Should US set comprehensive policies for Solar energy?

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Should US set comprehensive policies for Solar energy?

Postby Probir Ghosh » Fri Apr 24, 2009 2:39 pm

Until the key stake holders sit down to agree on a 12 year plan and are willing to be held accountable for the long term goals, somewhat similar to the German 20 year model, it is not going to happen. On the other hand the current economic crisis provides our country a once in a lifetime opportunity to take on the leadership if we can move fast and get the 12 year plan in place. This is one area we need support from all key thought leaders.

The question we need to ask ourselves is do we have the will to take on global leadership on new energy initiatives and have the political will and consensus to move fast or do we want to risk some other countries taking on insurmountable lead (Germany) or some country waking up overnight and whizzing by us (China) because we are not willing to make the investment or focus needed for massive scaling?

While we believe Solar Energy has the largest potential to meet massive scaling needs at prices below traditional use of fossil fuels, we recommend a technology agnostic model where any sustainable energy that can meet the six parameters identified should be invested in.
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Re: Should US set comprehensive policies for Solar energy?

Postby Matt Baker » Fri Apr 24, 2009 3:05 pm

Germany is an excellent example of a country that decided to bring solar to scale. I think we need to be thinking along two paths: 1) Scaling to achieve the maximum penetration the grid can handle without storage. 2) Overcoming the limitations associated with intermittent resources and achieving significant penetration.

It seems to me, we could tackle the first problem and still have plenty of time to address the second problem. This is what the German’s have done and they did it predominantly through public policy. The principal vehicle was a feed in tariff. If the US is going to bring solar to scale we will need a similar focus and the policies to achieve that goal. What we have now - some carve outs within state Renewable Energy Standards coupled with (until recently) fluctuating tax credits will not get the job done.

We have to create incentives. The incentives have to be designed to encourage efficiency over time – reducing panel and BOS costs. We also have to create the infrastructure – particularly transmission for utility scale solar. But we need teams of people to figure this out. Given our markets, what works best? Expanded Renewable Energy Standards? Standard offer rebates? Feed-in tariffs? We need answers to these questions today.
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Re: Should US set comprehensive policies for Solar energy?

Postby Dr. Rajan Kapur » Fri Apr 24, 2009 3:07 pm

The question was raised about state leadership in energy efficiency — for Solar deployment, the current answer to such a question is to put it mildly, surprising.

For Solar, the southwest is blessed with sunshine, the northeast with high utility prices! Witness the per capita installed capacity of PhotoVoltaic in California and New Jersey. I will write elsewhere about innovations coming out of New Jersey.

The last major public/private initiative (the HDTV transition) saw manufacturing happen overseas — this time manufacturing investments and jobs can stay where there are markets and incentives (eg. Germany), or go where incentives are strongest (eg. Malaysia.

In Colorado,we have the resources and we have shown the will: Amendment 37 resulted in nation leading programs from our utilities.

Now we must scale, through durable public policy incentives, and local manufacturing where possible, to make a difference.
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Re: Should US set comprehensive policies for Solar energy?

Postby Sol Shapiro » Fri Apr 24, 2009 3:09 pm

Response to Matt Baker:
As I look at what Germany has done as well as what is happening in Spain on feed-in tariffs, I note the howls that have arisen as the subsidy level is reduced, so I wonder if the U.S. approach of some subsidy such as 30% tax credits and then an RPS isn’t a better way to test things. A second thought is that it isn’t obvious to me that we need to act in crisis. My take on the fact that we will be going to geoengineering as a necessary activity to forestall climate change. Thus, we can let the penetration go more slowly; for by doing this perhaps solar thermal with storage and perhaps enhanced geothermal will show better economics. I do think a national grid and recognition of the difference in generation cost in resource rich areas needs to be made apparent; and to find a way to have the resource poor areas invest in the rich areas???
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Re: Should US set comprehensive policies for Solar energy?

Postby Sol Shapiro » Fri Apr 24, 2009 3:58 pm

Taking a grand scale objective of preparing the nation for a renewables electric grid in the shortest possible time, I see as one major missing link the lack of national thinking. Each state seems to be doing its own thing. While renewables represent a few percent of generation whose costs are “hidden” in subsidies creates the impression that the proble can be solved locally. But do we really believe that this is possible? Without short term inventions in areas such as cost reduction of pv and storage, I don’t see it.
And so, pressing for a national grid would be one step in the direction of national thinking. For it might start to convince renewables poor segments of the country that they should be investing where the resources are most cost effective.
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Re: Should US set comprehensive policies for Solar energy?

Postby Sarah Kurtz » Fri Apr 24, 2009 4:05 pm

A number of the comments in this blog argue for focusing on one technology over another. I think it would be a big mistake for us to attempt to choose winners at this point. Can you name a battery technology that is the “winner” or are there many important battery technologies? Solar will need to be deployed in many locations and in many different configurations. I urge the community to provide opportunities for all sizes and all types of technologies/applications. We should create incentives and subsidies that allow all technologies to compete, make a plan to slowly decrease these incentives, then tweak the plan as the market response is observed. When possible, we should implement cost structures that reflect the true costs. As we compare the costs for adding energy storage, implementing demand-side management, and purchasing electricity from 1000 miles away, incentives could lead to bad choices. It’s not easy to define the best incentives, but the implementation of performance-based incentives, variable electricity rates that reflect time-of-day costs, and differentiating transmission from generation costs will help us to make wise choices. We should create an infrastructure that allows us to choose the approach that is most economical for the community.

As companies like First Solar are able to demonstrate success we can rejoice because this is our primary goal, but, these successes will make it difficult to keep the door open for new technologies. The longer we can keep the door open for new approaches, the more likely we are to identify the best approaches, ultimately. One strategy for the community to continue to take the risks associated with new technologies is by the Public Utility Commissions supporting acquisition of these. The PUCs are willing to pass on changes in natural gas prices to the rate payers without batting an eye. When viewed in the light of 2008’s high fossil-fuel costs, the risks associated with trying new renewable-energy technologies may be quite small, and are easily justified by the possibility that the success of one of these new technologies could provide a large benefit to the rate payers in subsequent years. Currently, new technologies/companies are experiencing difficulty getting funding from banks because the banks are trying to minimize risk, so the community can reduce this barrier by encouraging the PUCs to take on a small amount of risk.

Ultimately, the key is for us to focus on our end goal: a world that is run economically by sustainable sources of energy. We’ll get there fastest if we create the tools we need to make the wisest choices along the way, rather than trying to make the choices before we have the wisdom.
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Re: Should US set comprehensive policies for Solar energy?

Postby Dr. John Barnes » Tue May 19, 2009 11:50 am

Mr. Baker asks specifically about the need for a feed-in-tariff ruling for each state PUC.

Some people such as Bradford from the Prometheus Institute believe that only the 30% investment tax credit is needed along with normal market pressure to get to the rapid decline in installed costs for PV and reach "grid parity" for most of the US.

My take is that unless the large electric utilities are REQUIRED to buy the energy from individual investor owned solar farms, they will severely limit the implementation of massive solar. This is because they will slow, prevent, and negoiate downward the financial returns for these investments to levels that are undesireable for investors. The public needs to give a little on guraranteed solar energy costing to see massive imployment.

If the only source of payment is to the utility on all terms that they can decide, this is not good enough.

Provinces in Canada are now imploying a new FIT rate structure, and I believe that CO and other state PUC's will need to supply some help on this matter also.
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