Democratizing the Electricity System: A Vote for Local Solar

Democratizing the Electricity System A Vote for Local Solar John Farrell, Director Energy Self-Reliant States and Communities program jfarrell@ilsr.org 612.276.3456 x210 Presentation on Nov. 18, 2011

ILSR’s Unique Perspective Yesterday Tomorrow Centralized Power Clean, local power Solar PV power plant Storage Storage Transmission network Storage Storage House Local CHP plant Distribution network House with domestic CHP Wind powerFactory Commercial plant building

Enormous Solar Potential

Enormous Solar PotentialRooftops Alone Most states could get 20%

Solar Fits AnywhereU.S. 10% Highway100% ROW Parking1% lots Transmission4% ROW The U.S. could get 100%

Overview• Electricity system in transition• Economics of distributed solar• Scale (doesn’t) matter• Barriers are surmountable• Policies (do) matter

Retail Electricity PriceState average residential retail rate

Solar Cost : Grid Price$4.25/W- 30% ITC ÷25 yrs. v. avg. residential retail rate

Solar Cost : Grid Price$4.25/W avg. residential- 30% ITC retail rate 50% or better 95% to 105% 2011 1 state 150% or more

Solar Cost : Grid Price-7% +2% 50% or better 95% to 105% 2012 3 states 150% or more

Solar Cost : Grid Price-7% +2% 57 million 50% or better 95% to 105% 2012 3 states 150% or more

Solar Cost : Grid Price-7% +2% 167 million 50% or better 95% to 105% 2016 22 states 150% or more

Value of Local Solar Electricity •avoided cost10 cents •on-site/near demand $4.25/W •lower transmission losses 5 cents •reduce dist. system stress 0 cents •hedge against fuel prices •prevent blackouts -5 cents •reduce pollution-10 cents 20 cents •create jobs-15 cents 4 cents-20 cents Cost Energy value Grid benefits Social benefits Report: Solar Power Generation in the US: Too expensive, or a bargain?

Value of Local Solar Grid Beneﬁts •avoided cost10 cents •on-site/near demand •lower transmission losses 5 cents •reduce dist. system stress 0 cents •hedge against fuel prices •prevent blackouts -5 cents •reduce pollution-10 cents 20 cents •create jobs 8.5 cents-15 cents 4 cents-20 cents Cost Energy value Grid benefits Social benefits Report: Solar Power Generation in the US: Too expensive, or a bargain?

Value of Local Solar Social Beneﬁts •avoided cost10 cents •on-site/near demand •lower transmission losses 5 cents •reduce dist. system stress 0 cents •hedge against fuel prices 12.5 cents •prevent blackouts -5 cents •reduce pollution-10 cents $4.25/W •create jobs 8.5 cents-15 cents 4 cents-20 cents Cost Energy value Grid benefits Social benefits Report: Solar Power Generation in the US: Too expensive, or a bargain?

Value of Local Solar Example: Grid Beneﬁts $0.15 6 cents per kWh $0.12 in addition to electricity $0.09 $0.06 Additional local value Avoided transmission access $0.03 Environmental Time-of-delivery Avoided cost $0 Palo Alto, CA, municipal utility

Part 3: Scale• Electricity system in transition• Economics of distributed solar• Scale (doesn’t) matter• Barriers are surmountable• Policies (do) matter

Economies of Scale$10.00 2009 2010 $7.50 $5.00 $4.25 Installed cost per Watt $3.75 $2.50 $0 Under 2 kW 5-10 30-100 250-500 over 1000 kW Lawrence Berkeley Labs: Tracking the Sun IV

Economies of Scale$10.00 2009 2010 $7.50 $5.00 Installed cost per Watt $2.50 $0 Under 2 kW 5-10 30-100 250-500 over 1000 kW Lawrence Berkeley Labs: Tracking the Sun IV

Small PV is Fast (SEPA)• PV projects...have much shorter planning horizons and project completion times, along with lesser siting, permitting, ﬁnancing and transmission requirements at these small- and medium-sized scales.• Larger PV and CSP projects (those greater FERC than 50 MW) require overcoming ﬁnancing, siting/permitting, and transmission barriers that might emerge at these larger sizes.

Germany: Boots on Roofs 3 gigawatts in 200980%

Part 4: Barriers?• Electricity system in transition• Economics of distributed solar• Scale (doesn’t) matter• Barriers can matter• Policies (do) matter

Barriers? Distribution Grid • Utilities in California (and elsewhere) generally agree that 15% distributed ?? generation on a local distribution circuit is the threshold for any problems. 15 • Many places (Nevada, Hawaii, elsewhere) are already beyond the minimum. Democratizing the Electricity System (ILSR, 2011)

Barriers? Intermittency Geographic Dispersion Lowers Solar Backup Costs $0.04 $0.04 $0.03 $ per kWh $0.02 $0.01 $0.01 $0.00 $0 1 location 5 locations 25 locations Implications of Wide-Area Geographic Diversity for Short- Term Variability of Solar Power (Lawrence Berkeley National Laboratory)

Barriers? Sun is predictable

Barriers? Weather is too

Barriers? Weather is too Nov. 10, 2011 BOULDER, Colo. Advanced Wind Forecasts Save Millions of Dollars for Xcel Energy

Part 5: Policy• Electricity system in transition• Economics of distributed solar• Scale (doesn’t) matter• Barriers can matter• Policies (do) matter

Solar Policy Matters Local Beneﬁts Local Ownership Boosts Impact of Renewables Economic Development Impacts of Community Wind Projects: A Review and Empirical Evaluation (NREL)

Solar Policy Matters Public SupportNo local ownership 60% negative Local ownership 45% positive 0 25 50 75 100 very negative negative neutral positive very positive Attitude towards increased use of local wind energy

Solar Policy Matters Political Support 2 kilowatts 2 VOTERS

Solar Policy MattersProblems with Tax Incentives I want you if you have taxable income City School Cooperative Non-proﬁt

Solar Policy Matters Roadblocks

Solar Policy MattersOwnership = Market Security

The Future... Yesterday Tomorrow Centralized Power Clean, local power Solar PV power plant Storage Storage Transmission network Storage Storage House Local CHP plant Distribution network House with domestic CHP Wind powerFactory Commercial plant building

Thank you!John Farrell energyselfreliantstates.org jfarrell@ilsr.org johnffarrell 612-276-3456 x210

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Democratizing the Electricity System: A Vote for Local Solar

by John Farrell

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