As Iowa faces a potential surge in distributed generation, advocates and some legislators are concerned the state isn’t prepared.
In recent comments to state regulators, MidAmerican Energy, one of the state’s two largest investor-owned utilities, says that to date this year inquiries about interconnections for distributed generation are coming in at twice the rate they did in early 2013.
However, the utility forecast that substantial growth in distributed power will cause a raft of problems, at least in the current policy environment.
The Iowa Utility Board, sensing a growing interest in renewables, in January invited feedback about where the potential and the pitfalls might lie. While dozens of people expressed a desire for more distributed energy in the state, they also identified significant issues that stand in the way.
In its comments, MidAmerican voiced concerns common among utilities: that customers who don’t generate their own power may be bearing an unfair proportion of the system-wide costs of transmission and distribution services – on which small generators rely just as much as customers who don’t produce power. Bills need to reflect the cost of services used by customers who generate at least some of their own power, the utility said.
MidAmerican roughly estimated that, should 25 percent of its customers install solar panels, costs for the other 75 percent of its customers might increase by about 8.5 percent.
Those concerns, however, were part of a raft of comments supportive of expanding distributed renewable power.
‘Part of the solution’
Since the board issued its notice of inquiry on Jan. 7, comments have come in from 208 people and organizations — including a man trying to build a net-zero house, a collection of 66 farmers and rural business-owners, the state’s large power utilities and 25 state legislators.
David Osterberg, founder of the Iowa Policy Project and a professor in the occupational and environmental health department at the University of Iowa, said the key is providing utilities with proper incentives.
“Climate change is a reality and the investor-owned utility companies must adjust their business model to contend with it,” he wrote. “The question for the board should be, ‘How does the state of Iowa procure more distributed electric generation installed in a way that gives the utilities a way to be part of the solution?’”
One recurring theme in the comments to the board concerns the need to determine the costs and benefits of distributed energy.
Utilities and advocates agree on the need for an objective assessment that has a chance of putting to rest questions about how distributed energy impacts utilities. Studies have been done in several states, yet the debate rages on about whether distributed energy is a net benefit or a net cost to the companies that move power from one point to another.
“We need to base decisions on actual data, rather than on fears or blanket assertions,” said Josh Mandelbaum, who submitted comments on behalf of seven environmental organizations including the Environmental Law & Policy Center, where he is a staff attorney.
The enthusiasm expressed for distributed energy comes just weeks after the Iowa legislature opted not to move ahead on three bills that would have advanced solar energy in the state. One of them proposed a new renewable energy standard requiring 105 megawatts of solar by 2017. Another would have doubled the amount of state tax credit funds available to subsidize installation of on-site renewables.
In a phone interview, Rep. Charles Isenhart said the utilities board, with the information gleaned from this information-gathering exercise, could add considerable heft to legislation aimed at fostering more distributed generation.
In the general assembly, he said, “It’s easier for us to move legislation that comes from agencies.” Proposals from the IUB that favor distributed energy “are going to get more serious consideration than if they came from a different direction.”
In comments submitted to the regulatory agency, Isenhart and two dozen legislative colleagues proposed:
• Establishing a solar renewable energy standard,
• maintaining the existing net metering law, which allows some utility customers whose systems produce excess power to earn credits against future bills,
• allowing several new financing methods, including third party power purchase agreements,
• and avoiding extra charges on small generators, at least until a cost-benefit analysis has been completed
Those who submitted comments addressed many other issues. Several parties wanted the state to extend existing incentives to industries for the development of combined heat and power, a largely untapped technology with substantial potential in Iowa to reduce industrial power use by generating both heat and electricity with a single fuel source.
Others urged the board to extend net metering, which now is available primarily only to customers of large investor-owned utilities, to customer/owners of rural electric cooperatives and municipal utilities.
Still others pointed to a need to update interconnection standards. Moving ahead with a distributed generation project requires an interconnection agreement with the local utility. And while the state’s large investor-owned utilities must comply with interconnection standards, “The customers of the cooperatives and municipal utilities in Iowa do not have that same level of predictability,” said Steve Guyer, president of GWA International, an Iowa designer and installer of solar systems. “In fact, many of the cooperatives and municipal utilities have policies in place that unduly increase the costs of interconnection.”
James L. Eliason, who identified himself as a retired scientist, expressed a common view that the transition to distributed energy is inevitable.
“I think the future of nearly all technological issues is decentralization,” he wrote. “The internet has decentralized information generation and transmission, and energy generation and transmission will not be far behind.”
Iowa is well established as a national leader in wind energy and biofuels. And now the state is poised for serious growth in solar as well.
“The market is exploding in Iowa,” says Tim Dwight, a former Iowa Hawkeye and NFL star who has become one of his home state’s most visible solar energy advocates.
Homeowners, farmers, businesses and at least one school district in Iowa are going solar. Also, over the past year, several municipal utilities and rural electric co-ops have put up solar arrays, inviting customers to buy a share of the power generated.
“Solar growth in Iowa is where wind was in the first decade of the 2000s,” says Bill Haman of the Iowa Energy Center. “We saw an explosion in wind.”
In Frytown, just outside Iowa City, the Farmers Electric Cooperative has been steadily adding on to a community solar project established on its property in 2011. And a few weeks ago, the co-op announced plans to put together a 750-kilowatt solar farm, which would be the largest solar-energy project in the state. It’s projected to meet about 15 percent of the co-op’s demand for power.
In September, the Iowa Association of Municipal Utilities put an 18-kilowatt array on the roofs of several buildings at its headquarters in Ankeny.
And in November, several organizations snagged a $1 million grant from the Department of Energy to streamline local permitting and zoning codes, and improve standards for connecting solar generation to the grid. The aim: to cut the time and costs of adding solar generation. State lawmakers who attended a recent solar tour have pledged to help.
Incentives high, costs low
Iowa’s solar capacity remains a tiny fraction of its overall energy mix — at the end of 2012 the state had only about 1 MW of solar installed compared to more than 5,000 MW of wind.
But the same market forces driving solar growth in other parts of the country are being felt in the heartland, too.
The biggest factor driving all of the fireworks, according to Haman, not surprisingly, is money.
“Incentives are at an all-time high, and costs are at an all-time low,” he said. The cost per watt is between $3 and $3.50 now, compared with a range of about $7 to $10 several years ago.
Systems typically pay for themselves within a decade now, given federal and state tax credits and, in much of central and eastern Iowa, a subsidy available to customers of Alliant Energy. A decade ago, Haman said, recouping the costs of a solar installation could take 30 to 50 years.
Haman says money is not the only factor, though. He said Iowans have been waking up to solar power – an observation shared by Warren McKenna, the general manager of the Farmers Electric Co-op.
Finding himself on sort of a solar-energy lecture circuit of late, McKenna gets to listen to lots of people. And he says they’ve been taking notice of solar panels in other places – Minnesota, Colorado, California — and have been pressing their utilities to get on board.
Traer Municipal Utilities installed a 40-kilowatt community solar project a few months ago, said manager Pat Stief. All 106 panels have been purchased by 42 customers. They paid $530 per panel, rated at 305 watts, and will see a credit on their monthly bill for 20 years.
The Hawkeye Rural Electric Cooperative in northeast Iowa intends to put 25 kilowatts of panels on its property in Cresco, and also will invite members to invest in a share of the power. Ted Kjos, manager of marketing and communications, is looking ahead to a possible second phase.
“We’ve done a survey of our membership. A significant amount of our membership is interested in the co-op providing this,” he said.
Utility incentives coming to an end
Solar in Iowa has gotten probably its greatest single boost from Alliant Energy. In 2008, when Alliant put together its efficiency plan, designed to outline efficiency efforts through 2013, it proposed to subsidize small, on-site renewable energy projects.
For the first few years, there were very few takers. But the story’s changed dramatically in the past year.
Haman, from the Iowa Energy Center, manages a state revolving loan fund that provides interest-free money to help people pay the upfront costs of installing renewable energy systems at their homes or businesses.
He said there’s been “a steep rise” this year in the number of people seeking loans for solar panels.
“They’ve all come in in this past quarter,” he said, and nearly all of them – at least 40 out of 45 solar projects that have been processed – are from within the Alliant territory.
Installer Michele Wei concurs that there’s been a mad dash of late.
Her business with Alliant picked up a little steam in 2012, but this year, she said, “It was like, ‘Oh boy – it’s ending!’”
The Decorah Community School District, interested in putting panels atop several schools, has scurried to get its application in before the program expires. Superintendent Michael Haluska said the district will start small – probably about 24 kilowatts atop three or four schools.
It would be just enough to “max out the Alliant rebate,” he said. “We don’t want to lose the opportunity for that rebate.”
And while there’s nothing like a deadline to organize the mind, several people familiar with solar matters in Iowa said that Alliant Energy could – and should – have made a greater effort to publicize the subsidy for on-site renewables, which it will be terminating as of Dec. 31. The utility claimed that not many people were taking advantage of it.
Haman suggested that might have been because Alliant’s effort to publicize it “wasn’t a very aggressive marketing campaign.”
Wei went a bit further, characterizing the solar rebate as a “best-kept secret. If you don’t go on their web site, you don’t know about it.”
Jennifer Easler, an attorney with the Iowa Office of Consumer Advocate, said that an outside committee convened to review Alliant’s efficiency programs recommended “a stronger outreach effort.”
Justin Foss, a spokesman for Alliant Energy, said that the company routinely informs customers of efficiency benefits, like the on-site solar rebate, through articles in a company newsletter that goes out with monthly bills.
The network of solar dealers working in the state is “the best collection point” for getting such information out, he said.
But when Alliant has changed procedures and moved up deadlines, Wei said, the utility has failed to keep installers up to date.
“There’s a lack of knowledge that the rebate is out there,” said Dwight, who is president of the Iowa Solar Energy Trade Association. “There’s not very strong advocacy of solar from the utilities. They don’t do a good job of educating customers.”
Meanwhile, business remains brisk for installers like Wei.
“We (installed) seven systems in the last month,” she said. “That’s definitely much more than we did last year. Since April or May, we’ve been installing nonstop.”
Original source: Farm Industry News
High up-front costs have steered many farmers away from investing in their own solar or wind energy plant. But that scenario is changing with the rise in energy prices and a concurrent drop in material costs for installing a solar or wind plant.
“In the last four or five years, the cost of solar systems has actually been cut in half,” says Mark Olinyk, president of Harvest Energy Solutions, a Midwest energy distributor specializing in the farm market. “The technology is getting better, and the solar panels are much more efficient.”
Solar and wind are the two most common forms of renewable energy in the U.S. But Harvest Energy Solutions says sales of solar have dramatically surpassed wind over the last couple of years. The company says the current trend across all states is leaning toward solar because the entire solar installation is getting cheaper.
With wind, Olinyk says the cost of your investment is basically the price of steel, magnets and copper used to construct the turbine, none of which has come down in price.
The company installs 10kW (solar) systems or larger. A typical system costs anywhere from $3 to $3.50 per watt, which means a 10kW array would cost about $35,000. That size of an array can power an average house. The energy, or kilowatt-hours produced, is typically used first, and the additional energy created and not immediately used is fed into the utility grid and stored there to provide a backup supply of energy when needed.
Incentives to act
Many farmers could justify getting an alternative energy system, especially with the number of incentive programs available. For example, the federal government is offering a 30% income tax credit to those buying a solar or wind installation for a home or business. This tax credit will be in effect for installations until Dec. 31, 2016. Additional national incentives and available rebates are listed at energy.gov/savings.
Local utility companies offer their own incentive programs. “Biggest thing we are seeing is that every utility company in the country has different incentives,” Olinyk says. “Part of what we do is to work with the utility companies for you to find out what incentive programs are available and which ones work best for you.”
“We have literally installed solar arrays on farms where the farmer has all of his investment returned to him after one tax cycle. This doesn’t happen all of the time, but it does happen.”
Olinyk says farmers in the Midwest should consider both solar and wind systems when calculating payback. “In some regions of the country, a wind turbine may be the better option.”
“We do site assessments for every potential customer. We will compare the costs of wind and solar, measure the projected energy output, and determine the [return on investment] for each one. And we give you a conservative estimate on the returns.”
For more information, visit harvest harvestenergysolutions.com.
The third quarter of 2013 was another big one for the U.S. solar industry. 930 megawatts of solar photovoltaics (PV) were installed across the country — the second largest quarter in the industry’s history — and it was the largest quarter ever for residential PV installations.
As the solar industry continues its remarkable growth, “2013 is likely to be the first time in more than 15 years that the U.S. installs more solar capacity than world leader Germany,” according to GTM Research and the Solar Energy Industries Association.
By the end of the year, more than 400,000 solar projects will be operating across the U.S. and installations will have grown 27 percent over 2012, with a 52 percent growth rate in the residential sector alone, according to GTM’s forecast.
Read more at ClimateProgress
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.
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
- Solar Policy Guide, Database of State Incentives for Renewable Energy (DSIRE) – this guide describes trends in state and utility net metering standards, and includes examples of policy best practices and links to more resources
- Net Metering & Interconnection, Solar America Board for Codes & Standards (SolarABCS) – this page has a report on assessing the retail rate impacts of net metering, advanced metering infrastructure and other technical research
- a report on net metering (pdf), Interstate Renewable Energy Council (IREC) – this hub for net metering & interconnection information contains a report on net metering (pdf), a state-by-state list of net metering rules, model interconnection & net metering rules
According to Bill Haman, Iowa Energy Center’s Alternate Energy Revolving Loan Program (AERLP) manager, solar power is growing at a record pace around the world and Iowans are joining the bandwagon, especially on the eastern side of the state, while the western side is showing little interest. Mr. Haman sees this as odd, as Western Iowa is actually a “slightly better” location for solar power than Eastern Iowa. He explained that solar power is best in the extreme southwestern corner of the state and that it diminishes the further northeast you move.
Mr. Haman said there’s no time like the present to go solar if your surroundings meet the requirements because the price is lower than ever: “It’s low enough that it’s extremely competitive with any other alternative a homeowner may chose to explore…That compounded with federal and state incentives that are available makes it a very appealing opportunity if your residence is set up for it.”
When it comes to installation, according to Haman, the process is actually quite simple. Solar panels need to face south and be mounted on a rooftop in an urban setting, due to large trees or surrounding homes potentially casting shadows on the panels. A solar inverter needs to be installed to convert power for use as well. Since solar systems usually do not have any moving parts, they require little to no maintenance.
Those looking to install such a system need to work with a building inspector, secure the proper permits, submit an application to their local utility company, and should install energy efficient appliances, lights and insulation for maximum efficiency.