Federal Energy Regulatory Commission (FERC) Chair Jon Wellinghoff: Solar ‘Is Going to Overtake Everything’

One of the country’s top regulators explains why he is so bullish on solar.

HERMAN K. TRABISH: AUGUST 21, 2013

If anybody doubts that federal energy regulators are aware of the rapidly changing electricity landscape, they should talk to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission (FERC).

“Solar is growing so fast it is going to overtake everything,” Wellinghoff told GTM last week in a sideline conversation at the National Clean Energy Summit in Las Vegas.

If a single drop of water on the pitcher’s mound at Dodger Stadium is doubled every minute, Wellinghoff said, a person chained to the highest seat would be in danger of drowning in an hour.

“That’s what is happening in solar. It could double every two years,” he said.

Indeed, as GTM Research’s MJ Shiao recently pointed out, in the next 2 1/2 years the U.S. will double its entire cumulative capacity of distributed solar — repeating in the span of a few short years what it originally took four decades to deploy.

Chart: GTM Research/SEIA U.S. Solar Market Insight

Geothermal, wind, and other resources will supplement solar, Wellinghoff said. “But at its present growth rate, solar will overtake wind in about ten years. It is going to be the dominant player. Everybody’s roof is out there.”

And those other resources have not seen declining prices like solar has. “Solar PV is $0.70 or $0.80 per watt to manufacture. Residential rooftop is $4 to $5 per watt. But they are going to drive that down to $2 and then to $1 per watt.”

Advanced storage technologies also promise lower costs, he said. “Once it is more cost-effective to build solar with storage than to build a combustion turbine or wind for power at night, that is ‘game over.’ At that point, it will be all about consumer-driven markets.”

Wellinghoff was a consumer advocate early in his career and has not changed sides. “Even though the FERC oversees wholesale markets, utilities, and other jurisdictional entities at the wholesale level, the consumer needs to be our major concern,” he said.

If FERC does not ensure the grid is ready to integrate the growing marketplace demand for distributed solar and other distributed resources, Wellinghoff said, “We are going to have problems with grid reliability and overall grid costs.”

Transmission infrastructure will be able to keep up with solar growth. The big changes will be at the distribution level where FERC has less influence, he explained. But the commission has been examining the costs and benefits of distributed generation (DG) in wholesale markets.

“Rate structures need to be formulated in ways that fully recognize the costs and benefits of distributed resources,” Wellinghoff said. “In many utility retail rates, a disproportionate amount of the fixed costs are recovered through a variable rate. That is problematic when a lot of people go to distributed generation.”

The net metering controversy this has caused at utilities like Xcel and Arizona Public Service, he said, can only be resolved by “the fully allocated, fully analyzed cost and benefit study of distributed resources.”

There is value in distributed solar, Wellinghoff said, “that can be captured and realized by the distribution utility that is not being paid to PV system owners because they have not been analyzed, quantified, and monetized.”

The Crossborder Energy study in California concluded the benefits of DG are near retail rates, he noted. “If utilities say that study is wrong, let’s get their studies and the studies from the solar side, and let’s have a hearing, let’s have full discovery, and let’s have a fully litigated process. That’s what regulatory commissions at the federal and state levels are for, to put all that data on the table and see what the accurate answers are.”

FERC isn’t involved in that process because it is a retail rate issue, Wellinghoff explained. “But DG and distributed solar can be wholesale grid resources if a wholesale grid operator can access those resources and have some control over them. What FERC has to do is ensure these distributed systems get recognized and compensated and integrated into the wholesale grid.”

If he was put in charge of updating the retail utility business model and pushing it to incorporate DG, Wellinghoff said, he would introduce more competition.

“I would unbundle utility services,” he said. “I would do a full analysis of anything not now competitive, like the distribution system, and then try to ensure I could recover costs in a way that adequately reflected all costs and benefits for all users.”

The sales of retail energy, capacity, and ancillary services should all be competitive and coupled with the wholesale grid, he said.

“Consumers should have access to and be able to respond to five-minute wholesale prices. They should have the opportunity — not the requirement, but the opportunity — to respond to those prices and modify their loads and usages to lower their energy costs. The result would be an optimized use of the grid.”

Watch Wellinghoff answer a caller’s question about distributed solar:

Tags: capacity, competition, consumer-driven markets, distributed generation, distributed solar, federal energy regulatory commission, ferc, jon wellinghoff, net metering, utilities,wholesale markets

Harvest Energy – 2013 Top 250 Solar Contractors

HES LogoHarvest Energy Solutions, EcoWise Power’s premier solar PV installation partner in Iowa, has been named to the Solar Power World list of 2013 Top 250 Solar Contractors in the United States. Harvest Energy is currently ranked number 172.

About Harvest

Harvest Energy Solutions is proud to serve agribusiness customers in your local area. We want to thank our customers for making us the fastest growing, full-service distributor, installer, and integrator of wind energy and solar PV systems in the Midwest. From product selection and site assessment to on-site installation and follow-up maintenance, we partner with our customers through the entire process. Since 2006, our goal has been to assist farmers and ranchers in becoming more sustainable, efficient and independent.

At Harvest, we leverage more than 100 years of collective commercial equipment installation experience with a renewed focus on solar photovoltaic (PV) and other renewable system designs and installations. We currently have offices in Jackson, Michigan and Almo, Kentucky with Territory Managers in Kentucky, Michigan, Iowa and Minnesota. In addition we have numerous Harvest representatives in states throughout the Midwest. The Harvest team has a history of over 4MW of designed & installed solar PV systems, with over a megawatt of installs in the last few months. Many of these are right in your area.

Recently we have expanded our staff to include a NABCEP (North American Board of Certified Energy Practitioners) installer. NABCEP is the gold standard for PV installation certification and typically required for sophisticated PV installations. We also have on a full-time licensed Master Electrician on staff to ensure that all work meets or exceeds NEC electrical and safety codes, and complies with all federal, state and local building codes, requirements and regulations.

Our premium line of products provide best-in-class performance and allows us the flexibility to offer customized renewable resources that best fit your specific needs while leaving options open for future expansion at your site. At Harvest, we have experience with the sometimes-tedious process involved with getting your renewable system online, and assure you that from the first conversation through project completion, we will manage and oversee the complete process. We will become deeply involved with the local municipal authorities and your local utility company. We diligently pursue all potential grants and take on other hurdles specific to your renewable installation project. In addition, we always use our own installation and maintenance crews to ensure a quality job every time.

The future looks bright for clean energy and clean energy cost savings. Soon, Harvest will be adding more renewable and energy saving products and services to meet the needs of the agribusiness industry. If you’d like to learn more give us a call or drop us an email. You will be pleasantly surprised how affordable a Harvest renewable energy system can be… and at the same time how proud your family and friends will feel by your decision. At Harvest, we, like you, look at the long term benefits of clean energy. Our team is looking forward to hearing from you soon.

Getting to Know Net Metering

Original Source: www.seia.org

Net metering allows residential and commercial customers who generate their own electricity from solar power to feed electricity they do not use back into the grid. Many states have passed net metering laws. In other states, utilities may offer net metering programs voluntarily or as a result of regulatory decisions. Differences between states’ legislation and implementation mean that the benefits of net metering can vary widely for solar customers in different areas of the country.

What Is Net Metering?

Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on the home’s rooftop, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use. On average, only 20-40% of a solar energy system’s output ever goes into the grid. Exported solar electricity serves nearby customers’ loads.

This digital meter runs in both directions to accommodate electricity generated at this customer’s home. A 4 kilowatt PV system on a home in this area would offset around 4911 kilowatt hours of electricity each calendar year, saving the homeowner over $380 on their utility bill. (Source – NREL PV Watts, EIA)

FACT SHEET

Net Metering by State

Giving Customers Control Over Their Electricity Bills

Net metering allows utility customers to generate their own electricity cleanly and efficiently. During the day, most solar customers produce more electricity than they consume; net metering allows them to export that power to the grid and reduce their future electric bills. California public agencies and schools will save $2.5 billion in electricity costs over the next 30 years using net metering.

Creating Jobs & Encouraging Private Investment

Net metering provides substantial statewide economic benefits in terms of jobs, income and investment. Net metering increases demand for solar energy systems, which in turn creates jobs for the installers, electricians, and manufacturers who work in the solar supply chain. Today, the solar industry employs 119,000 American workers in large part due to strong state net metering policies which have allowed the solar industry to thrive.

Protecting the Electric Grid

Unfortunately, some utilities perceive net metering policies as lost revenue opportunities. In fact, net metering policies create a smoother demand curve for electricity and allow utilities to better manage their peak electricity loads. By encouraging generation near the point of consumption, net metering also reduces the strain on distribution systems and prevents losses in long-distance electricity transmission and distribution.

Advocate for solar energy. Your voice counts! SEIA Advocacy.

Net Metering Links