vickerman
Date:   July 10, 2013
Our grassroots campaign is beginning to catch the attention of utilities. Shortly after one county board passed a resolution in support of Clean Energy Choice, a utility representative contacted a board member and expressed his company’s dismay over the vote. This representative said that the reason utilities oppose Clean Energy Choice is that third party arrangements enable customers to use less utility-provided energy, which reduces revenues to utilities. The result is that the fixed costs associated with utility electric service are spread over a smaller rate base, which drives rates higher.
Let’s examine this argument in greater depth.
First, the argument can be applied with equal force to customer-owned self-generation. The impact from a rooftop solar electric system to utility revenues is the same no matter who owns the system.  If the solar system results in a 50% reduction in electricity consumed by the customer, that reduction is based on the amount of energy produced by the system relative to the amount of grid-supplied electricity consumed by that customer. The question of who owns the system is immaterial to that calculation.
Of course, the same argument could be levied against energy efficiency. If a retrofit of a building’s lighting system results in a 40% reduction in electricity usage, that reduction would be the same whether the new lights are owned by the building owner or by a third party service provider like Johnson Controls, which is in the business of saving customers money by reducing their consumption of energy. It’s interesting, though, that utilities are careful not to complain about energy efficiency’s impact on their rates, even though a kilowatt-hour (kWh) not consumed as a result of efficiency has the same effect on utility revenues as a kWh produced behind the meter and consumed on site. As with self-generation, the question of who owns the efficient lighting system does not affect the outcome.
Now, if the utilities figure out a way to overcome their basic hang-ups about solar energy, and resolve instead to provide solar-generated kWh to their customers who desire such a service, we wouldn’t be having this argument. There is nothing to prevent a utility from offering a voluntary solar service to customers. This service could be provided to any customer who wants their electricity to come from sunshine, including those who don’t have any access to sunshine on their premises and thus cannot host PV systems themselves. This is one group of potential solar customers that only the local utility can serve in a rate-regulated environment. Remember, a utility can place solar systems anywhere in its distribution system to serve individual customers who are willing to pay for such a service. But they have decided, at least for the time being, to remain fully committed to a fossil fueled future, to the point of obstructing customer efforts to supply themselves with solar energy. In so doing they are walking away from a golden opportunity to serve large subset of customers with solar energy that, due to shading or suboptimal roof orientation or lack of space, cannot be produced on their premises.  
It should be remembered that customers who reduce their consumption of fossil generated electricity through efficiency and on-site renewables furnish fellow utility customers the health and sustainability benefits of clean, non-CO2 producing electricity free of charge. The economic reward to system hosts from these pathways comes from bill savings, nothing more.  If the utilities are willing to engage in a serious discussion on a fair allocation of costs and benefits, they must acknowledge the need to incorporate adverse health and environmental impacts into the cost of electrical service, and not leave that particular tab to taxpayers.    
Summary: the question of system ownership is irrelevant to utility rate impacts.  Energy conservation and on-site generation have the exact same impact on rates. If on-site generation is undesirable from a ratepayer perspective, then so is energy conservation, if we extend the utility argument to its logical end point. And, lest we not forget, third-party contracts for renewable energy fill a void created by utility unwillingness to serve their own customers with clean resources that have demonstrated market appeal.
With each passing day, the battle lines between the solar community and utilities resistant to solar continue to sharpen, as evidenced by the four dispatches below.

Utilities Battle the Inevitable: Rooftop Solar

Grid Politics

Beyond the Keystone Pipeline 

Regulators In Two U.S. States Reject Lower Payments To Solar Homes

Will Wisconsin Ever Let the Sunshine In?

by | Jun 19, 2013 | Uncategorized

A commentary
by Michael Vickerman, Director, Policy and Programs, RENEW Wisconsin

Once
dismissed by electric utilities as a boutique energy resource, solar power has
become the go-to renewable resource for a wide variety of electricity
customers. From data centers to department stores, from airports to auto
dealerships, more and more customers around the country are tapping into this
clean and quiet energy source that shines on their rooftops every day.
Nationally,
solar energy’s growth has been nothing short of phenomenal. In the first
quarter of 2013, solar energy accounted for nearly half (49%) of the new
generating capacity built, elbowing out wind and natural gas as the fastest-growing
energy source in the United States. Declining installation costs coupled with
easier access to third-party owned systems account for solar’s rapid
advancement, especially in the residential sector. Even utilities in select
states have begun diversifying their resource mix with large solar arrays.
For-profit
businesses and homeowners in all 50 states can take advantage of the 30%
federal investment tax credit in place through 2016. However, not all 50 states
have flourishing solar markets. This is true even in states where electric
rates are high enough to tempt homeowners and businesses to supply themselves
with energy from the sun. Unfortunately, Wisconsin happens to be one of those
states with a languishing solar market, though it wasn’t always that way.  
Five years
ago, Wisconsin was a regional leader in encouraging customer investments in
rooftop solar. Early adopters then could avail themselves of special solar
buyback rates which most electric providers offered on a limited basis. For customers
of utilities that did not offer these higher rates, a fair and transparent net
metering service was available. The state’s Focus on Energy program contributed
significantly to solar’s early success with grants and incentives that
supported start-up installation contractors. In fact, that program instilled
them with confidence that Wisconsin was a solid place to do business.  
Fast forward
to today, and you see a very different market environment for solar energy
here.  Attractive buyback rates in
Wisconsin have become a distant memory. Some utilities have restructured their
net metering service to make self-generation substantially less appealing to
customers. And while state incentives for solar installations are still
available, the flow of dollars has been reduced to a modest trickle. Solar
contractors, like the rest of Wisconsin’s renewable energy business community,
cope with the hard times by pursuing work opportunities in neighboring states
like Iowa and Minnesota.
The
installed costs of solar today are about half of what they were in 2008, while
the price of utility-supplied electricity continues to move higher. Given the
fact that solar’s return on investment to customers has never been higher, the
attitudinal about-face we’re seeing is as inexplicable as it is
counterproductive.
While
Wisconsin raises the proverbial drawbridge to protect utilities from solar’s
advances, the state of Minnesota, in stark contrast, has rolled out the welcome
mat to this emerging industry. Just one month ago, Minnesota became the first
state in the Upper Midwest to establish a solar electric standard. By 2020, the
state’s largest utilities will need to source 1.5% of the electricity they sell
at retail from solar generation systems. 
Through the
same law, Minnesota strengthened its net metering policy, and required Xcel
Energy, the state’s largest utility, to provide a community solar service to
its customers. This innovative provision will enable Xcel customers who can’t
host a solar system on their premises to invest in a nearby installation and
receive a modest return through their monthly bills.  
What does
Minnesota hope to achieve by adopting such an aggressive solar energy policy?
The list of
objectives is long:
Ø  Promote manufacturing and contracting
opportunities for solar energy and “green” construction firms;
Ø  Expand employment opportunities
for the state’s work force;
Ø  Enhance the ability of business
and residential customers to manage their electricity costs;
Ø  Modernize the state’s electrical
infrastructure and diversify its resource mix;
Ø  Attract private investment
capital into its energy sector from both in-state and out-of-state sources;
Ø  Minimize exposure to fuel price
volatility, especially during on-peak hours;
Ø  Reduce greenhouse gas emissions
associated with electricity generation;
Ø  Reduce imports of fossil fuel;
and
Ø  Promote the state as a
destination location for clean–tech companies. 
Ironically,
the ingredients are now in place for an instructive side-by-side study on the
value of state policy in advancing solar energy, with Minnesota serving as the
test case and Wisconsin serving as the control. In terms of both solar resource
and utility regulatory structure, the two states are very similar to each
other.  And, with each state having about
14 megawatts of installed solar capacity, both share the same baseline from
which to measure progress.
Indeed, the
only significant difference going forward is state energy policy. In Minnesota,
solar is subject to a state mandate that is projected to increase current
capacity, in seven short years, by a factor of 30. In adjoining Wisconsin,
solar operates within a policy vacuum. 
This raises
the question, what do we gain from participating in an experiment in which
Minnesota reaps all the economic and environmental benefits from its solar
investments while we get to send more dollars out of state for fuel
to feed 40-year-old power plants?
The fact is
that Wisconsin cannot afford to stand idly by while Minnesota plugs itself squarely
into a dynamic industry segment and exerts a gravitational pull on private
investment and start-up companies in the region. It’s no secret that Wisconsin
has struggled to find its economic bearings in the wake of the Great Recession.
In contrast, clean energy has provided a great lift in other states that had
the foresight to sow the marketplace with some well-thought and welcoming
policy seeds.
In a popular
two-part Simpsons episode, the diabolical Montgomery Burns builds a
giant disc to block the sun’s rays from reaching Springfield, forcing city
residents to become even more reliant on the power plant he owns. Though
clearly cartoon satire, those of us who are 
watching the ongoing retreat from solar energy know that if Wisconsin
has any chance of capturing at least its proportional share of an industry that
yielded $11.5 billion in new projects in 2012, it has to ditch the Mr. Burns
act and begin designing a policy to let the sunshine in.

Green Tech Solar’s U.S. Solar Market Insight Reports 3,000 Unsubsidized Solar Installations in California in First Three Months of 2013

by | Jun 14, 2013 | Uncategorized

Falling residential PV system prices suggest an unprecedented shift in the U.S. solar market and by extension the entire electricity market. How utilities decide to approach solar energy will significantly impact the direction of this shift. Read Shayle Kann’s commentary on the report below.

In the first quarter of this year there were 71.3 megawatts of
residential solar installed in California’s three investor-owned utility
territories, according to our just-released U.S. Solar Market Insight report. Of that total, 13.2 megawatts (18.5 percent) were installed without the support of rebates from the California Solar Initiative (CSI) or any other state-level program.

It would be hard to overstate the significance of this, so I’ll
reiterate. In the first three months of this year, around 3,000
residential solar installations were completed in California with no
state incentives. These installations did benefit from a number of
things: full retail net metering (we’ll come back to this), the federal
Investment Tax Credit and accelerated depreciation, and California’s
relatively solar-friendly rate structures. But even so, this is emblematic of a sea change in the solar industry and, even more importantly, the energy industry.

Historically, residential solar markets in the U.S. were exclusively
driven, and constrained, by state- and utility-level incentives, often
in rebate form. When a sufficiently large rebate was introduced, the
market reacted, but once rebate funding was depleted, the market
disappeared. This served as a de facto cap on residential solar growth,
and it is why the California statistic is so significant. If state-level
incentives are no longer required, there are 3.5 years of runway before
the ITC expires for the market to adapt, expand and mature. Assuming
nothing else serves as a major barrier — and this is a big “if” given
net metering battles and the ever-increasing need for project finance —
the sky is the limit.

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Solar powering your community with Clean Energy Choice

by | Oct 26, 2012 | Uncategorized

Clean Energy Choice (sometimes called third-party ownership) allows a customer to get electricity from a third-party which installs and maintains a renewable energy system on the customer’s premises.

With Clean Energy Choice, customers don’t have to put any money upfront, the major barrier to installing renewables. The customer either buys the output directly from the third-party owner or pays to host the energy-producing equipment and uses the electricity without any further cost under a long-term contract.

From a presentation by Michael Vickerman, RENEW director of policy and program, at Solar Powering Your Community, October 11, 2012: 

  • No up-front capital required from host customers 
  • Allows nonprofit entities to partner w/ for-profit companies that can use the 30% federal tax credit 
  • Based on a successful model for delivering energy efficiency (performance-based contracts) 
  • Could lower energy costs for customers over the contract life 
  • Hugely successful in states that allow it (e.g., California and Colorado) 
  • It’s your premises, after all