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President Obama speaks on the topic of clean energy in front of the Copper Mountain Solar Project in Boulder City, Nevada, in March 2012. [Source: CleanTechnica (.org)]An analysis by Reuters claims that the $90 billion investment made by the federal government to generate jobs in the field of clean energy (see February 2009) has not produced as many jobs as initially touted. In March 2012, President Obama spoke in front of the Copper Mountain Solar Project in Boulder City, Nevada, which uses 1 million solar panels to power 17,000 homes. The facility only employs 10 people. The green initiative has put people to work retrofitting over a million homes to lower heating and cooling costs, and energy generation from solar and wind sources has nearly doubled since 2008. But some say the program has not created enough jobs. Critics say the program was expected to lower the unemployment rate, currently hovering above 8 percent, and say it has not done so. Supporters say the administration promised too much in the short term and fear a backlash that might undermine support for clean-energy policies across the board. Clean energy specialist Mark Muro of the Brookings Institution says, “All of this stuff is extraordinarily worthy for driving long-term economic transformation but extremely inappropriate to sell as a short-term job program.” Janet Bluman, head of the Foundation for an Independent Tomorrow, says, “From my perspective it makes more sense for us to arm our clients with the basic skills, rather than saying, ‘By golly, you will do something in the green economy or you won’t work.’” Bluman claims that her organization, which trains people for jobs in the Las Vegas area, has seen positions in trucking and accounting go unfilled because training money had been earmarked for green efforts. The federal program earmarked some $500 million for job training, and has employed some 20,000 people, far short of its stated goal. Republicans say the clean-energy program is merely a way for the Obama administration to give money to Obama’s friends (see October 15, 2012). GOP presidential candidate Mitt Romney has claimed, “[Obama] handed out tens of billions of dollars to green energy companies, including his friends and campaign contributors at companies like Solyndra that are now bankrupt.” Romney and other Republicans have not advanced proof of their allegations. Supporters say that in the long term, clean energy will “create a bounty of stable, middle-class jobs and fill the gap left by manufacturing work that has moved overseas,” as Reuters reports. White House officials say that there is more to the clean energy program than creating jobs. “We have a record of success that has created tens of thousands of jobs and is ensuring that America is not ceding these industries to countries like China,” White House spokesman Clark Stevens says. “Thanks to the investments we’ve made, these industries will continue to grow, along with the jobs they create.” Senator Charles Grassley (R-IA), an opponent of the program, says: “The green jobs-training program just didn’t work. It was a poor investment of tax dollars.” Darren Devine of the College of Southern Nevada says: “Will it add a significant number of jobs, enough to make a real dent in our unemployment? No, I don’t see that happening.” What it will do is help the country reduce its energy consumption, lower the amount of carbon dioxide being pumped into the atmosphere, and help create jobs in the clean-energy and other fields, such as health care, education, and technology. [Reuters, 4/13/2012]
A small New Jersey utility leads the nation in providing solar-powered electricity to its customers. The Vineland Municipal Utilities Authority provides solar-generated power to its 25,000 customers, leading the nation on a watts-per-customer basis, according to an analysis by the Solar Energy Power Association. Three of the state’s four electric utilities are among the top 10 nationwide in the amount of electricity generated from solar units installed or the number of watts produced from solar during 2011. The utilities in New Jersey, far from battling solar energy, are embracing it, though some fear this push will be undercut by a proposed cut in the prices solar owners earn for the power their units produce. The New Jersey Board of Public Utilities is considering whether to expand the utilities’ solar promotion efforts, a move supported by the solar industry. Proponents say the move would help stabilize the solar energy market in the state, which is trying to handle a drop in the amount of money solar systems earn for their owners. The Vineland utility, located in Cumberland County, used to operate one of the dirtiest coal plants in the state to provide its customers with electricity. The analysis shows that utilities are increasing their involvement in building solar plants, contrasting the status of a few years ago, when the market was dominated by customer-owned, net-metered systems that do not supply electricity directly to the grid. [NJ Spotlight, 4/18/2012]
The conservative Investors Business Daily (IBD) publishes an op-ed criticizing the White House’s willingness to grant permits for solar energy producers to use public lands to build their solar plants. The editorial says, “Interior Department Secretary Ken Salazar, who has apparently forgotten about the Obama administration’s many solar power scandals, announced the initiative in what he called a ‘proud moment,’” apparently a swipe at the administration over the Solyndra bankruptcy, and then makes the broad claim: “There were no solar projects on federal land when Barack Obama was elected four years ago. And for good reason: Solar is an inferior source of energy.” Fossil fuels are cheaper, more efficient, sun-dependent, and even cleaner, the editorial claims, writing: “Solar power needs a large—and ugly—footprint that creates its own environmental issues. Solar cells contain toxic materials and therefore create toxic waste.” The editorial concludes by lambasting the Obama administration for not opening public lands for oil and gas development. [Investors Business Daily, 8/1/2012] In 2003, the US Department of Energy concluded that most of the land needed for renewable energy sites could be supplied by abandoned industrial sites. Moreover, “with today’s commercial systems, the solar energy resource in a 100-by-100-mile area of Nevada could supply the United States with all of its electricity. If these systems were distributed to the 50 states, the land required from each state would be an area of about 17 by 17 miles. This area is available now from parking lots, rooftops, and vacant land. In fact, 90 percent of America’s current electricity needs could be supplied with solar electric systems built on the estimated 5 million acres of abandoned industrial sites in our nation’s cities.” The federal government is expanding its efforts to find “disturbed and abandoned lands that are suitable for renewable energy development.… Groups concerned with minimizing the impacts of energy development on wildlife prefer prioritizing these areas for development.” The Energy Information Administration says: “Covering 4 percent of the world’s desert area with photovoltaics could supply the equivalent of all of the world’s electricity. The Gobi Desert alone could supply almost all of the world’s total electricity demand.” And a 2009 study found that “in most cases” solar arrays in areas with plenty of sunlight use “less land than the coal-fuel cycle coupled with surface mining.” [National Renewable Energy Laboratory, 1/2003 ; US Energy Information Administration, 12/19/2011; Defenders of Wildlife, 1/14/2013 ; Media Matters, 1/24/2013]
In an editorial claiming that the Obama administration is engaged in giving preferential land-use permits to solar energy producers over fossil fuel corporations, the Wall Street Journal claims, “The dirty secret of solar and wind power is that they are extremely land intensive, especially compared to coal mining, oil and gas drilling, or building a nuclear power plant.” [Wall Street Journal, 8/13/2012] In 2003, the US Department of Energy concluded that most of the land needed for renewable energy sites could be supplied by abandoned industrial sites. Moreover, “with today’s commercial systems, the solar energy resource in a 100-by-100-mile area of Nevada could supply the United States with all of its electricity. If these systems were distributed to the 50 states, the land required from each state would be an area of about 17 by 17 miles. This area is available now from parking lots, rooftops, and vacant land. In fact, 90 percent of America’s current electricity needs could be supplied with solar electric systems built on the estimated 5 million acres of abandoned industrial sites in our nation’s cities.” The federal government is expanding its efforts to find “disturbed and abandoned lands that are suitable for renewable energy development.… Groups concerned with minimizing the impacts of energy development on wildlife prefer prioritizing these areas for development.” The Energy Information Administration says: “Covering 4 percent of the world’s desert area with photovoltaics could supply the equivalent of all of the world’s electricity. The Gobi Desert alone could supply almost all of the world’s total electricity demand.” And a 2009 study found that “in most cases” solar arrays in areas with plenty of sunlight use “less land than the coal-fuel cycle coupled with surface mining.” [National Renewable Energy Laboratory, 1/2003 ; US Energy Information Administration, 12/19/2011; Defenders of Wildlife, 1/14/2013 ; Media Matters, 1/24/2013]
A brief article in the Wall Street Journal claims that solar energy does not reduce greenhouse gas emissions in the aggregate, because the carbon savings from desert-based solar projects will be offset by “disturbing caliche deposits that release carbon dioxide.” The Journal cites a formal complaint filed by three Western environmental organizations claiming that desert-based solar projects not only endanger desert ecosystems, but “soil disturbance from large-scale solar development may disrupt Pleistocene-era caliche deposits that release carbon to the atmosphere when exposed to the elements, thus negat[ing] the solar development C [carbon] gains.” The Journal acknowledges that some aspects of the complaint may be exaggerated. The Journal does not mention that the report cited in the complaint, a 2011 study released by the University of California-Riverside, says that the 560,000 metric tons of carbon saved per year by a single solar plant would more than offset the estimated 6,000 metric tons of carbon released by disturbing caliche deposits. [Wall Street Journal, 9/4/2012; Media Matters, 1/24/2013]
Analyses by the New York Times and FactCheck.org show that presidential candidate Mitt Romney made some fundamental misstatements when he criticized the Obama administration’s green energy program (see February 2009). During the October 3 presidential debate, Romney claimed Obama had given $90 billion of federal money to clean energy programs, saying at one point: “Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives. Ninety billion—that—that would have—that would have hired two million teachers.” The Times reports that while the $90 billion is an accurate number drawn from the 2009 economic stimulus package, not all of it was spent on green energy, and much of the money that was spent on green energy programs was authorized during the Bush administration. Of the $90 billion authorized by the Obama administration, $29 billion went to energy efficiency programs; much of that was spent on retrofitting homes and apartments of low-income households to be more energy efficient and lower their energy costs. $18 billion was spent on fast, energy-efficient trains and $21 billion was spent on wind farms, solar panels, and other renewable energy. Much of these expenditures was matched by private investments. Romney claimed, “I think about half of them, of the ones have been invested in, they’ve gone out of business,” and cited the example of Solyndra, a maker of solar equipment that went bankrupt, costing the government some $528 million. The Times notes that Solyndra began receiving money during the Bush administration, and that the government has been able to recover some of its funds from other firms that went bankrupt. The Times writes, “The defaults were far less than Congress had allocated to cover losses, and far, far less than half of the ventures, although some others may yet fail.” FactCheck, a project of the Annenberg Public Policy Center, goes further, noting, “In summary, Romney said a lot about the $90 billion in stimulus spending on clean energy—and very little of it was accurate.” FactCheck accuses Romney of making “numerous bogus claims” about the $90 billion energy funding. Only six percent of the firms loaned money by the government for clean energy technology have gone bankrupt, it notes, not “about half,” as Romney claimed. Romney also wrongly stated that the entire $90 billion was spent on “solar and wind” projects; in reality, less than a third was spent on those programs. His claim that the $90 billion was equivalent to “about 50 years’ worth of what oil and gas receives” in tax breaks was doubly wrong; by his own figures, it would have been 32 years’ worth, but real data shows it is closer to about 10 years’ worth of oil and gas subsidies. The claim that Obama could “have hired two million teachers” was wrong, since much of that $90 billion was in the form of loans, and, FactCheck notes, “the government can’t hire teachers with loans.” Even data provided by the Romney campaign to back up its claims disproves Romney’s assertions. [New York Times, 10/4/2012; FactCheck (.org), 10/4/2012]
Conservative columnist Charles Lane, writing for the Washington Post, pens a column deriding the renewable energy industry and says that powerful Democratic politicians are using that industry to make themselves rich. He cites the example of former Vice President Al Gore, who has made somewhere around $100 million “partly through investing in alternative energy firms subsidized by the Obama administration.” Lane juxtaposes this information with a note that Republican presidential candidate Mitt Romney earned the cheers of “thousands” when, at a rally in Ohio, he proclaimed his support for the coal industry. Lane writes that liberals and Democrats are profiting handsomely by forcing the government to subsidize what he characterizes as an industry doomed to failure: “As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy—or liberalism as a philosophy of distributive justice.” Lane claims that Gore has an inherent conflict of interest in speaking out about alternative energy and climate change while at the same time investing in alternative energy research and development. He then lambasts the entire renewable energy industry as “not cost-competitive with traditional energy,” and claims that it “won’t be for years. So it can’t work without either taxpayer subsidies, much of which accrue to ‘entrepreneurs’ such as Gore, or higher prices for fossil energy—the brunt of which is borne by people of modest means.” Lane writes that “expensive electricity is bad for industry, as Germany is discovering. Fact is, subsidies for green energy do not so much create jobs as shift them around.” So-called “smart grids,” advanced technology that makes conventional electricity’s transmission more efficient and reliable, is bad, he writes, because it puts “human meter readers” out of work, “just as solar panels put coal miners out of work.” If any new energy technology is worth pursuing, he writes, it is “fracking,” the industry practice that promises to extract millions of tons of natural gas from the ground. Solar and other renewable energy industries would not exist if it were not for government subsidies, he claims, and will never be sustainable without government payouts. [Washington Post, 10/15/2012] Lane’s claim about Germany’s failure to create jobs in its renewable energy industry is contradicted by a German study showing that the industry creates hundreds of thousands of jobs each year (see July 31, 2013). Similarly, his claim that wealthy solar energy producers are sustained by higher rates paid by poor consumers will be strongly challenged (see April 5, 2013).
A report by the Edison Electric Institute (EEI) finds that within a decade or so, solar energy and other renewable distributed energy resources (DER) could lay waste to the utility business model and to American power utilities. The utility business model, which has remained relatively unchanged since the early 20th century, is not capable of coping with the “disruptive challenges” posed to it by solar and other renewable energy power generation. David Roberts, a staff writer for the environmental news publication Grist, will write of the EEI report in April 2013: “It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.” Standard power utilities are “regulated monopolies,” which means they are the sole providers of power in their service areas. The business model relies on the utilities selling power as “overseen” by public utility commissions (PUCs), which control what utilities can charge for their power. Inexpensive solar (photovoltaic, or PV) power “eats away at [that business model] like acid,” Roberts writes. Solar power is not regulated for the benefit of the utility companies. In simplistic terms, a kilowatt-hour (kwh) of solar energy generated by, say, a rooftop solar array is a kilowatt-hour of reduced demand for the utility. Solar power peaks each day at noon, usually the time of most intense sunlight, which is one of the power utilities’ “peak load” times. Power utilities make much of their profits from peak load electricity, as they charge more per kwh for peak load electricity. Roberts writes, “[W]hen solar panels provide peak power, they aren’t just reducing demand, they’re reducing demand for the utilities’ most valuable product.” The EEI report also challenges the myth that power consumers must rely on grid power and not solar power because solar power is not available when the sun is not shining. Battery storage, micro turbine, and other developing technologies are making it possible for many consumers to go entirely “grid free,” to opt out of grid-generated electricity entirely. Duke Energy CEO Jim Rogers says, “If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.” If a large number of consumers begin generating their own power and using the grid for backup alone, the EEI report says, the utilities face “irreparable damage to [their] revenues and growth prospects.” Utilities generally anticipate revenues that allow them to invest heavily in fossil fuel plants that will not recoup costs for 30 years. Those investments could be more difficult to recoup if consumers begin generating their own power via solar and other DER power sources, leading the utility companies to contemplate raising the rates of those consumers who do not opt out of grid-based power. The EEI report states: “The financial implications of these threats are fairly evident. Start with the increased cost of supporting a network capable of managing and integrating distributed generation sources. Next, under most rate structures, add the decline in revenues attributed to revenues lost from sales foregone. These forces lead to increased revenues required from remaining customers… and sought through rate increases. The result of higher electricity prices and competitive threats will encourage a higher rate of DER additions, or will promote greater use of efficiency or demand-side solutions. Increased uncertainty and risk will not be welcomed by investors, who will seek a higher return on investment and force defensive-minded investors to reduce exposure to the sector. These competitive and financial risks would likely erode credit quality. The decline in credit quality will lead to a higher cost of capital, putting further pressure on customer rates. Ultimately, capital availability will be reduced, and this will affect future investment plans. The cycle of decline has been previously witnessed in technology-disrupted sectors (such as telecommunications) and other deregulated industries (airlines).” In other words, as consumers begin to opt out of grid-based power consumption, and utilities raise their rates to compensate for the loss of revenue, more and more consumers will opt out, further shrinking the number of consumers paying the utilities to generate their electricity. Even small numbers of consumers using rooftop solar strikes at the utilities’ main profit centers (one reason why German utilities are already feeling the pinch). Currently, less than 1 percent of US electricity is generated by solar arrays. But a projection by Bloomberg Energy Finance forecasts that in some areas of the nation, up to 10 percent of power load will be generated by solar arrays. The EEI report speculates that utility consumers in those areas will see massive increases in their rates as the utilities compensate for the lost revenues. [Kind, 1/2013 ; Grist Magazine, 4/10/2013]
On Fox News’s morning show Fox and Friends, “expert” commentator Shibani Joshi of Fox Business tells viewers that the reason Germany has had so much success with its solar power industry is that it gets a great deal more sunlight than America does. In reality, Germany gets comparatively little sunlight, comparative to Alaska, the US state that gets the least amount of annual direct solar energy. Neither Joshi nor any of the hosts on the show mention Germany’s long governmental support of solar energy development and its backing of green technology research and development. Host Gretchen Carlson and her fellow hosts deride the Obama administration’s “failed” solar subsidies, with Carlson saying: “The United States simply hasn’t figured out how to do solar cheaply and effectively. You look at the country of Germany, it’s working out great for them.” The future of America’s solar industry, Carlson asserts, “is dim.” She then asks Joshi: “What was Germany doing correct? Are they just a smaller country, and that made it more feasible?” Joshi replies: “They’re a smaller country and they’ve got lots of sun. Right? They’ve got a lot more sun than we do.… The problem is it’s a cloudy day and it’s raining, you’re not gonna have it.” A few American states like California get a relatively plentiful amount of sunshine, Joshi says, and experience some success with generating energy from sunlight, “but here on the East Coast, it’s just not going to work.” Slate reporter Will Oremus will later write: “Gosh, why hasn’t anyone thought of that before? Wouldn’t you think that some scientist, somewhere, would have noticed that the East Coast is far less sunny than Central Europe and therefore incapable of producing solar power on the same scale? You would—if it were true.” According to the US Department of Energy’s National Renewable Energy Laboratory (NREL—see 1977), almost the entire continental US gets more sunlight than the sunniest region of Germany. NREL scientist Sarah Kurtz tells Oremus, “Germany’s solar resource is akin to Alaska’s.” According to an NREL map, the American Southwest is one of the best places in the world to generate solar power, and all of the continental US with the possible exception of the Puget Sound region in Washington state gets far more sunlight than anywhere in Germany. [Slate, 2/7/2013; Media Matters, 2/7/2013] Four days later, Joshi will admit she is wrong. In a post on Fox News’s blog, she will write: “I incorrectly stated that the chief difference between the US and Germany’s success with solar installations had to do with climate differences on a Fox and Friends appearance on Feb. 7. In fact, the difference come down more to subsidies and political priorities and has nothing to with sunshine.” She will then continue to deride solar energy as a minor element in a “divers[ified] energy portfolio,” and will claim that natural gas obtained via “fracking” is a better and more reliable source of energy for the next century. [Fox News, 2/11/2013]
Solar expert David Roberts, a columnist for the online magazine Grist, writes that like most modern industrial systems, the traditional electricity generating utility is extraordinarily “over-engineered,” which he defines as “built to be prepared for maximum demand even though maximum demand is, by definition, rare.” Over-engineering is not necessarily a bad thing; for example, an SUV can be considered “over-engineered” until it becomes involved in a collision, when its capability of protecting its passengers comes into play. The electricity system is also over-engineered, Roberts says, mostly because there is no simple way to store electricity. Demand for electricity must be met by generated electricity; it cannot be stored. “That imposes a certain logic on the system,” he writes. “There must always be enough power generation capacity available to handle the maximum possible demand (what’s called ‘peak load’). The result is that most of our power plants, like most of our cars, spend most of their time parked, idled. They are there for those few minutes of the day when everyone gets home from work and turns on the TV.” Because of the “real-time” nature of the electrical grid, it is susceptible to blackouts. On occasion, less responsive grids are prone to cascade failures, leading to hundreds of thousands of customers being without power. In contrast, Roberts writes, the data grid operating the Internet is “fault-tolerant,” with built-in responsive features to handle blockages, slowdowns, and errors. The Internet uses buffering to increase the durability of the system and reduce the need for overcapacity, and has the capability to isolate and route around faults and failures. Electricity systems generally have neither. These capacities can be built into modern electrical grids, and the costs of such upgrades is declining. But most utility companies do not install such upgrades. Why not? Because, he writes, “the oversight system governing the utilities does not provide incentive for upgrades. These costs must be shared directly with the ratepayer and public service commissions have been reluctant to approve such measures.” Public utility commissions (PUCs) are obliged by law to have utilities provide power at the lowest cost to the consumer, and as a result there is no incentive for utilities to spend more money than necessary upgrading and improving their systems. “There is no way build a new power system while also providing lowest-cost electricity from moment to moment,” he writes. “It’s impossible. The legal and regulatory system is practically built to prevent long-term systemic change.” As the energy production and transmission systems of the United States transform themselves into a 21st-century model, systems will need to be redesigned. Roberts concludes: “We could be doing that with our electrical system. We would be doing it already if we had open, competitive markets for electricity services. Instead we have quasi-public quasi-monopolies practically mandated by law to stick with what they know and nibble around the edges. Until that legal and regulatory system changes, we’ll be stuck with the dumb, over-engineered, wasteful system we have today.” [Grist Magazine, 2/7/2013]
San Antonio electric utility CPS Energy says it intends to cut the amount it pays for solar power generated from residential customers by about half, claiming that some of the city’s power users are not paying their fair share for the utility’s transmission infrastructure. Clean energy activists and system installers say the cuts are intended to cripple the region’s solar industry. Lanny Sinkin of Solar San Antonio says: “There was zero consultation with the solar industry in the development of this proposal. They’re going to kill the solar industry.” CPS, a municipally owned utility that in theory is owned by the ratepayers, wants to end the current system of “net metering,” which allows residential customers with solar panels to use each kilowatt-hour of energy they generate to cancel each kilowatt-hour they draw from the utility’s electric grid—in essence, the residence owners cancel a kilowatt-hour they pay for to CPS (at retail rates) by generating a kilowatt-hour of solar energy. Instead, CPS proposes a system it calls “SunCredit,” which would assign a fixed value to the price of the solar power produced and credit that amount against their accounts. The SunCredit program would give only a little over half of what a kilowatt-hour of solar power is worth under net metering, by crediting residential consumers with solar-produced kilowatt-hours at CPS’s wholesale rate. CPS spokesperson Lisa Lewis says of the existing practice: “I think that it’s not unimportant to recognize that solar customers use poles and wires and the grid. If we move to a situation where more and more customers have solar systems, they leave that infrastructure cost… stranded, and the people who can least afford to pay it are the ones paying for it” (see January 2013). Existing solar power producers would be granted the existing rates until 2023, while new solar producers would begin receiving the new, lower rate immediately.
Decision Already Made? - Although Lewis says the utility is still soliciting feedback on the program and will consider making changes, Sinkin says the utility has already made its decision. Recently, the utility informed the public of its decision during a contentious meeting, when solar installers said the new program would make it impossible for them to sell systems to the public. CPS Energy instituted cuts in its solar subsidies in 2012 when it reduced the size of the rebate it offers to help customers cover the cost of installing their solar power systems at their homes.
Expert Explains Issue - Solar expert David Roberts of Grist explains the issue, writing: “Under net metering, if a rooftop solar customer generates as much electricity as she consumes, she pays nothing. If she generates more than she consumes, the utility pays her. In either case, her portion of the utility’s fixed costs is transferred onto other, non-solar ratepayers. As more and more people opt for solar, fixed costs are paid by a smaller and smaller group of customers, which drives rates up, which drives more and more of them to solar, in a vicious cycle. The utility’s fixed assets are ‘stranded’—it is unable to recover those investment costs because of the shrinking pool of customers. (It’s also worth noting that the first customers to go solar tend to be well-off, which leaves the less well-off paying more, so there’s an economic-justice angle here too.)” Roberts notes that CPS is being ingenuous in its contentions that solar consumers are costing the utility money, as rooftop solar arrays save the utility money in terms of avoided transmission and equipment costs. Moreover, solar power benefits the region in reduced air pollution and carbon emissions. He also notes that CPS did not hesitate to offer its employees $16.4 million in bonuses in 2012 (most of which went to the firm’s top executives), the same year it cut its solar subsidies. Roberts concludes: “The dilemma… is how to align CPS’s incentives so that it can drive rapid solar adoption and reliably recover costs from its fixed assets and protect its lower-income ratepayers from being unfairly burdened. If we can’t figure out a solution to that dilemma, more and more utilities will do what CPS is doing and the spread of rooftop solar in the US, which has barely gotten underway, will slow to a crawl. That isn’t what we want, is it?” [San Antonio Express-News, 6/21/2012; San Antonio Express-News, 4/9/2013; Grist Magazine, 4/12/2013]
Idea that Solar Power Consumers Pay Unfairly Low Share Challenged - Many solar advocates have successfully challenged the idea that solar power consumers cost their area’s utilities revenue (see April 5, 2013).
Utility Agrees to Postpone Implementation - Following the announcement, CPS will agree to postpone implementation of the new policy for a year and to work with solar advocates to craft changes to the policy. [CPS Energy, 5/9/2013; Grist Magazine, 5/15/2013]
In a press release, Kyocera Solar announces the opening of the Arlington Valley Solar Energy II (AV Solar II) installation in Maricopa County, Arizona, near the Hassayampa Substation. Kyocera, one of the world’s largest producers of solar photovoltaic (PV—see 1954) modules and systems, operates the facility in conjunction with LS Power and the state of Arizona; Governor Jan Brewer (R-AZ) is on hand to officially open the facility. Block 1 is online; Blocks 2 through 5 are expected to be complete by the end of the year. Kyocera Solar vice president Steve Hill says: “Today’s opening of the AV Solar II mega-installation marks a major milestone in Kyocera’s four decades of manufacturing high-quality, long-lasting solar modules. We’re proud to provide US-made products to this utility-scale installation, which adds to the mega-installations around the world showcasing Kyocera’s unrivaled solar solutions including a 204MW project in Thailand and a 70MW installation in Kagoshima, Japan.” When complete, the facility will be one of the largest solar PV installations in North America and will provide 127 megawatts of power for the surrounding community. Brewer tells the press: “Thanks to our strategic location, pro-business climate, skilled workforce, and strong incentives for solar development, Arizona is a national leader in the solar industry. As an Arizona-based company, Kyocera Solar understands how critical this industry is to a secure economic and renewable energy future.” [Business Wire, 5/1/2013]
Several of the nation’s largest solar installers, including SolarCity, Sungevity, SunRun, and Verengo, form a lobbying organization, the Alliance for Solar Choice (ASC), to fight back against conventional utilities’ efforts to curtail or cancel programs that support renewable energy in 43 states. The ASC will begin by working to preserve “net metering” policies that require utilities to purchase surplus electricity at retail rates from customers with rooftop solar systems. ASC president Bryan Miller, a SunRun executive, says the group is responding to “the coordinated utility attack on net metering throughout the country.” Many utilities “have opposed net energy metering since its inception.” Utilities argue that as more people install solar arrays and generate power for themselves, non-solar customers are forced to pay higher rates to subsidize utility costs for grid maintenance and the like. (That argument has been strongly challenged—see April 5, 2013.) [Bloomberg, 5/10/2013]
Grist columnist and distributed energy expert David Roberts attempts to explain the viewpoints of the solar and the conventional utility industries over utility regulations as they pertain to solar power generation. He calls the issue “unavoidably wonky” but “a pivotal issue” that is “long overdue” for public understanding. The problem between the two has two components: short-term and long-term. The short-term argument between the two camps involves how electricity rates are structured and how utilities compensate, or do not compensate, customers who generate some of their own power with rooftop solar PV panels. The long-term issue revolves around the creation of “an entirely new business model for utilities, one that aligns their financial interests with the spread of distributed energy.” Battling over the short-term issues delays resolution of the long-term issue, Roberts writes.
Utilities' Perspective - About 70 percent of Americans are served by investor-owned utilities (IOUs), the traditional, for-profit, regulated-monopoly utilities that have what Roberts calls “a captive customer base and profits guaranteed by law.” IOUs are leading the pushback against distributed solar energy. IOUs make their profits by:
estimating how much power their customers will need;
estimating the investments they will need to make in power plants, fuel, transmission lines, and so forth in order to meet that demand;
estimating how much they need to charge customers to cover their investments and offer a reasonable rate of return to their investors;
convincing their state’s public utility commission (PUC) that their rates are warranted and fair; and
charging that rate until they can convince the PUC to let them raise their rates.
Residential customers pay the PUC-approved “retail rate” for their electricity. [Grist Magazine, 5/15/2013]
Net Metering - NC State’s Database for State Incentives for Renewables and Efficiency (DSIRE) defines net metering as “a popular and administratively simple policy option [that] allows electric customers who generate their own electricity using solar or other forms of renewable energy to bank excess electricity on the grid, usually in the form of kilowatt-hour (kWh) credits.… In effect, the customer uses excess generation credits to offset electricity that the customer otherwise would have to purchase at the utility’s retail rate. Traditionally, net metering has been accomplished through the use of a single, conventional, bi-directional meter.” In its most simple terms, customers who participate in net metering programs get rebates or subsidies from their IOUs based on how much solar energy they generate for themselves: if they generate 10 hours of solar power a week, they receive 10 kilowatt-hours (at the retail rate) of credit on their electric bills. The policies are in force in some 40 states, though the details of their implementation vary widely from state to state. The utilities say that net metering is inherently unfair, since a consumer who lowers or even zeroes out their utility bill through solar power generation does not pay enough for fixed costs such as power plant construction, transmission line installation and maintenance, etc., even though these consumers still make use of these services. The utilities argue that the complexity of managing these distributed energy producing consumers increases their costs; net metering, they say, makes customers who cannot afford solar arrays subsidize those who can. (This argument has been strongly challenged—see April 5, 2013.) Utilities in many states are trying to end or dramatically cut back on net metering rebates (see April 9-12, 2013). As noted in a January 2013 report that predicted utilities will be forced into near-bankruptcy by increasing use of solar-generated power (see January 2013), many IOUs are attempting to add “customer service charges” to subsidize their fixed costs, and to lower the subsidies paid to rooftop solar producers. David Rubin of Pacific Gas and Electric has said, “We need to set the stage for continued growth in solar in what we believe will be a sustainable way which is to not have solar customers that are being subsidized by the rest of our customers and producing unsustainable rates for those customers.” [DSIRE Solar, 2013; Grist Magazine, 5/15/2013]
Solar Perspective - The solar community is not convinced, Roberts writes, and is actively, and sometimes angrily, pushing back against the utilities’ stance. Recently, some of the nation’s largest solar installers formed an organization called the Alliance for Solar Choice (see Shortly Before May 10, 2013). Their argument boils down to the contention that utilities raise their rates regardless of who produces solar or wind power for themselves. In fact, they charge, utilities raise their rates far more than is warranted to cover what they argue are higher costs due to solar generation. Because of their monopolistic structure, they are able to make extraordinarily high profits even while bemoaning their costs. PUCs guarantee them hefty profit margins (rates of return on their investments) regardless of whether the investments were necessary. They essentially have a captive customer base, Roberts writes, and are used to charging heavily padded retail rates on the power they sell their customers. Utilities have no interest in innovation or competition, he writes, and as a result their customers “are getting shafted all over the country. Utilities overestimate demand, underestimate efficiency, and contract for gigantic central-generation power plants that customers pay for whether or not they need the power.” Roberts cites the examples of Southern California Edison customers, who are paying $68 million a month to subsidize a nuclear plant in San Onofre that has not produced a watt of energy in over a year. Mississippi customers are paying huge amounts to subsidize a coal-fired plant in Kemper County. We Energies in Wisconsin is trying to force its customers to pay for its Oak Creek coal plant, a hugely expensive facility that has been plagued with outages and breakdowns. Roberts says that utilities are not worried about increasing customers’ rates, but do not like the loss in revenue due to solar consumption. “It’s competition they don’t like,” he writes, “the potential loss of their captive customers.” Homes that are essentially “unplugged” from the grid do not impose costs on the utility, and actually save the utility money on transmission and distribution costs and in other areas. Utilities rely on consumers to pay exorbitant rates for their poorly envisioned and constructed power plants, transmission facilities, and the like, Roberts argues, instead of absorbing the losses themselves. [Milwaukee Journal-Sentinel, 6/27/2012; Grist Magazine, 5/15/2013]
Conclusion - While the solar advocates have a stronger case, Roberts says, some of them have become a bit extreme in their view that all utilities are automatically the enemy. “Some utilities, at least, seem to be grappling with this issue in good faith,” he says. But even these utilities, he says, “are struggling with the question of how to appropriately compensate for distributed solar. The fact is, as long as utilities operate under their current business model, rooftop solar really does hurt them.” Roberts says the best solution is to revamp the business model, particularly the IOU. [Grist Magazine, 5/15/2013] The regulatory contract that most IOUs operate under—existing as corporations legally protected from competition, charging rates as approved by state governments, and receiving guaranteed returns—is almost completely the opposite of the free market concept. “It is the most Soviet of economic sectors,” Roberts writes. Moreover, utilities make most of their profits not from selling electricity, but from making investments and receiving returns on them. The more power lines and plants they build, the more money they earn. In the ideal free market, companies profit by competing, cutting costs, and innovating. None of this applies to the typical American utility. As long as they can make their local PUC happy, utilities are free to generate revenue merely by building more facilities, whether those facilities are needed or even useful. Now, though, the paradigm is not as profitable. Utilities’ profits have peaked, and in coming years they will continue to drop, in large part because of the increase in the usage of renewable energy in place of utility-generated energy. Meanwhile, utilities are locked into paying for facilities and improvements for the next 20 years or so, and want to charge customers as much as possible to help them pay off the debts they have incurred and keep their profit margins in place. Roberts says that while society as a whole needs distributed, renewable energy platforms, the utilities do not want them: “As a society, we need energy efficiency and demand response. We need distributed renewable energy. We need to cancel out future power plants and transmission lines. All those things are to the good, economically and ecologically. Yet utilities have every incentive to oppose them, as they are direct threats to their familiar, comfortable business model, which has survived nearly a century unchanged.… We need a ground-up rethink of how utilities work, how they are structured, and how they can be reformed in a way that enables and accelerates long-overdue innovation in the electricity space.” [Grist Magazine, 5/21/2013]
Arizona’s largest public utility, Arizona Public Service (APS), is proposing to charge its customers who install rooftop solar panels $50 to $100 a month, or more, to cover what it says is the cost of maintaining its power grid. The increase would primarily impact new solar consumers, and not those who already have solar arrays installed. Solar energy advocates say the utility’s move will cost thousands of jobs in the solar industry, but APS says the surcharge is justified. Gregory Bernosky, an APS official in charge of the company’s renewable energy policy, says: “Right now the model isn’t sustainable. We love customers to go solar; the energy is a great resource as part of our energy portfolio. But this is about cost shifting and fairness to non-solar customers.” Bernosky says that solar-producing customers are not paying their fair share for the conventional electricity they use, in part because under a policy known as net metering, they can sell the excess energy they generate back to APS for what Bernosky says is too much credit. “We’re not collecting all the costs we need to maintain infrastructure from solar customers, and as time goes on and we have more of them, they put a greater burden on non-solar customers,” he says. This claim has been strongly challenged (see April 5, 2013 and July 31, 2013). Tim Hanna, a Solar City employee who has a rooftop array, says he pays little more than $20 or $30 for electricity even in the summer, because he generates so much solar energy for his own use. He would not be affected by the rate increase, but says many others would, stating, “I think it will put a big damper on things because whenever you talk to people, you tell them they can save a good chunk of money, and now they might not be able to save like they used to.” Arizona’s solar industry employs over 10,000 people now, a number that is expected to rise. But many solar advocates say that APS’s new policy could halt job growth and cost current jobs. Meghan Nutting of Solar City says: “Louisiana and Idaho fought similar proposals. No other state with net metering, which is 43 states, has enacted a tax hike like this. It’s crazy that Arizona, the sunniest state in the nation, might actually consider doing this.” [AZFamily.com, 7/16/2013]
Amory B. Lovins, the chief scientist for the Rocky Mountain Institute and a well-known expert on sustainable and renewable energy, writes in a blog post for the Institute that the US solar industry is being attacked by an onslaught of disinformation and lies by the mainstream media, much of it designed to promote the interests of the conventional electric utilities. He begins by citing the infamous “flub” by Fox Business reporter Shibani Joshi, who in January 2013 lied to viewers when she said Germany has a more successful solar industry than the US because it has “got a lot more sun than we do” (see February 7, 2013). Lovins notes, “She recanted the next day while adding new errors.” He cites a pattern of what he calls “misinformed or, worse, systematically and falsely negative stories about renewable energy.” Some are simply erroneous, he admits, “due to careless reporting, sloppy fact checking, and perpetuation of old myths. But other coverage walks, or crosses, the dangerous line of a disinformation campaign—a persistent pattern of coverage meant to undermine renewables’ strong market reality. This has become common enough in mainstream media that some researchers have focused their attention on this balance of accurate and positive coverage vs. inaccurate and negative coverage.” The coverage issue has become one of note, he says. Tim Holmes of the UK’s Public Interest Research Centre (PIRC) says that media reporting has an outsized influence on the thinking of lawmakers. In Britain, Holmes says, left-leaning newspapers tend to write positively about renewable energy, while more conservative, Tory-favoring news outlets give far more negative coverage. Overall, negative coverage of renewable energy more than doubles the amount of positive coverage in the British press. In Britain, the “lopsided” coverage is largely driven by nuclear power advocates who fear competition from wind power.
Myth: Renewable Energy Industries Cause Job Losses - Lovins cites the October 2012 claim by a Washington Post opinion columnist that subsidies for green energy do not create jobs, where the columnist cited Germany as an example of his assertion (see October 15, 2012). He cites data from a German study debunking the Post claim, showing that Germany’s renewable energy sector created over 380,000 jobs in 2011 alone and was continuing to create more jobs each year. Lovins writes, “More jobs have been created than lost in Germany’s energy sector—plus any jobs gained as heavy industry moves to Germany for its competitive electricity.” He writes that “a myth persists that countries lose more jobs then they gain when they transition to renewables.” He calls this claim an “upside-down fantasy” promulgated by a faulty study released by King Juan Carlos University in Spain in 2009 and written by an economist with reported ties to ExxonMobil, the conservative Heartland Institute, and the far-right Koch brothers (see August 30, 2010). The study claimed that for every job created in Spain’s renewable energy industry, 2.2 jobs were lost in the general job market. The story is still reported as fact today. But the study was debunked by experts from the National Renewable Energy Laboratory (NREL—see 1977) and the Spanish government. A 2012 study by the International Labour Organization shows that Spain is leading Europe in “green” job creation. Similar claims have been made about the American job market, with right-wing think tanks such as the Cato Institute (also funded by the Koch brothers—see 1977-Present and February 29, 2012) asserting that if people think renewable energy industries will create jobs, “we’re in a lot of trouble.” In reality, the American renewable energy industries created over 110,000 new jobs in 2012; in 2010, the US had more jobs in the “clean economy” than in the fossil-fuel industries.
Disinformation Campaign - Lovins writes that the attacks on the renewable energy industry are too systematic and coordinated to be accidental. Only one out of every 10 articles written about renewable energy had a quote from a spokesperson with the renewable energy industry, according to a recent survey. Retired Vice Admiral Dennis McGinn, head of the American Council on Renewable Energy (ACORE), says that enemies of the renewable energy industries “are dominating the conversation through misrepresentation, exaggeration, distraction, and millions of dollars in lobbying and advertising.” Lovins concludes: “This misleading coverage fuels policy uncertainty and doubt, reducing investment security and industry development. Disinformation hurts the industry and retards its—and our nation’s—progress. As Germany has shown, investing in renewables can grow economies and create jobs while cutting greenhouse gas emissions even in a climate as ‘sunny’ as Seattle. We just have to get the facts right, and insist that our reporters and media tell us the truth, the whole truth, and nothing but the truth.” [Rocky Mountain Institute, 7/31/2013]
As the Los Angeles Department of Water and Power (LADWP) begins phasing out coal and natural gas power plants, it is turning more and more to “solar parks” in the desert to the east to generate much-needed power. However, these solar parks are raising concerns among environmentalists and local residents. The Ivanpah Solar Complex in the Mojave Desert has taken steps to minimize the impact its existence will have on the fragile desert tortoise population. The Genesis Solar Energy Project in Riverside County, California, was recently forced to halt construction when Native American burial remains were found on the construction site. Donna Charpeid, a farmer in Desert Center, California, says of the Desert Sunlight Solar Farm being built near her home: “My heart aches every time I look out my window and see the construction over there. It’s just unbelievable, the destruction.” The Desert Sunlight plant is being built near Charpeid’s 10-acre plot near the Joshua Tree State Park. It is projected to provide enough power to run 160,000 average homes and decrease the amount of CO2 pumped into the atmosphere by 300,000 tons annually. Seventeen “Solar Energy Zones” have been proposed for California by the Bureau of Land Management and the US Department of Energy. Charpeid says of the zones: “This is a whole new form of gentrification. If all these projects come to fruition, people will simply not be able to live here. This is all seems like corporate welfare to me.” Critics worry that although water is not used by all solar-thermal plants for power generation, the water consumed by the plants—keeping dust down, rinsing panels, providing for the needs of workers—will deplete the water reserves in the area. In Desert Center, the residents’ water comes from deep underground reservoirs that are not generally replenished by groundwater; Charpeid says their water was found to be up to 30,000 years old. She also worries about the impact on the local weather: dust storms have increased over the last few years, she says, threatening her ability to farm jojoba. And animal habitats are being threatened. “I really wish [President] Obama would’ve given out that stimulus money to do rooftop solar instead,” she says, “like they’ve done in Germany.” LADWP board commissioner Jonathan Parfrey, the director of advocacy organization Climate Resolve, says: “I’ve been out in the desert; I know some of the people being impacted. I’m an enviro, I want to conserve that land. But it’s not just as easy as saying LA’s got to slap solar on rooftops. There has to be a balanced approach.” Parfrey says that solar plants need to be constructed in areas that are not rich in wildlife or used for recreational purposes, but adds that these solar desert plants must be built somewhere. Using solar arrays on rooftops of businesses and homes is expensive, he says, and sometimes interferes with distribution balancing and voltage problems as they co-exist with grid-produced electricity. He says: “In my view the transition to clean energy has to happen as inexpensively as possible. Otherwise people will rebel and they won’t even want to pay for it in the face of climate impacts. They will say, ‘That’s too bad about what’s happening to the environment, but I can’t afford to put food on my table because my electricity bills are too high.’” The LADWP is experimenting with inexpensive solar rooftop arrays, Palfrey says. “If I could have my moment like in The Graduate where [a character] says to Dustin Hoffman, ‘The future is in plastics,’ mine is how do we do distributed generation where we maintain the utility business model and we’re able to provide continual service for people. When we find the magic key to that I think it will be a revolution. I think it will really help affect the transition away from fossil-fuel energy sources.” [Grist Magazine, 8/13/2013]
Keally DeWitt, an executive with solar provider SunRun, writes an opinion column lambasting a proposal by the Arizona Public Service (APS) utility company that would drastically overhaul Arizona’s net metering policy, favoring the utilities and damaging the ability of solar installers like SunRun to function in Arizona. DeWitt says the proposal, if approved by the Arizona Corporation Commission (ACC), would doom the solar industry in that state. APS has proposed two options to replace the current policy. One is to charge solar homeowners $50 to $100 a month for accessing the electrical grid, no matter how little they may actually use electricity generated by the utilities (see July 16, 2013). The second option is to change the net metering practice from paying solar power consumers a credit for solar consumption at the retail rate to the much lower wholesale rate. APS has stated, “The plan is built around two options, either of which would ensure that APS customers who choose rooftop solar in the future will be compensated fairly for the electricity they generate and pay a fair price for their use of the electricity grid.” DeWitt writes that APS is “ignoring the fact that clean, local energy is worth more than fossil fuel-generated energy being transported hundreds of miles.… Both options would eliminate any financial benefits for homeowners, especially those in the working or middle classes, who want to control costs with rooftop solar.” DeWitt says that APS has created “astroturf,” or fake grassroots, groups such as 60 Plus and Prosper HQ, and used those groups to air advertisements attacking solar users. One ad compares Arizona’s solar industry to the bankrupt, much-reviled solar corporation Solyndra, and claims, “California billionaires are getting rich off of your tax dollars.” DeWitt writes, “Using outdated scare tactics and financial figures that have been publicly denounced, the groups appear to be blatantly lying to the public (and driving people crazy through overplaying their ads on YouTube).” Bryan Miller, an executive for SunRun and the head of the Alliance for Solar Choice (see Shortly Before May 10, 2013), called the ad a “disgusting attack against their own Arizona solar customers,” and said APS is responsible for the video. APS spokesperson Jenna Shaver retorted, “APS had nothing to do with the making of or the content of the video, but we were aware 60 Plus was going to engage in the discussion and we welcome their support.” Shaver said the ad merely counters attack ads aired by the Arizona solar industry. A solar advocacy group, Tell Utilities Solar won’t be Killed (TUSK), headed by Republican Barry Goldwater Jr., has countered with its own ad featuring rooftop solar customers and a rooftop solar worker, all APS ratepayers, who are against the changes. TUSK’s Jason Rose recently said: “The proposal allows the ACC to create a backdoor tax on solar owners that will either severely curtail or kill solar in Arizona.… Solar is a disruptive technology and APS can’t compete. They are trying to maintain their profits and protect their shareholders’ stock price. We have spent a lot of time talking with them and they fear for their future.” One homeowner told DeWitt: “I had a solar system installed over a year ago and it has been a great benefit to me. APS, even more, benefits from the electricity that I produce. It does not cost them anything to produce the electricity; I even pay for the repairs that are needed. Why should I be penalized from going solar? This will only deter people from purchasing solar and eliminate jobs in the growing solar market in Arizona.” Rose recently told a reporter, “After conservative states like Idaho and Louisiana rejected proposals to change net metering, it would be a travesty for Arizona, the sunniest state in the union, to do it.” Miller said flatly, “The fight for net metering in Arizona is the most significant fight for solar in the country.” [Greentech Media, 7/3/2013; Greentech Media, 7/12/2013; Renewable Energy World, 8/14/2013]
Entity Tags: Jenna Shaver, Arizona Public Service, Arizona Corporation Commission, 60 Plus, Barry Goldwater Jr., Jason Rose, Prosper HQ, SunRun, Keally DeWitt, Tell Utilities Solar won’t be Killed, Bryan Miller
Timeline Tags: US Solar Industry
Grist columnist and solar power expert David Roberts lays out three ways the American populace can have relatively unfettered access to solar energy, given the recalcitrance and active opposition of the conventional power utility companies and many lawmakers. Once renewable energy becomes more accessible and widespread, it becomes more of an economic force, creating jobs and generating a revenue stream. “That’s why renewable power remains untouchable in German politics,” he writes, “lots of Germans are directly involved with it.” [Grist Magazine, 9/13/2013]
Leasing - Most American families cannot afford the initial costs of a rooftop solar array, especially when it will take five or 10 years to recoup those costs. Add to that the fact that the homeowner must manage their individual “power plant,” and stay in the home long enough to see financial benefits, and most American families are unwilling to take on such a burden. Roberts suggests that many families may benefit from leasing rooftop solar arrays from companies such as SunRun, SolarCity, or Sungevity. “The solar company effectively becomes a utility,” he writes. “You pay them a monthly fee for the electricity the panels produce.” Most homeowners will either break even on their electricity costs, or save money, in part depending on whether the solar providers in their areas are eligible for state mandates or rebates. Southern California is experiencing quite a boom in solar leasing, with some $1 billion in economic activity being generated since 2007. The National Renewable Energy Laboratory recently found that solar leasing “has enticed a new demographic to adopt PV [photovoltaic] systems that is more highly correlated to younger, less affluent, and less educated populations than the demographics correlated to purchasing PV systems.” By appealing to less affluent consumers, “third-party PV products are likely increasing total PV demand rather than gaining market share entirely at the expense of existing customer owned PV demand.” SunRun president Lynn Jurich says, “[A]bout 75 percent of Californians switching to solar now choose solar power service” over ownership. Other states featuring solar leasing include Arizona, Colorado, Massachusetts, New Jersey, Oregon, Pennsylvania, and Texas. SunPower executive Howard Wenger said of his company’s lease program in August 2012: “It’s growing incredibly fast. We’re at a rate of about 1.5 megawatts to 2 megawatts per week.” [Forbes, 8/9/2012; Grist Magazine, 9/13/2013]
Community Solar - Some 70 to 80 percent of Americans live in buildings unsuitable for rooftop solar panel arrays. One alternative they have is to form communities of solar power users. Together, they can lease or buy solar arrays. Some power utilities own or operate solar power projects that ratepayers can join. Other people are forming their own communities, either in a business or non-profit enterprise. [Institute for Local Self-Reliance, 5/1/2012; Grist Magazine, 9/13/2013]
Solar Power Purchasing Agreements - Solar power purchasing agreements (PPAs) are similar to leases, where individuals buy power from third-party owners and operators of solar arrays. One large organization investing in PPAs is the US military, which is working with SolarCity to lease solar arrays for 120,000 military residences in California and Colorado. Some states have laws making it difficult or downright impossible for PPAs to exist. [Los Angeles Times, 7/17/2012; Environmental Protection Agency, 10/16/2012; Grist Magazine, 9/13/2013]
The Ivanpah Solar Electric Generating System, located on 3,500 acres in the Mojave Desert, begins generating electricity. The solar thermal power plant uses a circular array of mirrors to concentrate sunlight at a water-filled central tower. The resulting steam powers turbines, which in turn produce electricity. When fully operational, the Ivanpah plant will feed 377 megawatts of power into two California utilities, Pacific Gas and Electric (PG&E) and Southern California Edison. During some days, the power generated could serve up to 200,000 residential consumers. The project is a partnership between NRG Energy, BrightSource Energy, Google, Bechtel, and the federal government, which leased public land to the plant and provided loan guarantees (see February 2009). Some environmentalists have been sharply critical of the impact on the desert environment (see August 13, 2013), and other critics have asked why a desert solar power plant is not using photovoltaic panels to collect sunlight. NRG Solar president Tom Doyle says, “Given the magnitude and complexity of Ivanpah, it was very important that we successfully complete this milestone showing all systems were on track.” Unit 1 is producing energy; Units 2 and 3 are coming online soon. When fully operational, the three plants will almost double the amount of commercial solar thermal energy capacity now operating in the US. [NRG Solar, 2012; Business Wire, 9/24/2013; Grist Magazine, 9/25/2013]
Reporter Grace Wyler of the online technology magazine Motherboard writes that solar power generation “poses a mortal threat to the mainline power utilities that have dominated energy distribution in the US since the late 19th century.” Wyler echoes the findings of a January 2013 report by the Edison Electric Institute (EEI—see January 2013). The price of solar energy is dropping, she writes, and a new solar unit is being installed somewhere in the country every four minutes. The nation’s solar capacity has doubled since 2008 and costs are down 40 percent. Within 10 years, perhaps sooner, analysts predict, the price of solar generated energy will reach parity with other power sources. Naturally, conventional energy utility companies “are waging an escalating war against independent power distributors, and particularly against a new crop of solar technology companies that threaten to disrupt their century-old business model,” she writes.
Net Metering Among Largest Issues - One of the biggest issues is “net metering,” a policy which allows renewable energy consumers to sell their excess power back to the grid at retail prices. Net metering is taking the place of state subsidies for solar energy producers, allowing solar consumers to lower their energy bills. However, utilities fear what Wyler calls “a so-called ‘utility death spiral,’ in which more and more customers generate their own power, forcing utilities to charge higher rates to maintain infrastructure that was intended for a much larger pool of energy consumers, which will in turn encourage more people to turn to distributed energy options—which in most cases means solar panels.” Duke Energy CEO Jim Rogers told a Bloomberg reporter: “It is obviously a potential threat to us over the long term. If the cost of solar panels keeps coming down, installation costs come down, and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.” The EEI wrote that if the utility industry does not take immediate action, renewable energy could soon cause “irreparable damages to revenues and growth prospects” of utilities. These firms are battling net metering, claiming that conventional energy consumers are paying higher rates because of solar energy usage, a claim that has been challenged (see April 5, 2013). Utilities are fighting net metering policies in at least 11 states, asking regulators to impose new rate structures that would lower the amount utilities pay to buy back excess power from renewables consumers, and in some cases impose new grid-use fees on solar customers. Solar energy and technology producers such as Sungevity, SunRun, and SolarCity are fighting back against the utilities’ push.
Odd Political Bedfellows Joining to Fight Utility Restrictions - The solar companies are fighting the policy restrictions, not just on financial grounds, but, Wyler writes, because they believe government-sanctioned utilities monopolies are outdated and interfere with progress, calling it “the techno-libertarian view that regulation is an impediment to innovation and technological progress.” SolarCity spokesperson William Craven says: “Having more choice and more competition in the sector benefits pretty much everyone except the monopoly that has enjoyed having a monopoly for the past 100 years. It’s not clear that that system benefits anyone else. Generally, greater choice and greater competition drives innovation and drives reduced costs.” Many libertarian conservatives are joining the push for deregulation, broadening the base of solar consumers and advocates by aligning themselves with the more left-leaning solar advocates whose push for renewable energy is largely driven by environmental concerns. Even some far-right tea party groups are joining the push for deregulation. “From a conservative, or libertarian, perspective, it raises the question of why are we giving these guys a monopoly when they don’t need it anymore?” says John Farrell of the Institute for Local Self-Reliance, which pushes for distributed generation. “We can generate electricity in lots of different ways. We don’t need a big centralized corporate entity to generate electricity. We can do it ourselves.” Wyler says this “strange grassroots coalition” is successfully fighting back against the utilities’ attempts to weaken net metering, citing victories in California, Georgia, Idaho, and Louisiana. Rosalind Jackson of Vote Solar says: “Utilities have a simple argument that sounds compelling, but time and again, we’ve seen such strong public outcry against the idea of utilities trying to take away the right to generate power that the decisions have actually come down on the side of solar customers.… This is a regulated industry that has not had to innovate for a century. But they are faced with a real disruptive technology. There are new entrants for customers who have never had an option before. So that’s a very real threat.” [Motherboard, 9/23/2013]
Grist reports new data that shows America is using substantially less energy than in previous years, because of gains in energy efficiency as well as shifting market conditions and pollution regulations. CO2 emissions have dropped from 1.6 billion tons in 2007 (a record peak) to 1.4 billion tons in 2011, an 11 percent drop. Emily E. Adams of Earth Policy writes that both vehicle fuel efficiency and the number of miles driven by vehicles are improving, adding: “Average fuel efficiency, which had been deteriorating for years in the United States, started to increase in 2005 and keeps getting better. Americans are traveling farther on each gallon of gas than ever before. Furthermore, people are driving less. For many years Americans as a group drove billions more miles each year than the previous one. But in 2007 this changed. Now more cars stay parked because more people live in urban areas, opt for public transit, work remotely, or retire and thus no longer commute to work.” Coal, the dirtiest fossil fuel, is shrinking in usage, though it continues to dominate conventional energy generation structures. Utilities are steadily shifting from coal to natural gas, and some are retiring old, inefficient coal plants instead of paying for expensive retrofits to bring them in line with current pollution regulations. US carbon emissions from coal have fallen 20 percent from their peak in 2005. Natural gas usage has risen sharply, and even though it produces only half the CO2 emissions that coal produces, natural gas added 373 million tons of carbon to the atmosphere in 2012. Solar and wind energy have no carbon emissions whatsoever; solar usage has increased 1,400 percent since 2007, and wind usage over 300 percent. Adams writes, “This is just the beginning of reductions in carbon dioxide emissions as the explosive growth of wind and solar power cuts down the use of dirty fossil fuels.” President Obama has set a goal for the nation to reduce its greenhouse gas emissions by 17 percent by 2020, and the decrease in energy usage and improvements in fuel efficiency are helping to reach that goal. [Grist Magazine, 10/2/2013; Grist Magazine, 10/11/2013]
Arizona Public Service (APS), the state’s largest utility company, is using a new project it calls Solana to store solar energy collected during daylight hours to serve power demands during the night, according to an article published in the New York Times. APS had a three-mile stretch of desert near Gila Bend, southwest of Phoenix, bulldozed flat, and installed a network of parabolic mirrors that focus the sun’s energy onto a series of black-painted pipes. The pipes funnel the heat to large tanks of molten salt, which traps the heat until the plant draws the heat out of the salt and uses it to generate steam and electricity. The Solana project is an attempt to overcome one of the largest drawbacks of solar energy, the dearth of energy when the sun is not shining. “We’re going to care more and more about that as time goes on,” says APS general manager Brad Albert. Other states are watching the Solana project closely; California has just approved a rule requiring the state’s utilities to install storage facilities by 2024. Robert Gibson of the Solar Electric Power Association says: “The impetus to require storage is definitely inspired by the success of solar. Hopefully the California initiative is going to kick-start this and bring down costs.” Battery storage has always been a promise, he says, but cost-effective storage “has always been a few years out.” The biggest challenge for Arizona solar users, mainly individuals with rooftop solar arrays, is generating power in the early morning hours, before the sun has risen enough to activate the panels. Arizona and California also face similar problems in the evening, when the sun is too low for the panels to work well and people are returning home. By 6 p.m., most solar arrays are working at half capacity at best, even if they are installed on tracking devices that tilt the panels to follow the sun across the sky. Solana was built with a $1.45 billion loan guarantee from the US Department of Energy. Another similar project, also built with federal loan guarantees, is the Ivanpah project in California (see September 22, 2013). Cara S. Libby of the Electric Power Research Institute says, “There will be a trend towards storage as we see more variable renewables like photovoltaics and wind being added to the grid.” The flexibility of such a system becomes more important as a utility adds higher volumes of inflexible renewables, Libby says. Solana is not the first renewable energy plant with storage; others use banks of electric batteries. But battery storage is so expensive that it is primarily used to smooth the output of the plant and not to store large amounts of energy overnight. Storing energy as heat is much cheaper, but is mechanically inefficient. [New York Times, 10/17/2013]
The Arizona Public Service (APS), Arizona’s largest utility, admits that it paid a national conservative organization, the 60 Plus Association, to run advertisements attacking Arizona’s solar energy industry. APS has previously denied funding the ad campaign (see August 14, 2013). APS is trying to persuade the state’s public utility commission to change a state policy allowing homes and businesses that generate their own solar power to sell the excess energy they generate back to the grid (see July 16, 2013), a practice known as “net metering.” Solar advocates say the policy has helped create an increasing demand for rooftop solar energy equipment. APS has argued that solar energy producers pay less than their fair share for conventionally generated electricity, a popular argument among conservative opponents of solar power (see October 15, 2012) that has been challenged as false and misleading (see April 5, 2013 and July 31, 2013). A recent report showed that the utility companies fear massive loss of revenues in the future as solar power begins to eat into their monopoly on electricity provision in Arizona and other states (see January 2013), in part because most utility companies find it difficult and expensive to modernize their industry (see February 7, 2013). Solar advocates say that the elimination of net metering would essentially “kill rooftop solar in Arizona” (see August 14, 2013). Republican state icon Barry Goldwater Jr. leads a pro-solar organization, TUSK, that many in the conventional utility industry seem to fear. In July 2013, APS spokesman Jim McDonald flatly denied that APS was paying 60 Plus to run the ads, telling a reporter, “No, we are not” funding the ad campaign. But reporting by the Arizona Republic has revealed that APS did pay 60 Plus to run ads attacking the solar industry, as well as paying other groups such as Prosper and perhaps others to engage in similar advertising. McDonald now admits, “It goes through our consultant, but APS money does ultimately fund 60 Plus and Prosper.” McDonald now says he was not lying in July, because “[t]hat was my understanding at the time.” He denies knowing how much APS has paid 60 Plus, Prosper, and perhaps other groups, but says whatever money was spent came from shareholders’ funds and not ratepayer money. He then pivots, saying that the issue is “a phony controversy fueled by opponents who are eager to distract attention from the real substance from the issue.” He adds: “We’re in the middle of a bitter political fight. This is not a battle that we want to fight, but we cannot back down.… [W]e are not going to lie down and get our heads kicked in. We are just not. We are obligated to fight. It is irresponsible to our customers not to fight back.” APS vice president John Hatfield tells another reporter that APS “is contributing money to the nonprofits [60 Plus and Prosper], and potentially other groups through political consultant Sean Noble and his firm, DC London.” McDonald denies that APS is anti-solar, but the ads by 60 Plus are openly hostile to solar energy. Prosper has aired ads attacking both solar energy and Medicaid expansion. Bryan Miller of the Alliance for Solar Choice says: “APS knows how popular solar is. Rather than owning up to their attacks, they set up shady organizations and worked behind them, and lied to the public and regulators for months and months. They owe the public an explanation.” Solar industry officials say that most consumers would not choose to use solar if they did not get credit for the excess energy they give back to APS. Lyndon Rive, the founder and CEO of Solar City, says that most new solar customers are installing the panels with leases, and with their new lower power bill and lease payment, they save from $5 to $10 a month. Any additional cost to solar customers greater than a few dollars would prevent most people from using solar, he says, a claim that other industry experts echo. Goldwater recently told a reporter, “Innovation is happening all around APS, and they are sitting there like an elephant in a mud puddle.” He added: “All of the [utility] commissioners are Republicans and conservatives who believe in [market] choice. They will come down on the side of competition and against APS. They better, or they are in trouble. That’s why we have elections. If we don’t like the job they are doing, we will replace them. The people in the bleachers know a lot more about what’s going on down on the field than we give them credit for.” McDonald says TUSK and other pro-solar groups are merely masquerading as conservatives, and in truth are linked to Democrats and the Obama administration.
60 Plus Funded by Koch Brothers; Ads Link Arizona Solar Industries to Solyndra - 60 Plus, an organization that calls itself a more conservative alternative to the more mainstream AARP, is a lobbying organization funded by oil magnates Charles and David Koch (see 1981-2010). In recent years, 60 Plus has produced ads attacking health care reform using false and misleading claims (see Shortly Before August 10, 2009 and August 11, 2009), and was part of a 2009 push to create “astroturf” (fake grassroots) organizations to attack health care legislation (see August 14, 2009). 60 Plus has led the conservative pushback against TUSK and other pro-solar lobbying and advocacy groups, calling net metering “corporate welfare.” The ads attempt to link Arizona solar energy companies SolarCity and SunRun with Solyndra, the solar manufacturer that went bankrupt in 2011. The two firms have no known connections to Solyndra. One ad shows images of secretive businessmen doing deals outside a corporate jet while the voiceover tells listeners, “California billionaires are getting rich off of your tax dollars.” The Prosper ad made an unsubstantiated claim that every rooftop array “adds $20,000 in costs to customers,” a claim that APS CEO Don Brandt has made since the spring of 2013. 60 Plus is led by Noble, a conservative operator who has been called “the wizard behind the screen” in the Koch’s donor network.
Prosper Founded by Republican Politicians and Staffers - Prosper is led by former Arizona House Speaker Kirk Adams, a Republican, and former staffers for ex-Senator Jon Kyl (R-AZ). Adams denies that Prosper was formed to work on APS’s behalf, and that it is also working to block Arizona’s planned expansion of Medicaid. [Arizona Republic, 10/21/2013; Mother Jones, 10/21/2013; GreenTech, 10/22/2013; Huffington Post, 10/25/2013]
Entity Tags: David Koch, Barry Goldwater Jr., Arizona Republic, Arizona Public Service, 60 Plus Association, Charles Koch, SunRun, Sean Noble, SolarCity, Lyndon Rive, Kirk Adams, John Hatfield, Bryan Miller, Jim McDonald, Prosper, Solyndra Corporation
Timeline Tags: US Solar Industry
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