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SolarCity CEO Lyndon Rive Sees Fossil Fuels Becoming the “Alternative” Source of Energy

Posted By Lowell F. on April 20th, 2015

We wrote recently about new polling, produced for Clean Edge and SolarCity, that found enormous support among Americans for clean energy.  For instance, by a nearly unanimous 87%-7% margin, Americans said that renewable energy is important to America’s future. Also, by a 74%-12% margin, U.S. homeowners “back the continuation of federal tax incentives that support the growth of solar and wind.” Americans strongly oppose, by a 61%-24% margin, efforts by electric utilities aimed at “being able to charge an additional fee for solar powered homes and businesses.” Finally, asked which energy sources they view as “most important to America’s energy future,” solar power came out on top (50% of homeowners agreed), with wind power second (42%), and energy efficiency (25) also in the top four. In contrast, fossil fuels like coal (8%) and oil (17%) scored near the bottom.

Today, Clean Edge and SolarCity held a webinar on these poll results, with some fascinating insights provided by Lyndon Rive of SolarCity, Ron Pernick of Clean Edge, and pollster John Zogby.  A few that jumped out at us include the following.

  • Lyndon Rive of SolarCity notes that while in 2009, only 2% of new power capacity installed in the U.S. was solar, during the first three quarters of 2014, that share reached a whopping 35%. In Rive’s view, solar’s share of new installed capacity in the U.S. could hit 50% over the next five years.
  • John Zogby said that solar and wind have moved beyond being “esoteric” to being real and visible. Zogby noted that when a homeowner sees solar being installed on a neighbor’s home, it becomes more real and more accessible.
  • Zogby also argued that non-renewable energy sources have undergone the “exact opposite of a renaissance” in recent years, in part due to their perceived economic and geopolitical volatility.
  • Rive argued that, despite a perception of a partisan divide on solar power, that actually solar has “total bipartisan support.” In fact, Rive noted, if you go back to the beginning of the solar tax credit, it was led by Republican Senators, and was extended for eight years by a Republican president.  It’s unfortunate, in Rive’s view, that the “Solyndra blowup” turned solar into a “Democratic political football,” as “in reality it’s supported by both parties.”
  • Rive made an interesting point about how the drought in the West could drive more clean energy, as solar power uses no water at all. In stark contrast, Rive explained, the amount of water used by fossil fuel-generated power plants is enormous, while if a homeowner were to install solar power, “the net effect of that is better than using no water at all.”
  • With regard to political opposition at the federal and state levels to clean energy scaling, Rive argued that when you have a technology source go from 2% to 35% of new power capacity in just a few years, it’s very threatening to incumbent energy sources. In response, those incumbents are “leveraging all their political muscle” to persuade politicians to slow down the growth of clean energy.
  • Even with that incumbent, fossil-fuel-industry opposition, Rive said that the attitude in Congress towards extension of the ITC has gone from “no way in hell” to “how do we make this work…get it extended” in just the last year or so. Rive also noted that in the U.S., the fossil fuel industry has over 13 permanent tax credits, and in general is highly subsidized.
  • Rive recommended fighting back by educating customers to fight for their right to energy competition.  Beyond that, though Rive argued that the solar industry needs to work with utilities to resolve the “natural friction” between the two industries, to make it possible for utilities to make money off the solar sector, in part by changing the utility business model to one where it becomes the manager of the “flow of energy” from “everywhere.”
  • Finally, Rive commented that microgrids are growing, particularly in islands and small communities, to the point where fossil fuels are becoming the “alternative source” of energy, not solar.  Rive said he sees that paradigm playing out in the future.
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Recent Polling Shows Overwhelming Support for Clean Energy

Posted By Lowell F. on April 9th, 2015

We’ve known for a long time that Americans strongly support clean energy, but every so often it’s good to see brand-new polling that reaffirms this finding. Two recent polls in particular jumped out at us, one produced for Clean Edge and SolarCity, the other by Gallup. Here are a few key findings.

  • According to the Clean Edge/SolarCity polling, Americans by a 61%-24% margin are opposed to electric utilities “being able to charge an additional fee for solar powered homes and businesses.”
  • By an enormous 78%-9% margin, Americans believe it is important for the U.S. “to be a global leader in developing and deploying solar energy systems.” And by a nearly unanimous 87%-7% margin, Americans said that renewable energy is important to America’s future.
  • By a 74%-12% margin, U.S. homeowners “back the continuation of federal tax incentives that support the growth of solar and wind.”
  • The Clean Edge/SolarCity polling finds that support for natural gas declines with age: 43% of those over 70, compared to just 33% of those between 35 and 54, and just 27% of those in the 18-24 age range.
  • Asked which energy sources people think are “most important to America’s energy future,” solar power came out on top (50% of homeowners agreed), with wind power second (42%), and energy efficiency (25) also in the top four.  Near the bottom of the list, in constrast were coal (8%) and oil (17%).
  • Gallup’s polling also found overwhelming support for clean energy, with Americans wanting more emphasis on solar power (79%-9%) and wind power (70%-14%). That support is across the political spectrum, by the way, with Republicans wanting more emphasis on solar power (70%) and wind (63%).
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Edison Electric Institute’s Hypocrisy on Solar Power Knows No Bounds

Posted By Lowell F. on March 10th, 2015

Even by fossil fuel industry standards, the hypocrisy of groups like the Edison Electric Institute (EEI) talking up solar power and benefiting from it, while simultaneously working to prevent regular people from also benefiting from it, is truly breathtaking. A few points from the recent Washington Post scoop, “Utilities wage campaign against rooftop solar,” and a follow-up analysis on Utility Dive, highlights what we’re talking about.

  • The utility industry has been waging a war on rooftop solar,” with the Post citing “documents from a 2012 Edison Electric Institute (EEI) board meeting that identified distributed generation as a potential thread to grid reliability and the utility business model” and urging the utility industry to “prepare an action plan to address the challenges.”
  • The Post article specifically cites this presentation, by EEI Executive Vice President David K. Owens, entitled “Facing The Challenges of a Distribution System In Transition,” in which Owens lays out the “Challenges and Obstacles for Fairness.” Those include what Owens (misguidingly) calls “hidden subsidies like net metering,” which he (erroneously) claims “allow higher income customers to avoid system costs, which are then paid by middle and low income customers.” Owens further (falsely) claims that “under net metering, such [distributed generation] projects pay little distribution or other fixed costs, despite the fact that they impose new costs on the system.”
  • After all this bashing of net metering and other policies — feed-in tariffs, RPS requirements, “zero net energy goals and targest,” microgrids — Owens then attempts to claim, laughably, that “we do support the desire of our customers to adopt distributed energy resources.” The Washington Post article further quotes Owens’ claiming, again laughably, that EEI is actually “pro-solar” and that utilities “are putting in more solar than any other industry.
  • A recent article on The Energy Collective basically demolishes Owens’ negative talking points about net metering supposedly allowing “higher income customers to avoid system costs, which are then paid by middle and low income customers,” as well as his false claims that net metering means that distributed energy “projects pay little distribution or other fixed costs, despite the fact that they impose new costs on the system.”

This one’s worth quoting at length.

Enter the “solar hurts low income people” argument, which claims that low-income people are paying higher bills to subsidize solar power they can’t afford, and thus advocates and lawmakers should oppose it. This argument is misguided, ignores critical information, and often emanates from industry groups trying to turn low-income communities against clean energy.

…To forge fair, lasting solutions, we need real, unbiased data and analysis on the costs of solar to customers and the grid, some of which already exists:

  • Fact: a study commissioned by the California Public Utilities Commission found that solar customers on average cover their full costs to the electric grid;
  • Fact: a study by the Nevada Public Utilities Commission and a study from the Mississippi Public Service Commission found that solar customers provide a net benefit to all ratepayers;
  • Fact: an analysis from Deutsche Bank finds that rooftop solar will be as cheap as traditional power by 2016 in all 50 states (this is already happening in 11 states); and
  • Fact: an analysis from the Lawrence Berkeley National Laboratory (LBNL) found that even the most aggressive net-metering solar programs would have minimal (0.1-2.7 percent) impact on electricity rates.

So, why would some industry groups want to slow the growth of local solar? (Spoiler alert: it’s about THE MONEY!) The LBNL study found that local solar will have significant impacts on utility shareholder profits – up to a 40 percent loss for some. It seems clear that the efforts to attack local solar may have more to do with threats to utility profits than negative impacts on low-income people.

Bottom line: anyone who supports rooftop solar power and other forms of distributed energy need to be aware what the utility industry is really up to, and fight back against it hard.

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Studies by Two Major Banks Show Solar Rapidly Gaining Cost Advantage Over Fossil Fuels

Posted By Lowell F. on March 8th, 2015

Two major studies, one by Deutsche Bank and the other for the National Bank of Abu Dhabi (NBAD) by the University of Cambridge and PwC, demonstrate something that just a few years ago would have been considered wildly optimistic: solar power rapidly gaining a cost advantage over fossil fuels, with no end in sight to this ongoing, apparently inexorable, trend.  We strongly recommend that you read both reports, as they’re chock full of fascinating data and insights. However, the following are nine key findings from the two reports.

  • The total “solar addressable market” is huge: According to Deutsche Bank,  the world electricity market is expected to double, to $4 trillion, over the next 20 years.  Deustche Bank adds that “if the entire global electricity generation were to be from solar, [the] existing installed base (of solar) would need to be expanded by 120x.” NBAD notes that, “[a]lready, more than half of the investment in new electricity generation worldwide is in renewables.”
  • The amount of money involved is staggering. Over the next 20 years, Deutsche Bank expects “the electricity market to double to $4 trillion and expect the solar industry to increase by a factor of 10,” with the solar industry “expected to generate $5 trillion of cumulative revenue,” and “global solar penetration rates to increase to 30%” by 2050. According to NBAD, “US$48 trillion of investment in energy infrastructure is needed in the next 20 years: the bulk of it in non-OECD countries…More than 50 per cent of investment in new generation capacity worldwide is in renewables…US$260 billion a year has been invested in renewable energy technologies worldwide for the past five years.”
  • Tremendous changes are taking place: According to Deutsche Bank, “the solar industry is going through fundamental change and the opportunity is bigger than it has ever been before.” According to NBAD, “Renewable energy technologies that can realise these opportunities are proven, cost-effective and available today,” so that “[w]hen we look to the future, it is very clear that renewables will be an established part of the global energy mix.””
  • Solar prices are plummeting and will continue to do so. According to Deutsche Bank, “the cost of solar has decreased significantly over the past few years and this trend could continue for the foreseeable future,” with “over 50% of countries under review…likely at grid parity today.”
  • Even if oil prices fall, solar power can still thrive due to its own rapid price declines. According to Deutsche Bank, “Solar can still grow in a low-oil-price era, in part because most countries generate less than 5% of their electricity from oil.” In addition, “solar system costs have declined at ~15% CAGR over the past 8 years and we expect 40% cost reduction over the next 4-5 years as a solar module costs continue to decline, panel efficiencies gradually improve, balance of system costs decline due to scale and competition…”  Meanwhile, the NBAD study finds that “photovoltaic technologies are competitive today with oil at US$10/ barrel and gas at US$5/MMBtu.”
  • Solar power storage is getting close to large-scale viability. According to Deutsche Bank, “Batteries delivered at an economically competitive price are the holy grail of solar penetration, and we believe the industry will begin deploying on a large scale within the next ~5 years or less.” According to NBAD, “The cost of energy storage is expected to drop to US$100 per kWh in the next five years, against US$250 now,” so that “in the next few years utility scale solutions will be deployed that further minimise concern around what was until recently seen as a major inhibitor to the uptake of renewable generation.”
  • Renewable energy technologies are far further advanced than many may believe.” According to NBAD, “solar photovoltaic (PV) and on-shore wind have a track record of successful deployment, and costs have fallen dramatically in the past few years. In many parts of the world, indeed, they are now competitive with hydrocarbon energy sources.”
  • Key solar markets. According to Deutsche Bank, the key solar markets in thew orld include the USA (50GW+ solar capacity by 2017?); China (” will continue to be one of the most important markets in the world over the next several year”), Japan, India (” the government has targeted ~100GW of solar by 2022.”), Germany (“We expect the majority of installations to come from the small scale rooftop segment going forward, given the country’s high electricity price.”), etc.
  • Scale, Capital, Technology and Diversification: Deutsche Bank believes that the keys to winning in the solar power sector include four things: Scale, Capital, Technology and Diversification. With regard to capital, Deutsche Bank adds, “the successful IPOs of some of the recent YieldCo offerings is a significant positive for the overall solar/renewables sector and a key catalyst enabling the sector’s transition from subsidies to grid parity.” NBAD stresses that “Realising the opportunity will require collaboration between policymakers and financial institutions.”
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Solar Power Grows by Leaps and Bounds in USA…But NOT in Virginia

Posted By Lowell F. on January 23rd, 2015

The other day, I ran into yet another article – on the superb website Greentech Media – regarding the rapid rise of clean energy in America. The numbers this article (“America Installed 22 Times More Solar in 2014 Than in 2008“) presents are truly eye popping.

In 2008, the U.S. installed 263 megawatts (AC) of solar PV and CSP. In 2014, based on GTM Research’s conservative estimates, the U.S. installed at least 5.7 gigawatts (AC). The PV figures were discounted into AC from DC in order to make an accurate comparison and include concentrating solar.

More than 80,000 new jobs have been created in the industry since then. Today, one company, SolarCity, is booking almost as much solar capacity in one quarter as the entire industry put on-line in all of 2008.

So, yeah, solar power installation in this country is growing by leaps and bounds as the cost of solar plummets. And no, the fastest-growing states are not just in the Desert Southwest, but also in northern and mid-Atlantic states like Colorado, Delaware, Massachussetts, New Jersey, North Carolina, Vermont, Maryland, Connecticut, Oregon and Pennsylvania. Notice a state missing here? That’s right, Virginia, also known as the “Old Dominion, with the emphasis on the word “Dominion” – as in Dominion Virginia Power, a largely fossil-fuel (and nuclear) utility which essentially owns the Virginia General Assembly, as well as the powerful State Corporation Commission, which ostensibly is supposed to regulate Dominion.

So, what have the results been in Virginia (note: we’re focusing on Virginia because Tigercomm is located there, and also because it’s an excellent case study into the effect of clean-energy-unfriendly policies), with Dominion and its fossil-fuel-funded friends in the state legislature blocking and tackling for dirty, carbon-based fuels, while doing their utmost to stymie the explosion of clean energy (wind, solar, energy efficiency, etc.) we’re seeing in the rest of the country and world?

In two words: not good. Here’s the sad story, courtesy of the Solar Energy Industries Asssociation (SEIA):

In 2013, Virginia installed 6 MW of solar electric capacity, ranking it 27th nationally…The 9 MW of solar energy currently installed in Virginia ranks the state 30th in the country in installed solar capacity. There is enough solar energy installed in the state to power 1,000 homes.

Wow, 1,000 homes out of millions. Yes, that number really is as pitiful as it looks. The frustrating thing is that the situation is pitiful not because Virginia is lacking in sunshine, wind, or potential for energy efficiency gains, but simply because of bad policies.

On the upside, policy is something we can change, at least in theory. Of course, the “powers that be” could decide not to change policy, but that won’t help their pals at Dominion Power in the long run. For more on that, see David Roberts’ superb article, Rooftop solar is just the beginning; utilities must innovate or go extinct.

So, Dominion (and Virginia more broadly) has a stark choice: 1) continue to fight inevitable change, saddle Virginians with dirty energy for years to come, yet eventually see the entire business model collapse anyway (what Roberts calls the “death spiral”); or 2) adapt to a changing world, one in which even oil-rich Middle Eastern countries are moving heavily into solar power for purely economic reasons — because its price is low and heading lower. It seems like an easy call to make, but as we saw just this morning, with the defeat of a Virginia renewable energy tax credit bill (by Del. Rip Sullivan) in a House of Delegates committee, there are a lot of politicians who still don’t “get it.”

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