Via Miller McCune, an interesting article about the economics and politics of rooftop solar:
“Some environmental advocates say the federal government is ignoring the real future of solar energy: photovoltaic cells on almost every roof. But even supporters acknowledge rooftop solar isn’t the complete answer to the energy question — yet
While chasing the mirage of a game-changing renewable energy source in the form of industrial-scale solar plants capable of powering hundreds of thousands of homes, the federal government has turned its back on a better, cheaper form of energy from the sun: distributed solar power generation, sometimes known as rooftop solar.
At least, that’s the way desert environmental advocates see it. A coalition of scientists and local land conservationists calling itself Solar Done Right envisions roofing homes, commercial buildings and parking lots throughout the Southwest with a vast network of photovoltaic panels, each connected to the rest through the power grid.
Should large-scale solar power facilities be needed, they say, they ought to be built close to the cities where the electricity is consumed, either on degraded farmland or abandoned industrial sites known as brownfields. This approach, they say, will spare fragile desert landscapes while rapidly scaling up the nation’s solar capacity and usurping the role traditionally played by utility companies in allocating resources and setting electrical rates.
“Distributed solar isn’t on their radar, because it isn’t under their control,” says Bill Powers, a San Diego electrical engineer and Solar Done Right member who has also testified as an expert for the Natural Resources Defense Council in their efforts to block new coal-fired electricity plants. “The big-and-remote paradigm has always been the utilities’ paradigm.”
Powers argues that the huge, complex projects breaking ground in the California desert are technologically obsolete. “We should be pouring money into green technology and green jobs,” Powers says, “but we shouldn’t be preferentially supporting a technology that crested in 1990.”
Powers and other Solar Done Right members point to the example of Germany, which, in recent years, has outstripped the U.S., rapidly adding solar resources to its energy portfolio through rooftop solar installations.
Germany built its solar program with a pricing mechanism called feed-in tariffs, in which money collected from ratepayers is used to buy surplus power from owners of rooftop photovoltaic arrays at a guaranteed price per kilowatt-hour. The cash incentive is enough to offset the substantial up-front costs of setting up a photovoltaic system, says Sheila Bowers, a Santa Monica, Calif., attorney and member of Solar Done Right. Germans have been installing 30 times the U.S. total of solar capacity per year, creating 40,000 new jobs in the process — even though Germany lies well north of much of the U.S.
“They have created a new economy,” Bowers says. If anything, the German feed-in tariff program has worked almost too well: The government announced in January it would cut the solar subsidy by up to 15 percent starting this summer to ease the expected $17.5 billion annual cost of paying people all too eager to install solar arrays on their homes.
Here in the U.S., meanwhile, the Energy Department’s support for next-generation photovoltaic research amounted to $21.7 million in grants that were doled out in 2007 to two dozen colleges and universities, a figure that pales by comparison with the billions of dollars in grants and loan guarantees the government is handing out for new industrial-scale projects.
The city of Los Angeles, 150 miles to the west of the desert basins where big solar projects are planned, has focused its sights on rooftop solar. Mayor Antonio Villaraigosa has set an ambitious goal of getting 40 percent of its electricity from renewable sources by 2020 (a figure that many of his aides, by the way, think is unreachable).
At the behest of the Los Angeles Business Council, J.R. DeShazo, director of UCLA’s Luskin Center for Innovation, has studied whether feed-in tariffs will work as advertised. DeShazo and his collaborators first wanted to establish that L.A. has the raw solar resources it needs. They calculated that rooftops and parking lots throughout the sprawling Los Angeles basin could potentially generate 19 gigawatts of electricity with photovoltaic technology. The city alone has about 5.5 gigawatts of solar capacity, he says.
DeShazo modeled the phase-in of 600 megawatts of rooftop-generated electricity over 10 years. Despite substantial installation costs, “given falling solar costs and rising avoided costs for utilities, it looks as if right around year 12 to 13, large-scale in-basin solar — rooftops and parking lots — will become cheaper than the natural gas alternative that you have to supply peak power,” he says. “If that’s true, then the feed-in tariff would be cost effective for ratepayers over its lifetime.”
I ask DeShazo about the relative advantages and disadvantages of the two solar generation schemes. “The two major advantages to large-scale utility solar are it’s cheaper by somewhere between 3 and 6 cents a kilowatt-hour compared to large-scale urban rooftop settings,” De Shazo says. Also, he says, wind and solar energy will always be limited by variable weather conditions, making power-supply management difficult. It’s easier to manage fluctuating supplies with industrial solar than with thousands of distributed units in a city, he says.
But a disadvantage of big solar is that it happens in the desert, far from the labor market, so the “green jobs” benefits are vastly diminished, DeShazo says. “The second disadvantage is you have to transmit that power, so you run into exactly the same kind of transmission issues and environmental issues as with gas or coal,” he says.
Finally, distributed solar has an edge in the speed with which it will respond to financial incentives, he says. The private sector will begin to install solar panels in response to a feed-in tariff much more quickly than developers of large solar projects can negotiate power-purchase agreements with utilities and win regulatory approval from the government.
For now, electric utilities rely on coal-fired plants both because coal is cheap and the plants can be ramped up reliably to meet increasing demand. Researchers are hard at work devising new ways to store the electricity generated by intermittent sources like wind and solar. “When we get to good storage, the whole game is going to change radically,” DeShazo says. “That’s going to be a hard day for the utilities.”
But even if new electrical storage capacity is added and the electrical grid is improved so excess electricity from thousands of rooftop solar arrays can be sent to distant locales in need of power, DeShazo says, he doesn’t expect solar — industrial-scale or rooftop — to grow quickly enough to play a dominant role in L.A.’s power mix in his lifetime. “When I look out over the foreseeable future — 10 or 20 years — we’ll be lucky if we get solar to 10 to 15 percent of our load here in L.A.,” he says.
Cai Steger, an energy policy analyst for the NRDC’s Center for Market Innovation in New York, agrees, saying his team has run a national model for the growth of distributed solar generation for a 20-year period that makes generous assumptions about how quickly it could be implemented. “What that got you to was somewhere around 80 gigawatts of photovoltaic capacity by 2030,” Steger says. “That’s basically about 4 percent of total electrical generation.”
In addition, Steger says, many aging coal-fired plants will be coming offline in the next 10 to 15 years, and something will have to replace them. The numbers just don’t support the belief that distributed solar power could fill that huge void, Steger says, and given the pressing need to respond to climate change, eschewing industrial-scale solar power projects is “just not a risk we can take.”
Still, there is a future for photovoltaics. Arno Harris, founder and CEO of San Francisco-based Recurrent Energy, says his company has carved out a niche building small-to-midsize photovoltaic projects that sidestep many of the regulatory hurdles that confront the huge industrial power stations. Recurrent’s projects have included a 5 megawatt photovoltaic array mounted atop San Francisco’s Sunset Reservoir, Harris says. Meanwhile, the company has contracts to develop 400 megawatts of new capacity.
In his 10 years in the business, Harris has seen the average efficiency of photovoltaic cells improve from about 12 percent to 15 or 16 percent. The current generation of PV technologies might reach up to 20 percent efficiency, he says.
It costs between $4 and $6 per watt to install a home photovoltaic system, but the midsize projects Recurrent is building represent a threshold where costs are falling below $3 per watt. If PV efficiency continues to improve and that installation cost drops below $2 per watt, Harris says, photovoltaics will become competitive with fossil fuel. When that happens, he says, solar will quickly be embraced by the world’s largest electricity market.
“Those kind of economics in a big market can have a big effect and drive a lot of capacity,” Harris says. “I think the U.S. is at a pretty big turning point.”
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