Solar energy is ready, the U.S. isn’t

October 29, 2012 by  
Filed under Green Energy News

Clean energy has become a dirty word in presidential politics.

In their second debate, Mitt Romney and Barack Obama each tried to outdo the other’s love of fossil fuels: Obama extolling his record on oil and natural gas production, Romney vowing to take “advantage of the oil and coal we have here.” The Republican candidate has ridiculed the administration’s $535 million loan guarantee to Solyndra, the bankrupt solar panel maker, and accused Obama of living “in an imaginary world where government-subsidized windmills and solar panels could power the economy.”

The candidates’ coolness to renewable energy comes at a time when the domestic supply of traditional energy sources, such as oil and natural gas, is at an all-time high. And yet this failure to make the promise of renewables a keynote in the debate is a huge missed opportunity. In particular, it ignores the dramatic reduction in the cost of photovoltaic solar power worldwide and the considerable benefits to U.S. consumers and the environment.

Political roadblocks

The untold story of this campaign is that what killed Solyndra may turn out to be a boon for the nation. “Economically and technologically, the game is over,” said Bill Powers, a San Diego engineer and board member of Solar Done Right, a group that proselytizes for rooftop solar power. “The hang-ups in the U.S. are strictly political.”

Over the past five years the price of photovoltaic panels has plummeted 75 percent, due largely to a glut of Chinese-made panels. The fall in prices rendered technically advanced photovoltaic panels, like those produced by Solyndra and other U.S. companies, too expensive to compete.

But cheap panels have been a godsend for consumers such as Powers. He recently took advantage of a sale at his local retail solar panel store and self-installed 1,000 watts of extra solar power on his roof at a cost of $2 a watt, including a 30 percent federal tax credit. Nationally, the average cost of residential installations – including hardware, permits, and labor – has plummeted from $9 a watt in 2006 to $5.46. Averaging in commercial industrial installations, the national installed price plummets to $3.45 a watt, says the Solar Energy Industries Association, a Washington trade group.

The result is a burgeoning rooftop revolution. The group says almost 52,000 residential rooftop systems were installed in the United States last year, up 30 percent from a year earlier. Total rooftop installations, including on commercial buildings, grew 109 percent from 2010 to 2011, according to the trade group. Total photovoltaic installations are projected to grow an additional 71 percent this year from 2011 levels.

Despite such breakthroughs, the U.S. economy is harnessing only a fraction of solar energy’s potential benefits. Based on U.S. Census Bureau data, about 100 million residential units could physically hold rooftop systems one day, generating by one estimate 3.75 trillion kilowatt hours of electricity a year. In 2011, total electrical generation from all sources was about 4 trillion kilowatt hours – 42 percent of that from coal, according to the U.S. Energy Information Administration.

Maintaining status quo

The trouble is, many of the big, investor-owned utilities that provide about 85 percent of America’s electricity see solar as both a technical challenge and a long-term threat to their 100-year-old profit models. And the lack of a national energy policy means regulation of solar is up to states, public service commissions, and a wealth of local governments and bureaucracies – many of whom have a vested interest in maintaining the status quo.

The rule of thumb had been that once rooftop installations made up 15 percent of the power on a given circuit, utilities could stay new connections until residents undertook an engineering study – costing as much as $50,000 – that showed their addition wouldn’t destabilize the power grid. The hidden costs of obtaining permits and regulators’ approval to install rooftop panels is a big reason the United States lags behind Germany, which leads the world in rooftop installations, with more than 1 million.

Germans lead the way

The price of installed rooftop solar in Germany has fallen to $2.24 per watt. In fact, on a sunny day in May, rooftop provided all of Germany’s power needs for two hours. “This is a country on latitude with Maine,” says Dennis Wilson, president of the Mid-Atlantic Solar Energy Industries Association, a solar-installer trade group. “Germany is showing us what’s possible – if we can just get our act together.”

The United States has more than 18,000 jurisdictions at the state and local level that have a say in how rooftop solar is rolled out, according to the U.S. Department of Energy. What’s more, electricity is supplied by investor-owned utilities, mostly state-regulated monopolies, which supply power from centralized hubs to captured consumers. Profit is in part tied to growth based on an ever-expanding demand as populations increase.

Rooftop solar poses a threat to that model by turning consumers into producers, thereby sapping utility revenue streams. It also diminishes the need to build expensive new plants and transmission lines. The saturation limits being imposed by utilities in places with booming rooftop demand “are a bit like speed bumps,” said Mark Duda of RevoluSun, Hawaii’s largest residential rooftop installer. “They want to slow things down out of fear of being overrun by PV.”

Ken Wells is a Bloomberg reporter. E-mail: kwells@bloomberg.net

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