After Wall Street popularized the term “mortgage-backed securities” in their destruction of the economy in 2008, you could be forgiven for thinking “solar securities” are a pyramid scheme.  But in truth, they may hold the key to democratizing the financing and the ownership of distributed renewable energy. Right now, financing solar typically means looking for a “tax equity” partner who will provide some upfront cash to build a solar array in exchange for helping to use the federal tax incentives for solar.  These are business deals, and the tax equity folks may demand a 30% return on their equity (or …

Your mind-blowing chart of the day, courtesy of Arne Jungjohann at the Heinrich Böll Foundation.  To be fair, there's little need for air conditioning in Germany compared to the United States, but air conditioning only accounts for about 20% of U.S. household electricity consumption.  Leaving it out make it 9,200 kWh vs. 3,100 kWh. Wow. Source for U.S. use; source for German use; used U.S. average household size of 2.6.

I often get flak when I publish research on the cost trajectory for solar (my "Rooftop Revolution" report estimates 100 million Americans reaching grid parity by 2021). About half think I’m too conservative, and half think I’m too overconfident that solar will continue to drop in price by 7 percent per year indefinitely.

But I’m not alone in perceiving an enormous cost reduction opportunity for solar in the United States. An article in Forbes last week suggested that we can "Cut The Price Of Solar In Half By Cutting Red Tape."  It provides a chart (reproduced below) like one I published in March, that shows how a similarly sized residential solar array in Germany costs 60 percent less than one built in the U.S.

In Thomas Friedman’s latest column, he praises Supreme Court Chief Justice John Roberts because he “took one for the country.”  Friedman sees that “America today is poised for a great renewal” if only it can get some “big, centrist, statesmanlike leadership.” Logically, there would be some renewable (energy) in America’s renewal, right? Wrong.  Here’s Friedman’s vision for America: Our newfound natural gas bounty can give us long-term access to cheap, cleaner energy and, combined with advances in robotics and software, is already bringing blue-collar manufacturing back to America. Web-enabled cellphones and tablets are creating vast new possibilities to bring high-quality, …

If you haven’t heard yet, there’s a “rule” that precludes distributed renewable energy projects from supplying more than 15% of the power to most “distribution circuits” (part of the low-voltage electric grid that brings power into homes and businesses).  With the rapidly falling cost of solar power, many places in the country are starting to push up against this limit. So there’s good news recently in California, where the state’s investor-owned utilities agreed to raise this somewhat arbitrary limit and accept more distributed generation. The process of setting the rule is almost comical, although the rationale isn’t.  Utilities want to …

In a new report on U.S. CLEAN (Clean Local Energy Accessible Now) programs, I provide a comparison of solar CLEAN Contract (feed-in tariff) rates across the United States. Comparing published rates is not particularly helpful, however, because contract lengths vary (from 15 to 25 years) and the solar resource also varies widely.  For international comparisons (e.g. Germany), it's also necessary to account for the currency exchange rate and the federal tax incentives that are routinely factored in to U.S. solar CLEAN prices. Here's a look at the methodology for normalizing the CLEAN rates for comparison, and two maps illustrating those …

New Local Solar Policy, Not DeLorean, Moving U.S. to Cleaner Future

In the past five years, a new U.S. renewable energy policy has quietly grown more popular, enabling enough solar power (1.21 gigawatts!) to send Michael J. Fox “Back to the Future.”  CLEAN programs – Clean Local Energy Accessible Now – have been adopted in 14 states and can significantly increase the deployment of local solar power, says a new report from the Institute for Local Self-Reliance (ILSR).

The 1.21 gigawatts of distributed solar power planned under CLEAN programs (also known as “feed-in tariffs”) represents one of the largest expansions of solar power in the country, without a focus on the largest scale projects.  CLEAN programs encourage rooftop and commercial-scale solar power located near where electricity is used.

“The rise of CLEAN programs is the answer to the question of capturing the economic benefits of clean energy development,” notes report author and ILSR senior researcher John Farrell.  “States and municipal utilities have created CLEAN programs to enable their citizens to become local energy and jobs producers.”

Read the Report

The report provides a list of the 17 operational CLEAN programs, from the tiny Farmers Electric Cooperative program in Iowa to the 500 megawatt statewide program in California, to the just-launched CLEAN programs in Los Angeles and Long Island, NY.  The report also explores the lessons learned from these early programs, so that policy makers looking to marry the energy and economic benefits of clean energy will be able to craft the most effective policy.

One of the big lessons is that state and local U.S. CLEAN programs begin to bring order to otherwise fragmented energy policy in the U.S.

“CLEAN is simple and comprehensive, unlike the hodge-podge of federal, state, and utility renewable energy incentives,” says Farrell.

“This local energy policy is getting us to a better future – and we don’t even need a time-traveling DeLorean.”

The report, U.S. CLEAN Programs: Where Are We Now? What Have We Learned? is available at ilsr.org

This post originally appeared on ILSR’s Energy Self-Reliant States blog.

Local ownership of a wind project accounts for half of its lifetime economic value to the community!

From: Value Creation for Local Communities through Renewable Energies [pdf]

This post originally appeared on ILSR’s Energy Self-Reliant States blog.

A version of this article originally appeared on ILSR’s Energy Self-Reliant States blog.

Utilities often claim that allowing customers to run their meter backward (by generating electricity on-site, e.g. from rooftop solar) can affect their bottom line because these customers don’t pay enough to cover the cost of maintaining the grid.  In at least one case, however, a utility’s cost-benefit analysis of net metering was turned on its head in an independent review.

Presenting as part of Vote Solar’s Data Not Drama webinar on net metering last month, Interstate Renewable Energy Council’s (IREC) Joe Wiedman showed the Public Service Company of New Mexico (PNM) erred in proposed standby charge of 5.3 cents per kWh for net metering customers. The utility asserted that this charge -- ostensibly to backup these on-site generators -- would allow the utility to recover its costs from these customers busily spinning back their meters. IREC’s review of their analysis, however, showed that net metering was actually a net benefit to the utility.

The differences were substantial. While PNM had given almost no value to net metering systems, IREC’s review found that the on-site generation helped the utility avoid energy costs, line losses, capacity upgrades, and transmission costs worth over 15 cents per kWh. Even when balance against the transmission and distribution costs, and power generation costs to the utility of supporting net metering, the policy had a net benefit of 7.8 cents per kWh, a 13-cent difference!

The following chart illustrates, with the perceived costs shown in red (positive) and perceived benefits in green (negative).

The lesson for advocates of distributed generation is clear: challenge utility valuation of net metering and of distributed renewable energy.  You can never be sure what they overlook.