A presentation on the opportunity and benefits of expanding local, distributed solar power in the United States. Delivered to the MDV-SEIA Solar Energy Focus conference on Nov. 18, 2011 by John Farrell, Senior Research at the Institute for Local Self-Reliance.

1. 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

2. 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
power
Factory Commercial plant
building

3. Enormous Solar Potential

4. Enormous Solar Potential
Rooftops Alone
Most states could get 20%

5. Solar Fits Anywhere
U.S. 10%
Highway
100%
ROW
Parking
1%
lots
Transmission
4%
ROW
The U.S. could get 100%

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

7. Retail Electricity Price
State average residential retail rate

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

9. 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

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

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

12. Solar Cost : Grid Price
-7% +2%
50% or better
95% to 105%
2013
7 states 150% or more

13. Solar Cost : Grid Price
-7% +2%
50% or better
95% to 105%
2014
11 states 150% or more

14. Solar Cost : Grid Price
-7% +2%
50% or better
95% to 105%
2015
18 states 150% or more

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

16. Value of Local Solar
Electricity
•avoided cost
10 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?

17. Value of Local Solar
Grid Benefits
•avoided cost
10 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?

18. Value of Local Solar
Social Benefits
•avoided cost
10 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?

19. 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

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

21. 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

22. 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

23. 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.

24. Germany: Boots on Roofs
3 gigawatts in 2009
80%

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

26. 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)

27. 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)

28. Barriers?
Sun is predictable

29. Barriers?
Weather is too

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

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

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

33. Solar Policy Matters
Public Support
No 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

34. Solar Policy Matters
Political Support
2 kilowatts
2 VOTERS

35. Solar Policy Matters
Problems with Tax Incentives
I want you
if you have taxable income
City
School
Cooperative
Non-profit

36. Solar Policy Matters
Roadblocks

37. Solar Policy Matters
Roadblocks

38. Solar Policy Matters
Ownership = Market Security

39. 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
power
Factory Commercial plant
building

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