Within a decade, more than 35 million buildings may be
generating their own solar electricity (without subsidies) at prices
lower than their utility offers, sufficient to power almost 10% of the
country.
That’s the powerful headline from the Institute for Local
Self-Reliance’s latest report, Commercial Rooftop Revolution. Despite
the opportunity, utilities, regulators, and policy makers are largely
unprepared for the surge of local solar power.
In Minnesota, for example, the state’s largest utility
expects just 20 megawatts of new solar power in the next 13 years,
according to its draft filing with the Public Utility Commission. But
within 10 years, according to the report, unsubsidized solar electricity
will be so inexpensive that 200 times more solar (over 4,000 megawatts)
could be installed on the rooftops of Minnesota homes and businesses,
providing lower cost electricity than from the utility.
That’s just one wake up call, among many, in Commercial
Rooftop Revolution. A solar revolution that has been largely confined
to states with generous sunshine (California) or high electricity prices
(New Jersey) or both (Hawaii) will spread rapidly in the coming years.
Utilities in unexpected states like Tennessee, Wisconsin, and Nebraska
will face enormous competition from inexpensive rooftop solar power by
2022.
Many utilities and state regulatory commissions are
finding the value in solar and realizing that perceived barriers aren’t
as large as they had feared. Austin Energy, a Texas municipal utility,
now pays a non-subsidy premium for solar because it helps them offset
expensive peak power purchases. In Hawaii, regulators have amended
archaic limits to match renewable technology. California grid
legislators increased the amount of solar allowed to use net metering to
offset on-site electricity use. And Colorado and Vermont have capped
costs and streamlined solar permitting.
With a solar market driven by cheaper-than-electricity
prices, Hawaii’s electricity system may hint at the forthcoming paradigm
change. One of the state’s public utility commissioners notes that
utilities need to transition from being grid dominators to facilitators,
from being inflexible to being flexible. They will need to switch from
a reliance on utility-controlled, large, centralized coal and nuclear
power plants to a nimble mix of flexible energy sources like energy
storage, demand response, or natural gas. Already, the state is one of
14 states with local or state-based CLEAN Contract (a.k.a. feed-in
tariff) policies that dramatically simplify the process of going solar
for residential and other electric customers.
With the cost of solar falling rapidly and local solar
challenging utility prices nationwide, ILSR’s report suggests that
utilities will need to accommodate a grassroots movement toward local,
affordable energy generation.
There will be more change in the next 10 years than utilities have faced in the last 100. And they had best get ready.
See a summary of the report in the slides below:
http://www.renewableenergyworld.com/rea/blog/post/2013/01/is-your-utility-ready-new-report-says-local-solar-could-power-10-of-country-in-10-years
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