The Future of Solar Economics and Policy

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In the near future, solar energy will become remarkably cost effective relative to its value to the electric grid and particularly to the retail energy prices paid by consumers. Will existing …

In the near future, solar energy will become remarkably cost effective relative to its value to the electric grid and particularly to the retail energy prices paid by consumers. Will existing distributed generation policy still work in an era of cost-effective solar?

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  • 1. FROM SMALL-TIME AND SUBSIDIZED TO ECONOMICAL MAINSTAY OF A DEMOCRATIC GRID THE FUTURE OF SOLAR John Farrell Director of Democratic Energy October 2014
  • 2. $0.30 $0.20 $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE COST OF SOLAR FAR EXCEEDS ITS VALUE AND THE RETAIL ENERGY PRICE THE PAST Value of solar energy (MN, 2014) 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 3. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE PAST Value of solar energy (MN, 2014) THE COST OF SOLAR FAR EXCEEDS ITS VALUE AND THE RETAIL ENERGY PRICE 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 4. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE COST OF SOLAR FAR EXCEEDS ITS VALUE AND THE RETAIL ENERGY SOLAR CUSTOMERS PROVIDED MORE VALUE TO GRID THAN THEY GOT PAID FOR THE PAST Value of solar energy (MN, 2014) PRICE 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 5. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE COST OF SOLAR, VALUE OF SOLAR, AND RETAIL ENERGY PRICE ARE ALL SIMILAR SOLAR CUSTOMERS PROVIDED MORE VALUE TO GRID THAN THEY GOT PAID FOR PRESENT THE PAST Value of solar energy (MN, 2014) 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 6. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE COST OF SOLAR, VALUE OF SOLAR, AND RETAIL ENERGY PRICE ARE ALL SIMILAR MINIMAL SUBSIDIES SOLAR CUS TOME R S NE EDED PROVIDED MORE VALUE TO GRID THAN THEY GOT PAID FOR PRESENT THE PAST Value of solar energy (MN, 2014) 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 7. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE RETAIL ENERGY PRICE IS HIGHER THAN THE VALUE OF SOLAR, ITSELF HIGHER THAN THE COST OF SOLAR Value of solar energy (MN, 2014) THE FUTURE SOLAR CUSTOMERS PROVIDED MORE VALUE TO GRID THAN THEY GOT PAID FOR MINIMAL SUBSIDIES NEEDED PRESENT THE PAST 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 8. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy THE RETAIL ENERGY PRICE IS HIGHER THAN THE VALUE OF SOLAR, ITSELF HIGHER THAN THE COST OF SOLAR RETAIL RATE COMPENSATION (NET METERING) EXCEEDS VALUE OF SOLAR Value of solar energy (MN, 2014) THE FUTURE SOLAR CUSTOMERS PROVIDED MORE VALUE TO GRID THAN THEY GOT PAID FOR MINIMAL SUBSIDIES NEEDED PRESENT THE PAST 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 9. $0.30 $0.20 TAXPAYER-FUNDED SUBSIDIES MADE SOLAR ECONOMICAL $0.10 $0.00 Value of solar energy Retail (net metering) rate Cost of solar energy RETAIL RATE COMPENSATION (NET METERING) EXCEEDS VALUE OF SOLAR Value of solar energy (MN, 2014) VALUE OF SOLAR ALONE IS SUFFICIENT TO COMPENSATE SOLAR PRODUCERS THE RETAIL ENERGY PRICE IS HIGHER THAN THE VALUE OF SOLAR, ITSELF HIGHER THAN THE COST OF SOLAR THE FUTURE SOLAR CUSTOMERS PROVIDED MORE VALUE TO GRID THAN THEY GOT PAID FOR MINIMAL SUBSIDIES NEEDED PRESENT THE PAST 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
  • 10. FUTURE POLICY PRINCIPLES • Democracy: energy policy should encourage broad ownership of energy production. • Equity: subsidies should be accessible (not tax-based) but progressive (funded from non-regressive sources), and phased out over time. Producing local renewable energy should be reasonably profitable. • Local: policy should encourage communities to maximize capture of their energy dollars with conservation, energy efficiency, and local power generation.
  • 11. FURTHER READING • Report: Minnesota’s Value of Solar (ILSR, 2014): www.ilsr.org/minnesotas-value-of-solar/ • An Enormous Question for ‘Solar Choice’: www.ilsr.org/enormous-question-solar-choice • Advantage Local: Why Local Energy Ownership Matters: http://bit.ly/AdvLocal