Category: Renewable energy

A Presidential Campaign Speech from 2052

(Note to my readers: please allow me this ‘indulgence’ as it allows me to discuss what I see coming in the energy field.)

My fellow Americans, I am pleased to announce today my candidacy for President of the United State. We have just turned the corner on the first half of the 21st century, a time of significant change for our country and many other countries. In 2052 it is time to consolidate and reaffirm those changes that are beneficial, and plan for the coming decades. The 21st century has been an American century, but not exclusively – other parts of the world have demonstrated global leadership both economically and politically in these past 50 years – and it is encumbent on a new set of U.S. leaders to continue the American century in peaceful and meaningful cooperation with our global partners. Before discussing my plans for the future I would like to review what I see as the history and the accomplishments of the century’s first fifty years.

The century began as an extension of the 20th century – multiple national conflicts, internal dissension in many countries, and heavy dependence on traditional fuels such as coal, oil and natural gas. Global population continued to increase – having grown from 1.8 billion to more than 6 billion in the past century – and is expected to reach as much as 10 billion sometime before the turn of the current century. That number in 2052 is just under eight billion.

Increasing electrification was an important characteristic of the 20th century and will continue to define the 21st century as well. It is allowing increasing numbers of people to enjoy the energy services that access to electricity and other forms of energy brings – lighting, heating, cooling, communication, transportation, and the ability to make things quickly and in quantity. Today, fewer than five percent of the world’s population lacks access to reliable electricity supplies, and this number should reach zero in the next two decades. Essentially all have access to wireless devices that allow widespread communication and access to the world’s store of information.

This access to energy, the closely related access to clean water, and wireless capability have significantly reduced global poverty and greatly enhanced opportunities for learning. The education revolution that has been made possible by universal access to the internet, for both women and men, and the individualized learning that the computer revolution has made possible, together with energy access, has finally allowed a slowdown in the rate of population growth so that a stabilized global population may be achievable in my lifetime.

This century has also seen other powerful changes. In 2008 our country elected its first black President, and then reelected him in 2012 as affirmation of their good judgement four years before. In 2016 the U.S., after a lengthy and often nasty presidential campaign, elected its first female president, who once and for all showed that women can serve effectively at the highest levels of our political life. Together with the military opening all its ranks to female participation in 2015, the so-called ‘glass ceiling’ was finally shattered, never to be restored. That election also saw the election of a Vice President of Hispanic ethnicity, who eventually went on to become the 47th President of the United States. Today I am trying to shatter still another political barrier by attempting to become the first Muslim American to receive the nomination for President of a major political party.

While much has changed in the past five decades, and I will discuss one of the most important changes in detail shortly, not everything has changed, unfortunately. We are still human beings, with all our many shortcomings, and religious and racial intolerance are still major sources of pain and conflict in the modern world. While the threat of Islamic jihadism that arose forcefully in the first few decades of the century has been reduced significantly through the actions of a global coalition of Muslim and non-Muslim governments, remnants are still with us and require careful attention. As our President I would commit all the resources needed, in cooperation with our allies, to keep this threat under control. A major factor in controlling this threat has been the willingness of Sunni and Shiite governments to put aside their religious differences In the name of their overriding commonality, Islam.

Among the other changes we have seen in our lifetime is the establishment of the first human colonies on the moon and on Mars. The moon colony was a joint U.S.-Chinese achievement in 2032, just twenty years ago, and the first Mars colony of four people was established just 8 years ago, in 2044. Both were extraordinary events at the time, and commanded global attention, but as is true of so many achievements in outer space the existence of the colonies is becoming part of the background. That is an OK result as we want space travel to become a routine part of the mainstream.

Other major steps forward have been in the field of medicine. With advances in DNA measurement and manipulation personalized treatment has become routine for many gene-related diseases. It is not unusual today to see people living into their second centuries and still functioning normally. Of course the social security and related safety-net systems in the U.S. have had to be adjusted for this new longevity, and as you might expect, only after long and difficult political battles.

Finally, let me talk in some detail about the most important revolution of the 21st century, one I have worked hard to support in my current position as a U.S. Senator. It is one that I am committed to support and advance if I am privileged to serve as your President. That is the energy revolution that started in the latter part of the 20th century, took flight during the early decades of the 21st, and is today reaching all parts of the globe. It is a transition point in human history.

The 1973-74 Oil Embargo, which took place almost a century ago, was a brutal wake up call for many nations, including our own. The history books tell many stories about how Americans, for the first time, began to look at energy issues in a different light. Prior to the Embargo energy costs were sufficiently low that it was not an area of public concern. Then, one day Americans awakened to the fact that much of their energy, especially for transportation, was imported from abroad, and that such supplies were subject to political uncertainties beyond our control. This was true in the countries of Western Europe as well. We responded by creating the International Energy Agency, a mechanism for sharing oil reserves among countries if another embargo threatened our energy supplies. We also started looking at energy alternatives, with particular emphasis on nuclear power. In fact the public mantra at that time by our political leaders was a doubling every decade of the number of nuclear power plants deployed in the U.S. A few others raised concerns about nuclear power and called for examination of enhanced energy efficiency and renewable energy alternatives. Until that time renewable energy had not been seriously considered except in the case of hydroelectricity. The suggestion related to enhanced energy efficiency was dismissed by economists and others who saw economic growth (GDP) tied one-to-one with energy consumption, and renewables were attacked as too expensive and incapable of meeting the demands of the U.S. economy. These arguments persisted for several decades until it was shown that GDP and energy consumption were not directly linked, climate change associated with combustion of fossil fuels became a major global issue, the costs of renewable energy systems began to decrease, and the ability of renewable energy in the form of electricity, biofuels, and heat were shown capable of supporting large economies. These new realities became the focus of policy debates in the first two decades of the century, and finally came to govern U.S. energy policy in the third decade when the majority of the private sector finally put its full support behind renewables and the battle to limit global warming. All Presidents since the Obama era have supported a move away from dependence on fossil fuels – it was 80% at the turn of the century – and Congress finally placed a steadily increasing cost on carbon emissions in 2020. This created the economic environment needed for investment in clean energy technologies and reduced use of fossil fuels. It allowed the U.S. to finally catch up with the many other countries that had seen the importance of these changes and implemented appropriate policies many years before.

These changes have led to today’s energy situation in the U.S. – 70% of electricity is generated by solar, wind, hydropower, and geothermal, natural gas from fracking peaked in 2040 and is steadily being replaced as an energy source in power plants as renewables take over, petroleum from fracking of oil shale peaked at about the same time and has been used to power aging and disappearing transportation fleets, electric vehicles dominate the automobile and light duty truck markets, all new aircraft and ships are designed to run on alternative biofuels, energy efficiency has been enshrined as the cornerstone of national energy policy, coal has been replaced as a domestic energy source except in a few industries, and nuclear power’s share of electricity generation has been steadily reduced to its current value of 5%. Total national energy demand has been stable even as the U.S. population has increased to 400 million, all new homes are routinely outfitted with solar energy rooftop systems and ground source heart pumps wherever feasible, the U.S. leads the world in wind turbine and wind energy production, we are second only to China in offshore wind energy deployment and production, and battery energy storage has become as ubiquitous as any other household appliance.

The world has turned a corner in these pat 50 years, undergoing an inevitable transition to dependence on energy from the sun and heat derived from radioactive decay in the core of the earth. These clean energy sources will last as long as people populate the earth, unlike fossil fuels which are depletable on any timescale relevant to humankind. We owe much to our fossil fuel resources, the product of millions of years of transformation of organic materials subject to high temperatures and extreme pressures deep in the earth, but the fossil fuel era is coming to an end and will eventually be only a blip on the timeline of history.

My promise to you as your President will be to continue and strengthen this transition in all ways possible so that our children, grandchildren, and their heirs, will live in a world free of global warming and the other harmful impacts of burning fossil fuels. Nuclear fission power had its day as well, but the issues associated with its use – cost, safety, long term storage of wastes, and weapons proliferation – have proved too difficult to accept now that renewable energy has been shown up to the task of meeting societal needs. Nuclear fusion, a much cleaner form of nuclear energy, remains as a long term possibility as well, but progress in taming the process that powers our sun and other stars has been slow and time will tell if controlled nuclear fusion has a future here on earth. I support continued cooperation with other countries in researching this technology that offers unlimited energy availability but so far has always been a few years away. Our investments largely must go into renewable technologies to ensure completion of the transition. This is our legacy to the future.

The Coal Conundrum

A long article in the October 16th Washington Post, ‘U.S. exports emissions – as coal’ by Joby Warrick, points out the conundrum posed by the U.S.’s abundant coal resources. These coal reserves provide a relatively low cost energy resource that can be burned to produce steam and electricity and improve human welfare in both the U.S. and other countries. However, its combustion produces large amounts of carbon dioxide that when added to the atmosphere causes global warming and associated global climate change. The conundrum arises from a clear conflict of values – the need to provide energy services to people around the world, in particular people in developing countries whose per capita consumption of electricity is well below that of developed countries, and the need to address climate change with its many adverse consequences, identified by many as the most serious problem facing the globe. No easy answer exists to satisfy those on both sides of this conundrum.

Several statements in Warrick’s well-researched article captured my attention, including: “Just a dozen nearby mines, scattered across a valley known as the Powder River Basin (Wyoming), contain enough coal to meet the country’s electricity needs for decades. But burning all of it would release more than 450 billion tons of carbon dioxide into the atmosphere – more than all greenhouse-gas emissions from all sources since 2000.” and “The Obama Administration is seeking to curb the United States’ appetite for the basin’s coal, which scientists say must remain mostly in the ground to prevent a disastrous warming of the planet. Yet each year, nearly half a billion tons of this U.S.-owned fuel are hauled from the region’s vast strip mines and millions of tons are shipped overseas for other countries to burn.”

Given the legitimate needs on both sides of this conundrum I can see only one path to follow to bring the benefits of electricity to as many people as possible while minimizing the risks associated with burning coal. This is to promote the use of energy efficiency technologies wherever feasible, to reduce the demand for coal-based electricity, and expedite the development and deployment of renewable electric technologies such as solar and wind as substitutes for coal. This is already happening to some extent as the world slowly begins to come to grips with the climate change problem, but the pace needs to and can be accelerated. The ability of renewables to meet most of the world’s electricity needs has been documented in several recent studies, e.g., the June 2012 NREL report entitled ‘Renewable Electricity Futures Study’, and what is now needed is a commitment on the part of national governments and international institutions to make it happen as quickly as possible. It is a matter not of technology but of political will and financial resources. Admittedly, such a switch from coal and other fossil fuels (natural gas, oil) that also produce carbon dioxide when combusted, to a renewables-based energy economy, will take time, lots af planning, and lots of money. However, when the full costs of using fossil fuels are taken into consideration, including not just market costs but also health and climate change-related costs (such as coastline flooding due to rising seas, changed precipition patterns that adversely impact water availability and agricultural production), and international tensions due to competition for fossil fuel resources, renewables become a much more attractive and even less expensive long-term option. Renewable resources are also insensitive to cost increases once initial capital investments are made, unlike fossil fuels that rely on a depletable resource that produces uncertain and often volatile costs.

Nuclear power advocates will make some of the same arguments since the process of releasing energy via nuclear fission does not produce greenhouse gases, but nuclear technology faces four serious problems: high cost, safety, the need for long-term radioactive waste storage, and proliferation of weapons capability. If these problems can be successfully addressed, then nuclear-powered electricity can be a viable option for the future. Nuclear power also offers the tantalizing option of nuclear fusion, a relatively safer and cleaner nuclear technology with enormous resource potential, but the problem of achieving controlled nuclear fusion on earth (it is the process that powers our sun) is proving to be the most difficult technological challenge the world has faced to date. It can legitimately be labeled ‘the technology that is always a few years away.’

In sum, the choice is ours – we can continue to use our coal resources without limit or we can move more quickly to a clean energy society that provides needed energy services and minimizes global warming and climate change effects. I vote for the latter.

It is Time to Take the Next Step on Energy Policy

The following piece was first published on energypost.eu and the text is reprinted here as a new blog post.
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US desperately needs a national energy policy
September 24, 2015 by Allan Hoffman

The US – and indeed the world – is at a crossroads when it comes to the choice on how we want to provide energy services in the future, writes US energy expert Allan Hoffman. According to Hoffman, the US desperately needs a national energy policy that recognizes the importance of moving to a renewable energy future as quickly as possible. Without such a policy, economic growth, the environment and national security will suffer.

There are two fundamental ‘things’ needed to sustain human life, water and energy. Water is the more precious of the two as reflected in the Arab saying “Water is life.” Without water life as we know it would not exist, and there are no substitutes for water – without it we die.

We also need energy to power our bodies, derived from chemical conversions of the food we consume. We also need energy to enable the external energy services we rely on in daily life – lighting, heating, cooling, transportation, clean water, communications, entertainment, and commercial and industrial activities. Where energy differs from water as a critical element of sustainable development is the fact that energy is available in many different forms for human use – e.g., by combustion of fossil fuels, nuclear power, and various forms of renewable energy.

Critical juncture

Today the U.S., and indeed the world, stands at a critical juncture on how to provide these energy services in the future. Historically, energy has been provided to some extent by human power, by animal power, and the burning of wood to create heat and light. Wind energy was also used for several centuries to power ships and land-based windmills that provided mechanical energy for water-pumping and threshing. With the discovery and development of large energy resources in the form of stored chemical energy in hydrocarbons such as coal, petroleum, and natural gas, the world turned to the combustion of these fuels to release large amounts of thermal energy and eventually electricity with the development of steam power generators. Nuclear power was introduced in the period following World War II as a new source of heat for producing steam and powering electricity generators and ships.

My recommendation is to put a long-term and steadily increasing price on carbon emissions to motivate appropriate private sector decisions to use fewer fossil fuels and more renewable energy and let the markets work

Renewable energy, energy that is derived directly or indirectly from the sun’s energy intercepted by the earth (except for geothermal energy that is derived from radioactive decay in the earth’s core), has been available for a while in the form of hydropower, originally in the form of run-of-the-river water wheels, and since the 20th century in the form of large hydroelectric dams. Other forms of renewable energy have emerged recently as important options for the future, driven by steadily reducing costs, the realization that fossil fuels, while currently available in large quantity but eventually depletable, put carbon dioxide into the atmosphere when combusted, contributing to global warming and associated climate change. Renewable energy technologies, except for biomass conversion or combustion, puts no carbon into the atmosphere, but even in the biomass case it is a no-net-carbon situation since carbon is absorbed in the growing of biomass materials such as wood and other crops.

Support for renewables is also driven by increasing awareness that while nuclear power generation does not put carbon into the atmosphere it does create multigenerational radioactive waste disposal problems, can be expensive, raises low probability but high consequence safety issues, and is a step on the road to proliferation of nuclear weapons capability. Another driver is the now well documented and growing understanding that renewable energy, in its many forms, can provide the bulk of our electrical energy needs, as long disputed by competing energy sources.

Clean future

All these introductory comments are leading to a discussion of the energy policy choice facing our country, and other countries, and my recommendations for that policy. This choice has been avoided by the U.S. Congress in recent years, much to the short-term and long-term detriment of the U.S. We desperately need a national energy policy that recognizes the importance of energy efficiency and moving to a renewable energy future as quickly as possible. That policy should be one that creates the needed environment for investment in renewable technologies and one that will allow the U.S. to be a major economic player in the world’s inevitable march to a clean energy future.

Before getting into policy specifics, let me add just a few more words on renewable energy technologies. Hydropower is well known as the conversion of the kinetic energy of moving water into electrical energy via turbine generators. Solar energy is the direct conversion of solar radiation directly into electricity via photovoltaic (solar) cells or the use of focused/concentrated solar energy to produce heat and then steam and electricity. Wind energy, an indirect form of solar energy due to uneven heating of the earth’s surface, converts the kinetic energy of the wind into mechanical energy and electricity. Geothermal energy uses the heat of the earth to heat water into steam and electricity, or to heat homes and other spaces directly. Biomass energy uses the chemical energy captured in growing organic material either directly via combustion or in conversion to other fuel sources such as biofuels. Ocean energy uses the kinetic energy in waves and ocean currents, and the thermal energy in heated ocean areas, to create other sources of mechanical and electrical energy. All in all, a rich menu of energy options that we are finally exploring in depth.

Controversial

Energy policy is a complicated and controversial field, reflecting many different national, global, and vested interests. Today’s world is largely powered by fossil fuels and is likely to be so powered for several decades into the future until renewable energy is brought more fully into the mainstream. Unnfortunately this takes time as history teaches, and the needs of developing and developed nations (e.g., in transportation) need to be addressed during the period in which the transition takes place.

The critical need is to move through this transition as quickly as possible. Without clear national energy policies that recognize the need to move away from a fossil fuel-based energy system, and to a low-carbon clean energy future, as quickly as possible, this inevitable transition will be stretched out unnecessarily, with adverse environmental, job-creation, and other economic and national security impacts.

My recommendation is to put a long-term and steadily increasing price on carbon emissions to motivate appropriate private sector decisions to use fewer fossil fuels and more renewable energy and let the markets work. Nuclear power, another low-carbon technology, remains an option as long as the problems listed earlier can be addressed adequately. My personal view is that renewables are a much better answer.

The revenues generated by such a ‘tax’ can be used to reduce social inequities introduced by such a tax, lower other taxes, and enable investments consistent with long-term national needs. In the U.S. it also provides a means for cooperation between Republicans and Democrats, something we have not seen for several decades. It is clear that President Obama ‘gets it’. It is now more than time for U.S. legislators to get it as well.

Editor’s Note (Karel Beckman, energypost.eu)

Allan Hoffman, former Senior Analyst in the Office of Energy Efficiency and Renewable Energy at the U.S. Department of Energy (DOE), writes a regular blog: Thoughts of a Lapsed Physicist.

On Energy Post, we regularly publish posts from Allan’s blog,in his blog section Policy & Technology. His writings often deal with issues at the intersection of energy technology, policy and markets. Allan, who holds a Ph.D. in physics from Brown University, served as Staff Scientist with the U.S. Senate Committee on Commerce, Science, and Transportation, and in a variety of senior management positions at the U.S. National Academies of Sciences and the DOE. He is a Fellow of the American Physical Society and the American Association for the Advancement of Science.

Returning to an Important Subject: the Vulnerability of the U.S. Electrical Grid

I’ve just had an amazing experience – I listened for about an hour to an online advertisement for an investment newsletter. You may reasonably ask why would any compos mentis individual devote an hour of their life to an advertisement for a service that he was unlikely to sign up for? My answer is simple – the ad addresses an important issue that I have touched upon in earlier blog posts, and in accurate terms once you sift the wheat from the chaff of a much too long presentation. It also presents a worst case scenario to get your attention, a common advertising technique, but it also presents information on what I consider a significant national security risk – the vulnerability of our national electrical grid system to natural or malevolent events. The ad, in its infuriating stretched-out discussion, addresses this vulnerability from four sources – sabotage, solar flares, cyber attacks, and military attacks. The ad’s discussion includes references to federal government and NARUC (National Aassociation of Regulatory Utility Commissioners) reports that address Black Sky Day possibilities and which are easily accessed. Black Sky Days are defined as “extraordinary and hazardous catastrophes utterly unlike the blue sky days during which utilities usually operate.”

My concern about the grid vulnerability issue goes back about thirty years and has only grown with time. I truly believe we are a highly vulnerable society and are not yet paying enough attention to our vulnerabilities. I hope I am wrong.

In any event, I present the link to the ad below (I wish it had an Executive Summary) and to my two previous blog posts that discuss the vulnerability issue. We need more attention to these perhaps unlikely events but ones with potentially massive consequences.

1. The Black Sky Days Event Is “Imminent” – The Oxford Club
http://pro.oxfordclub.com/DDSKY3959PESDBNETTTSOXFJVIUPS4/PORER800/?h=true

2. The Vulnerability of Our Electric Utility System to Cyber Attacks

The Vulnerability of Our Electric Utility System to Cyber Attacks

3. Vulnerabilities of U.S. Infrastructure: We Need To Pay More Attention

Vulnerabilities of U.S. Infrastructure: We Need To Pay More Attention

Investing In Solar Energy: If Only I Was Younger

As I write this early in my 79th year I am aware not only of my mortality (although I don’t spend much time on that except for getting my bucket list and will in order) but also of the investment opportunity that is coming and that I can’t really take advantage of. It’s long term, longer than I likely have.

It is the realization that the solar revolution is finally unfolding and that we are in the early stages of a sea change that will change the energy picture in major ways for our children and grandchildren over the next few decades of the 21st century. It is an exciting time to be alive, with all the changes coming, but the transition will take time as history teaches. There will also be ups and downs along the way – e.g., the fact that some governments in Europe recently and retroactively cut subsidies and Introduced import tariffs on low cost Chinese solar panels. But the long-term trend is clear.

I say this after forty plus years in the clean energy field, going back to 1969, and being overwhelmed recently by the burgeoning literature on solar and other renewables that appears on my iPad every day – e.g., the following interesting and encoraging piece on ‘community solar’ that appeared recently in the journal Energy and Environment :

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“There’s a tense dynamic accompanying the rapid growth of solar in the United States—in which traditional utility companies, nervous about the spread of rooftop solar panels, are seeking ways to limit the revenues made by solar customers who earn credit for the extra electricity they provide to the grid.

This battle over so-called “net metering” has been often depicted as a zero sum conflict between an upstart and an incumbent — but new research out of the University of Texas at Austin suggests there could be a kind of “middle ground” in the conflict between some utilities and solar installers.

The potential “win-win,” as the researchers put it, involves so-called community solar — solar energy projects or panels that are in effect shared by a group of people, such as the inhabitants of an apartment building, rather than sitting on a single residential rooftop. The study, recently published in Energy Research & Social Science and led by Erik Funkhouser of the LBJ School of Public Affairs at the University of Texas at Austin and three university colleagues, found that at least some utility companies seem to like community solar programs, are already offering them, and plan to expand them.

One key reason? Customers clearly want access to solar, and some utility industry representatives find community solar to be a great way to give it to them — in a manner that allows the utility to continue to service these customers’ full electricity demand, that is.

“If you are a utility that is concerned with the rapid growth of residential solar — which means that a lot of the demand is moving away from your direct control — in that case you can imagine developing a competitive community solar program that is priced around what a residential system or residential lease might look like, and you might actually price it lower,” says Varun Rai, a professor of mechanical engineering at the University of Texas, Austin and one of the authors of the study.

The research also suggests yet another way — beyond getting directly into the business of installing rooftop solar, as Southern Company subsidiary Georgia Power is now doing — that traditional power companies seem to be finding their way into the hot solar market.

Community solar has certainly been getting a lot of attention lately — largely because of its vast potential to expand solar access.

Last month, the Obama administration announced an array of new initiatives to broaden access to solar energy to more Americans — since so far, solar has generally been the province of relatively wealthy homeowners. Solar City, the top U.S. solar installer, recently announced a massive project to install some 100 “solar gardens” in the Minneapolis-St. Paul area, with a particular focus on allowing renters to participate in solar energy. And GTM Research, which studies the clean energy industry, projects that community solar will be “the most significant solar growth market for the United States.”

[Many Americans still lack access to solar energy. Here’s how Obama plans to change that]

The new study adds to the theme, reporting on the results of seven utility industry interviews about community solar, as well as the responses to 57 surveys on the subject distributed to investor owned utilities, municipal utilities, and rural electric cooperatives. The researchers also analyzed 61 community solar projects. And they concluded that community solar has the potential for “stabilizing the customer-utility relationship with deeper solar penetration.”

In effect, this is happening because some utilities seem to realize that they’ve got to get involved in the solar wave, the sooner the better. Or as the study put it:

One utility reported that, even without significant penetration of residential solar PV in its territory, staving off potential attrition of its customer base partly drove its adoption of a [community solar] program. Another utility, a large [investor-owned utility], reported that it was motivated to pursue [community solar] for the same reason. The organization anticipates increases in the popularity of solar [distributed generation] going forward. By investing in [community solar] it hopes to satisfy customer demand for solar [distributed generation] as cost-effectively as possible.

The state of California has even mandated that its three main utilities — Pacific Gas and Electric, Southern California Edison, and San Diego Gas & Electric — begin to offer community solar programs, and on a large scale. The utilities are slated to set up 600 megawatts of community solar capacity by 2019.

PG&E’s community solar program, for instance, will allow customers to sign up to get either half or all of their electricity from solar projects that PG&E will “contract with,” or separately make an agreement with an outside solar installer to purchase some of that installer’s electricity gene
ation. Either way, the customers get billing credit from PG&E for not needing to use as much traditional electricity any longer. Initially there will be a premium to be in the program, but PG&E says that will “likely diminish over time if PG&E’s overall generation costs increase and solar costs fall.”

Other community solar programs offered by utilities include the Bright Tucson Community Solar program, offered by Tucson Electric Power, and the Sacramento Municipal Utility District’s SolarShares program.

Granted, for now only a relatively “small fraction” of utilities appear to be moving into the community solar space, according to lead study author Erik Funkhouser. And of course, not all community solar programs are offered by utilities. A group of individuals might start one of their own, of their own volition. A project might also be carried out on a nonprofit basis.

One major difference, notes Rai, is that when individuals set up a community solar program, they often do so with so-called “virtual net metering,” which allows participants in the program to get credit for the electricity generated and thereby reduce their electricity bills, in much the same way that residential solar owners do under current net metering schemes. The only difference is that they don’t actually own the equipment or have it on their own roofs — rather, their credit is divided up virtually among participants in the community solar program.

Rai thinks utilities won’t go for this arrangement, for the same reason that they’ve been so resistant to net metering in general. “For all practical purposes, the only difference between virtual net metering and net metering is, you don’t have the system on your roof,” he says. “But for the utility, you are exactly the same on your bill.”

The power company is still losing out on a portion of the individual’s electricity demand in this case — what has been termed “load defection” — so Rai thinks that utilities will try to offer community solar customers cost savings in a different way: through economies of scale. As prices for solar get lower and lower, community solar plans offered by utilities might simply become a good deal. “It just comes down to what the rate plan is,” Rai says. “If you give me a solar plan that has a benefit, then sure.”

Whether those in the solar camp will agree this is a “win-win” is not so clear, of course — virtual net metering could be the new sticking point.

So in sum, it’s far too early to know yet how this is going to play out — but it’s just another sign that we can expect major dynamism in the solar space, not only due to growth overall but as incumbent utilities try to compete with the upstart solar industry. For now, utility-offered community solar is just the latest indication of that.

“It’s a very early phase of a very interesting business model,” says Rai.”
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I could list many other articles that lead to the same conclusion, that some U.S. utilities have finally begun to come to grips with the reality that renewable energy (not just solar but also hydropower, wind, geothermal, biomass, ocean energy), when combined with a smart national grid and cost-effective energy storage, can eventually provide the vast majority of our electrical energy needs, including the anticipated demand growth from electrified transportation vehicles. Utitilities in Germany came to this conclusion earlier, largely due to Germany’s energy policy that encouraged installation of wind, solar, and other renewable energy technologies through provision of so-called feed-in tariffs (FiTs). FiTs is a policy mechanism that provides an extra fee (tariff) above the retail rate of electricity to provide long-term security to renewable energy producers, typically based on the cost of generation of each technology.

At this point in time solar energy is the fastest growing energy source in the world today, having recently passed wind energy for this distinction. Of course solar starts from a small base and has a long way to go to provide a significant share of the world’s electrical energy. Nevertheless, when one looks at recent trends in various countries such as the UK, China, India, Australia, and others, let alone the U.S., it is clear that large parts of the world have accepted the inevitability of a renewable energy future, with a large part of that future being based on solar energy. In addition, African nations are beginning to expand their economies and take advantage of their extensive renewable energy resources, particularly solar, and the related investment opportunities are huge.

All this leads me to believe that the transition to renewables is well underway and offers not only investment opportunities for those with insight and patience, but also a response to the challenge presented by global climate change. With care being paid to where the investments are made, the financial returns should be quite impressive in the decades ahead. If only I were younger.