SPI 2015: Utilities can no longer ignore US public’s desire for solar

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Against the background chatter over the fate of the solar investment tax credit in the US, one positive theme to emerge during Solar Power International 2015 was the extent to which public opinion is forcing utility companies to accept solar.

During a panel discussion organised by the Solar Electric Power Association, Tony Clifford, chief executive of Standard Solar highlighted how even in the past two to three years, there had been a dramatic change in utility attitudes towards solar.

“I remember about two and a half years ago when the Edison Electric Institute came out with their report that characterised distributed generation PV as a possible disruptor of the utility business plan,” he said. “That gave cover to those utilities that had already starting investing in solar while the ones that were actively against solar at that point really had to take a look at what they were doing and where PV was. And we’ve seen a tremendous sea change in the amount of interest from utilities of all stripes in PV.”

Of course this is by no means universal, with utility companies in a number of states still locking horns with the pro-solar lobby as they seek to find ways of holding back what some see as a potential threat to their business models.

But during the discussion there was a clear consensus that public demand for solar has now reached such a level that resisting it has become an almost futile exercise.

Clifford used the analogy of the smartphone-enabled taxi firm, Uber, to explain the solar-utility situation.

“If you consider what Uber has done to the taxi business in the last couple of years, a lot of taxi companies fought Uber, and they pretty much lost because the customers wanted Uber,” Clifford said.

“What’s happening in the utility space is a lot of customers have decided they want solar. So we’ve got to make this work. We’ve got to make it work for utilities, we’ve got to make it work for the solar industry.”

Clifford said in the past two and half years or so, his company had gone from working with no utilities to working with a number of them. “It’s changed dramatically,” he said.

But with the picture of utility acceptance countrywide so uneven, Clifford said there was a need for some clear rules of engagement to minimise future battles between utilities and the solar industry.

“Right now we’re fighting it out on a public utility commission by public utility commission basis,” Clifford said. “I don’t think that’s good for solar, it’s not good for utilities either.

“One of the things that’s becoming more obvious is that the customers of utilities want more solar, so we’ve got to figure that out one way or another. I think we need to at least agree some common ground on certain issues so we narrow the playing field, because we’re going to spend a lot of money on both sides of the argument in every public utility commission in the country, and that’s crazy. I think we should get beyond that.”

Doyle Beneby, president and CEO of CPS Energy, the largest municipal electric and gas utility in the US, echoed this sentiment, adding that the weight of public pressure on utilities to embrace renewables would only grow.

“We’re seeing this change in demographics where people a generation or two younger than me think very differently. So in five or 10 years this won’t even be an argument. It will be a given that this is the path we’ve chosen as a society. So I think if you’re on the utility side, you just have to acknowledge that.”

Clean Power Plan a key driver

The panel agreed that one big factor that would influence the future adoption of renewables by utilities was President Obama’s Clean Power Plan.

“Clearly, the Clean Power Plan will probably have some iterations and changes, but no doubt you can’t read it without feeling it’s going to be really supportive and a driving force for renewables,” said Greg Wolf, president of Duke Energy Renewables.

“It’ll also be a driving force for having utilities as a whole become even more active than they have been over the last few years, willing to own more assets, sign more PPAs, and especially in terms of thinking about how to serve customers applying technologies like mirco-grids, storage and so on. I think it’s going to be a real enabler,” Wolf said.

Clifford highlighted the significance of solar now playing such a central part of the ambitions outlined in the Clean Power Plan.

“The early drafts of the plan didn’t mention solar or wind, especially solar. But in the past couple of years the sorts of cost reductions we’ve achieved in the solar industry, and the fact we can see a glide path going forward are really what has brought solar into the Clean Power Plan. And this is going to give us a long-term tail wind for the development of solar – 2022 and beyond is where it’s going to have a real impact.”

Of course, that leaves a crucial gap of around five years between the planned ITC drop-off in early 2017 and the date by which the measures outlined in the Clean Power Plan kick in, and Clifford said on this basis an extension of five years would be needed to the ITC.

But he said the Clean Power Plan gave recognition to the vital role of solar and wind energy in particular in helping reduce carbon emissions.

“If we keep driving down our costs, then our role is just going to get bigger and bigger,” he said.

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