Getting to the Dream- Reliable Distributed Renewable Energy Generation

In order to move the idea of small scale renewable energy forward for the every-day home owner in a way that makes a resource contribution to utilities, three things need to happen.

First there needs to be willing homeowners wanting to install distributed generation equipment like wind, solar or biomass generation on their homes. As part of this concept they also need to be interconnected to the grid to make the output of their generators or excess kWh, available to the grid.

Next there needs to be effective, clear and fair state regulations that define net-metering and interconnection requirements. These regulations must not penalize homeowners who want to be distributed system generators or place unfair burdens on compliance.

And finally there have to be utilities willing to adopt and implement programs for those customers or willing homeowners.

To make small scale renewable energy more than just a pipe dream, communities, utilities, state regulators and the nation need to move forward equally on all three fronts.

Willing Homeowners
So far, few homeowners have elected to install renewable energy equipment on their own. Most residential installations nationwide have taken advantage of state or local utility incentives that help homeowners cover some of the estimated $15,000 -25,000 installation and interconnections expenses.

States leading the way in this area like New Jersey and Colorado are struggling with ways to provide incentives without raising rates for all electric rate payers. In addition to the issue of incentives and rebates, the issue of homeowner education is a big issue. Too many homeowners have unrealistic expectations about the amount of money to be made selling excess power back to utilities even in areas with strong utility support for these systems.

These homeowners not only need to be willing to install the equipment on their homes but they need to be willing to monitor their systems and reassure their local utility that they won’t become a danger to themselves, their neighbors or the electric grid itself. A great source of practical self education information is available at Real Goods . They sell a book called the Solar Living Source Book that really is as they claim “the bible on renewable energy”. You can’t be serious about alternative energy and green power if you don’t have one on your book shelf. I have several versions and each new addition has great tips on getting the rubber to meet the road – so to speak.

Supportive State Regulations
In many states with willing and well educated homeowners you may face a list of regulatory hurdles that are more designed to protect myopic utilities, coal producers and the status quo then they are likely to support the installation of interconnected distributed generation. The two key areas of regulatory support are in net-metering regulations and interconnection requirements.

Onerous insurance or safety disconnect requirements can unnecessarily stifle willing homeowners before they even begin buying equipment. Some states however, like New Jersey, Colorado and Pennsylvania are working out these details in a way that protects public safety, assures utilities of safe interconnection and maintenance practices and supports small scale renewable distributed generation. The Network for New Energy Choices provides up to date analysis and reporting on statewide net-metering and interconnection rules. See their report Freeing the Grid: 2007 Edition.

“As of September 2007, thirty-nine states had adopted statewide programs that established rules for compensating consumers who own grid-tied renewable-energy systems. These programs award owners of small, grid-tied renewables the same savings as one would expect from conserving energy on-site.” – Freeing the Grid; Report No. 02-07 November 2007

Progressive Uilities
Utilities have a long history of making excuses for not supporting net-metering or distributed generation connections to the grid, yet for those utilities that have seen the light, customers are helping to meet the growing need for electricity in a way that actually saves utilities money in reduced infrastructure, improved reliability and deferred generation and transmission improvements . One of the leaders in small system residential solar development is the Sacramento Municipal Utility District (SMUD). “SMUD offers an incentive of $2.50 per watt, based on system performance (orientation, array, tilt and shade). The incentive will be paid to the approved PV contractor and should be reflected in the contractor's bid to the customer.”

What is the incentive for utilities to support distributed renewable energy generation? In the long run it will be survival, but in the short run its just money and reliability. In my last post I referred to the North American Reliability Corporation’s Long Term Reliability Assessment conclusions. They discuss electric power shortages in as little as two years. No matter which source you consult, everyone agrees that even with major conservation efforts, there will be a shortage of power. By promoting distributed generation, utilities add resources without the expense of generation and transmission.

Without the three pronged dedication of homeowners willing to dig into their own pockets, State regulator’s supporting reasonable enabling legislation and local utility support and cooperation, the green power revolution will choke on unfulfilled expectations. There are positive signs that all three key actors have learned from past mistake and are working toward a more supportive and measured approach to small scale distributed generation.

The recent Coop America Utility Solar Assessment (USA) Study summary says, “For the first time in history, a confluence of forces is coming together — solar technology developments, conventional energy price increases, aging transmission and distribution infrastructure, climate concerns, security issues, and others — that bring the dramatic worldwide growth of solar increasingly to center stage. In this rapidly changing energy landscape, the 10 percent goal is truly within reach.”

Next week I’ll go into more detail about utility company attitudes towards interconnection requirements and net-metering.

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© Mark Daily, 2008