Solar for All – Jan/Feb 2013- Sierra Magazine – Sierra Club; Read Comments and Join the Conversation January 10, 2013
Posted by Laura Arnold in Uncategorized.
Tags: Alliance for Renewable Energy (ARE), Bob Tregilus, community solar, German feed-in tariff, Sierra Magazine, Southern Indiana Renewable Energy Network (SIREN)
Solar for All – Jan/Feb 2013- Sierra Magazine – Sierra Club. < Please click this link and read this article first.
Dear IndianaDG Readers:
I highly recommend reading this recent article in the Sierra Club Magazine. I also recomment, however, that you also read this comment on the article from Bob Tregilus who is a fellow member of the Steering Committee of the Alliance for Renewable Energy (ARE) along with people like John Farrell with the Institute for Local Self-Reliance and Paul Gipe with Wind-Works.org.
A conversation has also started recently on the List Serve for the Southern Indiana Renewable Energy Network (SIREN) concerning this article. “Solar for All” provides a good foundation and starting point for a serious discussion here in Indiana and perhaps our neighboring coal dependent states.
Hopefully, this article from Sierra Magazine as well as the comments below will foster more discussion about the right path for our energy policy. Let me know what you think.
Laura Ann Arnold
Bob Tregilus · Co-Host at This Week in Energy (TWiE) podcast
Hum, sorry, this comment grew during editing…anyway great article Paul, however, in your conclusion you state: “But if my neighbors and I figure out how to launch our solar co-op, and the folks on the next block do the same, and the next block after that, eventually our utility is going to start running out of customers, and will exert what political juice it has to slow the process. But that can only last so long. Remember grid parity—when solar power becomes as cheap as or cheaper than electricity from fossil fuels? When that time comes, neither lobbyist nor bureaucrat will be able to hold back the clean energy tide…” Actually, the utilities are already, and have been–for many years–purposely “slowing the process” by intentionally creating uncertainty though manipulating the byzantine mix of renewable energy policies a…t the federal, state and local levels, a few of which you discuss in your article.
And you fell into their trap, however, by describing the German feed-in tariff (FIT) as a subsidy. A subsidy (under a U.S. definition) refers to a taxpayer financed program, but FITs are simply payment for generation at a fair price that ensures the operator a reasonable return on their investment. The German FIT program is paid for by ratepayers through their utility bills, just like all other energies they purchase each month.
(Sidebar: People forget there’s a wide mix of energy we purchase even beyond the better known sources such as gas and coal. There’s also ancillary services, such as spinning reserves, peak power and so forth–some of which are far far far more expensive than renewables are, and in Germany, they use their FIT purchased energy *first* so as to offset those more expensive forms, thus saving money. It’s called the merit order effect, but I’m digressing into the weeds.)
So price fixing isn’t a subsidy, it’s simply the way highly regulated energy markets work: state public utility commissions set prices (or approve them) all of the time. Therefore, through manipulating that sacrosanct American myth of “free markets” (oy vie) the utilities have assured that the U.S. will fall further and further behind in the deployment of renewable energies. They clearly don’t want consumers playing in their sandbox.
Other examples of how they (and our complicit energy “experts”) have been “slowing the process” are:
(1) Renewable portfolio standards (RPS) which create de facto caps on the deployment of renewable energies. Here in Nevada, because of poor design, our utility went out and bought a ton of RE credits (RECs) (mostly from Idaho) such that they are now complainant with the state RPS through 2018 or so. (The Germans don’t have any RPSs. Their FIT program is open ended, the more capacity, the merrier!)
(2) Net-metering caps. Most states only allow a small percentage of one to two percent of peak load to be net-metered. There are exceptions however. Colorado, for example, has no aggregate capacity limit. However, most states do. In Nevada, it’s set at two percent. Net-metering, therefore, will certainly “hold back the clean energy tide.”
(3) The third party leasing rent-to-own outfits like Sungevity, but more importantly, Solarcity, which just went public with an IPO, fight tooth and nail to protect scarce capacity carveouts (from the state RPSs) so as to bolster their chosen business models as the expense of all others. The same goes for the utility-scale folks. The in-fighting, due in part to the small de facto caps of the RPSs, have significantly slowed the deployment of renewables in the U.S.
(4) Most importantly is how we connect distributed renewable energies to the grid in the U.S. You somewhat danced around the problem in your article (however, you did touch upon it–big kudos for that!) but the most salient difference between the American net-metering program and the German feed-in tariff is that net-metering is *retail* energy whereas the FIT is *wholesale* energy. Thus, net-metering does little more than offset onsite loads and in the process it shifts the rate burdens of lost customers onto other ratepayers. Those rate burdens also include all of the utility’s overhead as well since compensation is at the retail rate. A FIT, on the other hand, as wholesale energy feeds the energy directly into the electric grid and is used–by law–first. That means $0.30kWh solar from some grandmother’s cottage in a German village somewhere in Bavaria is used to displace $1.00kWh peak energy from an ancillary service provider.
Of course, there’s tons more nuances to all of this as I’m sure you are aware. All of that said, you actually do touch upon an.
It’s true, sort of, but not if the current set of polices remain in place, and sadly, that seems to be thrust of our energy “visionaries” such as Sen. Harry Reid, Pres. Bill Clinton and Robert F. Kennedy Jr., all of whom have been at the forefront praising Germany for their successes, but then immediately telling Americans how we need to bolster our failed programs of the past.
The Sierra Club, and in particular, the Beyond Coal campaign, is complicit in that as well by placing far far far too much emphasis on utility-scale renewable energies–and all of the parasitic costs that go along with solar strip mines in our deserts–rather than on energy democracy–distributed locally owned generation that scales the technologies and soft costs, resulting in reduced prices.
Germany got to where they are by leveling the playing field and allowing everyone to participate equally–and meaningfully–in energy production. It’s energy justice, or as many like to call it: energy democracy. That is the cornerstone of what the Germans call energiewende–loosely translated as “energy transition,” but at the heart of energiewende is energy democracy.
Recently, RWE, E.ON and the other major utilities in Germany have all publicly announced that they will build no more coal or gas plants and that they are shifting their business models to delivery and advanced metering infrastructure (AMI, aka, smart-grids).
Where the U.S. is heading is a major collapse of the investor owned utilities (IOUs), very similar to what is presently happening to the newspaper industry. The key is electric drive transportation. The IOUs won’t be able to “hold back the clean energy tide” when there are enough repurposed electric vehicle batteries on the market. Couple a 2-3 kW home solar PV array with a used 23kWh (in its used condition, maybe 16kWh) capacity Nissan Leaf battery for storage stuffed under a bench in the back of someone’s garage–and you no longer need the stupid utility.
Sadly, that will be a huge waste of resources and is the most expensive way to do renewables.
Community ownership would be so much more efficient. There are some towns in Germany that are ***way*** over one thousand (1,000) percent powered by renewable energies. Here’s one that is 4,000 percent (the Germans laugh at our zero net energy buildings, rather they talk about energy plus buildings: that’s what the difference between retail and wholesale energy on the DG side can do):