On the verge of banishing the long, dark shadow of fossil fuels
The future of renewable energy sources has never been brighter. New developments in solar technology over the last three years have cut the cost of solar arrays by 20% per year, while at the same time oil and gas extraction costs continue to rise. Anyone investing in fossil fuels these days looks like a fool.
Solar electricity, unlike wind, is scalable in a good way. It works on projects both large and small. You can put a significant array of solar panels on just about any roof. Much of the reduction of the cost of solar electric arrays comes from the economies of scale in selling, permitting, financing and installation—what are called balance-of-system costs.
The distribution of economically viable solar locations is much wider than for wind. In Germany, a not particularly sun-blessed clime, 1.5 million installations are producing 6.9% of all electricity. Many homes are net positive, meaning they produce more electricity than they consume.
As with everything that affects the economy, solar electricity has become a political football. Hillary Clinton’s proposal to install 500 million solar panels in the United States before the end of her first term has been answered by $62 million in campaign contributions to Republican presidential candidates by billionaires connected to the fossil fuel industry. That’s about one out of every $8 donated to all presidential candidates so far in this campaign.
Jobs are a big factor in the discussion. The fossil fuel industry would have us believe that a job in a coalmine, that enslaves miners as well as customers, is the same as a job in the solar industry. In spite of what fossil fearmongers would have us believe, solar will provide more jobs than coal. This year, the number of jobs in the solar industry is predicted to surpass the number of jobs in the coal industry—and that’s just the beginning.
There aren’t any real obstacles to solar freedom but the fossil fuel industry can make things difficult. Locally, Rocky Mountain Power (RMP) is trying to burden the owners of solar systems with the costs of their antique electric distribution system. Last year a proposal to charge a net metering fee in the RMP service area in Utah was defeated.
But, as Utah Citizens Advocating Renewable Energy (UCARE), a grassroots organization made up of concerned Utah citizens who oppose Rocky Mountain Power’s intention to discourage private residential ownership of renewable energy sources, puts it, “We conclude that RMP’s true purpose is to protect their monopoly in electricity production, their investment in coal mining, and the happiness of the stockholders over fairness to their customers.”
Two deals that the Utah Governor’s Office of Planning and Budget recently announced point the way to a new energy paradigm. The tax incentive deals involve SolarCity and Vivint Solar, a division of SunEdison. The deals promise 7,143 new jobs over the next 10 years.
This deal has a good news/less good news aspect. The good news is that SolarCity and Vivint Solar are big players in the solar electric market and will have a large impact on the number of solar electric systems installed in the state. SolarCity is the top installer of solar electric systems in the U.S. with about 30% of the market. They offer a solar leasing plan that allows homeowners to enjoy the reduced cost of solar electricity without having to come up with the capital themselves. SolarCity is also in the business of providing charging stations for electric vehicles. VivintSolar is a Lehi company recently acquired by Solar Edison. They sell 20-year contracts door-to-door, locking in (for now) a lower rate for electricity than what Rocky Mountain Power charges.
The not-so-good news is that the growth in solar electric systems will eventually drive down the price of electricity, leaving homeowners who have signed 20-year contracts to pay more than market rates for the balance of their contracts. The plummeting cost of solar electric systems offers every homeowner the opportunity to be a micro-capitalist, rather than being beholden to someone who owns the panels on their roof.
Electricity is one of those commodities that has been immune from market forces. Scarcity and abundance, forces that shape other markets, don’t work with the “regulated monopoly” that is our electricity industry. Most residences have antique electricity meters that, like the gas gauge in our cars, tell us only how much we’ve used, not when. Industry and big users of electricity enjoy the advantages of getting electricity more cheaply at off-peak hours. Time-of-day rates are not available to small consumers of electricity because of the costs of time-of-day meters. Being able to track their electricity usage would allow residential consumers to take advantage of time-of-day rates by altering their electricity usage patterns to take advantage of lower, off-peak rates. On the supplier side it might encourage people to orient their systems towards the west, so that they would produce more electricity during the late afternoon consumption peak.
Electric cars aren’t poised to take off like rooftop solar, yet, but they are an important part of the mix. The key to getting the whole grid off the grid is convenient storage for the times the sun doesn’t shine – watching the late show and that early morning pot of coffee. The batteries of solar vehicles can be used to store electricity for those times. It will also be possible to use electric vehicle batteries as in-home electric storage when their storage capacity has declined to the point where they affect the performance of the vehicle and need to be replaced. Tesla Motors’ popular Powerwall is another solution, as well as increasing the size/scale of the large battery market.
Freeing the market for electricity is probably the most important piece of the puzzle. As the number of electricity producers multiplies and the fossil fuel industry loses its monopoly, those monopolies will fight to the death.
I have to wrap this column up so I can begin my annual pilgrimage to Burning Man. One of the main principles is radical self-reliance. For years, it has been my dream that everyone going to Burning Man unbolts a couple of solar panels from their roof and brings them out to Black Rock City to make it the first totally solar city in the solar system. The continued decline in the cost of solar electric systems makes that dream much more attainable.
John deJong is CATALYST’s associate publisher.