UTILITIES GET COMFORTABLE WITH SUN

The discussion has moved on.

It used to be, “Solar energy is too expensive.” Not anymore. Everyone who is paying attention knows solar energy is already in the ballpark under certain circumstances and is on its way to grid parity in the next decade.

Now the questions have to do with what kinds of solar are best for what kinds of users and how solar can be most effectively incentivized and how it can best be integrated into the grid and how it can be stored.

Because Germany has jumped ahead of the U.S. in solar energy over the last 2 decades, U.S. utilities representatives took a Solar Electric Power Association (SEPA)-led tour of Germany to get some answers to the questions. The utilities' heightened interest is further proof that solar energy is coming of age.

Julia Hamm, the executive director, SEPA: "Half the utilities on the trip really had done nothing or little [solar installation]… It was a complete eye-opener for them."

Germany’s solar energy technology, led by Fraunhofer Institutes innovations, is the finest in the world. It has to be. Technological excellence must compensate for Germany’s at-best average insolation (solar radiation per surface area unit). Example: Germany’s rooftop solar photovoltaic (PV) system installation has been streamlined so that it is relatively simple and user-friendly.

Jim White, senior energy services engineer, a Washington state public utility: "It's plug-in and play, literally. You buy a solar panel and put it on your roof...drop down two wires and call the electric utility…It's an order of magnitude faster than where we are today."

The U.S. utility representatives were thoroughly briefed about the latest in German thinking on market incentives such as the Feed-in Tariff (FiT), a subsidy program to reward New Energy system owners for the electricity they generate. Although the U.S. originated the concept in the late 1970s, the FiT is not yet common here but the solar energy world and the utilities are vigorously discussing how to best make it work. (See SPANISH ADJUST INCENTIVES TO NEW REALITY)

The German New Energy incentives program (EEG) – until recently carrying the highest per kilowatt-hour rates in the world – is the most sophisticated yet developed in the use of degression rates and other incentive mechanisms. (For more info, see also Feed-In Tariffs – Boosting Energy for our future and FiTs/REPs in Europe: The Spanish Case)

The utilties’ interest is purely self-serving. They are moving into solar quickly, both with traditional distributed-generation PV systems and with solar power plant development. They are going to need all the good information they can get. (See UTILITY WILL SPEND $100 MIL ON SOLAR and UTILITY TO BUILD SMALL SOLAR IN LAND OF BIG SUN and JERSEY UTILITY TO FINANCE SOLAR)

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U.S. Utilities Advance Solar Projects
Ben Block, August 1, 2008 (Worldwatch Institute)

WHO
23 U.S. electric utilities (executives and managers); Solar Electric Power Association (SEPA) (Julia Hamm, executive director);

WHAT
A SEPA-led fact-finding trip to Germany by representatives of the 23 utilities produced new insights and a new attitude toward the potential of solar energy for U.S. electric markets.

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WHEN
The fact-finding trip was June 9 –13, 2008.
- 2007:
German new installed solar capacity – 1,300 megawatts
U.S. new installed solar capacity – 254 megawatts
- 2007:
German total installed solar capacity – 3,830 megawatts
U.S. total installed solar capacity – 750 megawatts

WHERE
Germany is a pioneer in incentive programs that spur New Energy development.

WHY
- Germany is the world’s leading producer and installer of PV cells
- Germany’s insolation (solar radiation per surface area unit) is, at best, average.
- Germany’s New Energy incentive programs are considered the gold standard.
- Among the utilities on the tour: (1) 2 of the largest - Southern Company and Duke Energy; (2) the 2 with the most solar – Southern California Edison and Pacific Gas & Electric (PG&E);

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QUOTES
- Julia Hamm, the executive director, SEPA: "Every single utility would decrease the time they said it would be before solar would be a significant part of their utility mix…"
- Roy Kuga, vice president, PG&E: "In a country where solar radiation is sub-par compared to many parts of the U.S., I have to hand it to the progressiveness and commitment [Germany] made to solar…Their technology advances will later help us… In the upcoming months, we should expect to hear more from PG&E activities in this area…"