John Farrell via Institute for Local Self-Reliance

Going solar keeps getting cheaper, but most of the cost savings have come from less expensive solar panels. “Soft costs,” like permitting and inspections, are a rising share of the cost of a solar installation. Several years ago, these permits could increase the cost of a residential solar project (then around $8.00 per Watt) by 5-10% , highlighted in a 2010 study by Sunrun. But as solar gets cheaper, permitting is going to be a much bigger problem.

A recent analysis by Lawrence Berkeley Labs [pdf] illustrates the benefits of streamlining solar permitting rules: it can cut the cost of a 2011 residential solar project (at $6.00 per Watt) by 5-13%, today’s (at $4.00 per Watt) by 8-19%, and tomorrow’s by as much as 40%!

The report confirms the earlier Sunrun study with a statistical analysis of actual solar permitting rules and the impact on final installation costs. It also lends credence to streamlined permitting schemes (like Vermont‘s) and to the broader efforts to improve solar permitting, like Vote Solar’s Project Permit.

In the new report Rate Design Matters: The Impact of Tariff Structure on Solar Project Economics in the U.S., GTM Research uncovers the often-not-discussed effect of utility rate structures on distributed solar generation.

In the report, GTM analyzes the electricity rates charged by Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) and calculates the avoided cost (i.e. rate savings) for a 500-kilowatt commercial photovoltaics (PV) system within each utility. This is where the importance of rate design comes in.

Generally, there are three types of utility rates for commercial electricity customers: fixed charges, which are set fees; demand charges, which are calculated based on the customer’s maximum kilowatt usage (usually measured in 15-minute intervals); and consumption charges, which are based on total kilowatt-hours of energy used. Consumption charges offer customers with installed solar the highest potential for avoided cost, especially when time-of-use pricing (rates increase when electric demand is higher) is in effect since solar can help to avoid the higher costs during peak hours.

The bottom line is that when fixed and demand charges are a large share of the commercial utility rates, distributed solar does not make as much economic sense for the commercial customer. Alternatively, when demand charges are reduced and time-of-use rates apply (what GTM calls a “solar-friendly tariff structure”), distributed solar becomes an attractive investment that can provide electricity at lower-than-retail rates.

GTM came to this conclusion by analyzing the effect of two rate scenarios at SCE and SDG&E: a default (incentive-free) rate structure and a solar-friendly rate structure. The results from their analysis are included in the figure below (Figure 2.8 on page 13 of the report).

Commercial Solar Discount to Retail Rates, 2013 & 2017

Source: GTM Research

The figure above demonstrates the role that utility rate structures can play when it comes to determining the cost effectiveness of installing a commercial PV system. Note that the dotted line at 10 percent represents GTM’s assumption that solar would become competitive with traditional generation at that point and the solar discount in 2017 takes into account the decline in investment tax credit (ITC) from 30 percent to 10 percent.

Even though “rate design” doesn’t sound quite as exciting as net metering, the GTM report points out that it is just as important in “determining the long-term viability of distributed generation, particularly as the U.S. transitions to a post-subsidy reality.”

As we consider the policies that are needed to incentivize distributed generation, it’s clear that we should also consider how utility rates are designed and how they affect the economics of distributed solar.

Mari Hernandez is a Research Associate in Energy Policy at the Center for American Progress.

Credit: John Moore / Getty Images

The Department of Energy’s Loan Guarantee Program was started in 2005 under the Bush Administration, but ramped up thanks to the 2009 stimulus passed by President Obama and the Democrats. It has gotten a bad rap ever since the high-profile failure of Solyndra, one of the solar tech companies the program invested in.

But, of course, a certain amount of failures and losses just come with the territory of investments in new technology. And The Atlantic Wire reports that the latest numbers reveal the program’s successfully shepherded 28 companies with various renewable energy projects, while creating over 20,000 jobs. Throw in the Advanced Technology Vehicles Manufacturing loan program, and the total created jobs come to around 60,000.

The purpose of the program, which is no longer handing out new loans, was to help companies cross the “valley of death” — the point when a company’s debt is at a maximum, because it’s already spent money investing in capacity and research and development, but hasn’t yet seen enough success in the market to have the revenue to begin paying those loans back. The government guarantee then encourages private investors, who must ultimately make up at least 20 percent of the investment pool under the programs rules, to take the risk of backing the company. The government’s own contributions are also structured as a loan, meant to be paid back over time.

As The Atlantic Wire notes, that last point is especially important to remember. The loan program has paid out $26 billion in total, resulting in a less-than-impressive ratio of $1.2 million per job created. But that’s with the government’s expenditures all out the door, and the returns from the companies yet to come in:

The loan guarantee is often considered a cost, which it isn’t. Some programs — like that wind farm out in Hawaii, are already repaying the loan, though it’s not clear how much. Others, like NextEra Energy, never received the full loan amount. We are currently at the high point of the dollars-for-jobs-created ratio. Given the nature of the program, the amount the government is out is reduced gradually over time.

The calculation is only temporarily that 0.8 jobs were created for every $1 million spent. It is nearly as fair to say that the ratio is 20,000-to-zero.

Obviously, the 20,000 jobs for $0 is an almost-certainly unattainable ideal, but that’s the direction in which the ratio is headed. And for the curious, here’s a map The Atlantic Wire compiled of the various projects and their numbers:

According to the Solar Energy Industries Association, the loan program has already brought one utility-scale solar project to operation, with ten more in the process of construction, in states such as Michigan, Kentucky, and Alabama. When they’re all completed, the eleven projects will supply over 2,700 megawatts — enough power to run roughly half a million homes. Another one of the loan program’s projects is expected to install 750 megawatts of solar arrays on commercial rooftops, across 28 different states.

By Chris Robertson

The Oregon Solar Energy Industries Association has just published a major new peer-reviewed study, Vision to Integrate Solar in Oregon (VISOR). Bonneville Environmental Foundation was the principal sponsor of this work by Chris Robertson & Associates. The VISOR report can be found here.

The key findings are that:

1. Large scale PV power plants are now cost effective in both PacifiCorp and Portland General Electric service areas, using PURPA avoided cost rates as the revenue stream for the plants.
2. Oregon could produce 20% of its electricity from 65 square miles of land. If this was all agricultural land it would be 1/4 of 1% of Oregon’s farm land.  Agricultural production (e.g. grazing small animals, honey production) could be maintained on the land.
3. Building-level distributed generation is not yet cost-effective. This is due mainly to a market design that is small, fragmented and does not enable contractors to get to economies of scale.
4. Remaining market barriers will need to be addressed. These include finance, land use, improved interconnection processes, transmission and distribution upgrades, permit streamlining, and others.
5. A Feed-in-Tariff regime should be designed to accommodate both utility scale and building level PV DG so as to drive down costs in both market segments and achieve a “reasonable” long term average cost of solar energy resources for the grid.
6. Monetizing the carbon value from installing solar makes it even more cost-effective (see figure).

The economic performance of a solar power plant built in Central Oregon and interconnected to PacifiCorp’s transmission and distribution system. The energy would be sold to PacifiCorp via a long-term power purchase agreement (PPA). PPA revenue is based on the utility’s 2012 avoided cost rates as regulated by the Oregon Public Utility Commission (PUC). The levelized $/MWh is shown for the production cost (red bars), PPA revenue (blue bars) and PPA revenue plus the value of avoided carbon emissions (green bars).

The full study is here.

– Chris Robertson is a business consultant, innovator and entrepreneur in the clean energy technology industry. For more than thirty years his work has been focused on how to accelerate the transition to a sustainable energy economy powered by renewable energy systems. Robertson can be contacted at cnrobertson@comcast.net

Credit: Yanko Design

Mother Nature Network just flagged a fun diversion in the solar technology world: the Window Socket.

It’s a portable solar charger, roughly the size of a hockey puck, which uses a suction cup to attach to any available window. It also has a standard electrical plug — though right now it’s only the European standard — so once it’s done charging you can plug an appliance into it right there on the window, or carry it around as a portable electrical outlet.

Obviously, the device would be most useful on a trip, in a plane, a bus, a car, or outdoors — circumstances in which an outlet might be hard to come by.

Besides the lack of an American outlet version, the Window Socket also has a few weaknesses. It takes five to eight hours to charge completely, which is a serious chunk of time, especially in travel situations — though it lasts ten hours after that. Furthermore, as Mother Nature Network notes, the design currently doesn’t deliver enough power for anything other than small electrical devices:

As pointed out by more than a few commenters — the device’s initial appearance over at Yanko Design impressively garnered more than 300 comments — the big drawback here aside from the slow charge time is that the Window Socket’s battery is currently at 1000mAh which isn’t enough juice to really power anything save for a smartphone or other low-voltage mobile gadget.

Though again, if travel situations are what’s primarily under discussion here, than enough juice for your smartphone may be all you need. And presumably, further improvements in technology will bring down the charge time and boost the power delivery.

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A common refrain, from skeptics to allies alike, is that renewable energy is a great idea, but not feasible because oil, gas, and coal will always be cheaper. Leaving aside the fact that fossil fuels are a finite resource and are the primary driver behind a warming planet, is it really true that renewable energy is more expensive?

Brian McConnell made a graph that shows what has happened to the price of energy (in gigajoules) since 1980 for solar power, natural gas, crude oil, and then residential electricity.

In his words:

The graph above compares the price history of solar energy to conventional energy sources. This is what a disruptive technology looks like. While conventional energy prices remained pretty flat in inflation adjusted terms, the cost of solar is dropping,fast, and is likely to continue doing so as technology and manufacturing processes improve.

That green line drops steadily. Though it represents a very tiny proportion of the total energy mix, as it gets cheaper and cheaper we can expect that to change. Disruptively. One thing McConnell said he would like to update is prices for coal, which would be interesting.

In an update, he noted that while joules are a good leveling metric, one thing they do not capture is the fact that many of those joules of fossil fuel energy are burned as waste heat, increasing the price. Solar placed in less sunny places than the American South would also increase the price.

His graph is backed up by the pros. In Bloomberg New Energy Finance’s presentation (pdf) to the Clean Energy Ministerial last month, this slide shows that solar panel prices fell 80 percent in the last 5 years:

It’s not just solar. This one shows the steady decline in wind turbine prices – 29 percent since 2008:

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(Credit: Michael Felletter)

The latest report from NPD Solarbuzz — a market research firm based out of Santa Clara, California — projects that global revenues for the solar photovoltaic (PV) module industry will drop from $25.5 billion last year to $20.5 billion for this year. That 20 percent plunge, according to Solarbuzz, is a simple matter of overproduction.

The supply of potential solar PV capacity shot all the way up to 45 gigawatts by 2012, while end-market demand only reached 29 gigawatts. The cause was a precipitous drop of 50 percent in the average selling price of the modules, which is great for anyone who wants to buy, install, or use solar energy, but not so great for firms that supply it.

So now there’s an ongoing drop in revenues, and a lot of backtracking amongst firms to bring supply back into line with demand, according to NPD Solarbuzz Senior Analyst Michael Barker:

Share values of several publicly listed PV companies have been falling close to delisting levels, operating losses have been reported in the hundreds of millions of dollars per quarter, and many manufacturers are continuing to file for insolvency.

As CleanTechnica noted, the recent bankruptcy of then Chinese solar manufacturer Suntech Power is only the most high-profile example of the problem. (Though it looks like Suntech’s troubles also had a lot to do with bad financial management outside of any question of market fundamentals.) The good news is that the reckoning should be short. NPD Solarbuzz also projects revenues will start climbing again in 2014, and should clear 2012′s level by 2016.

Solar PV Module Supplier Revenues Forecast To 2017

Source: NPD Solarbuzz Marketbuzz 2013

There’s an argument to be made that the short-term culprit here is the contest between the United States and China, to see who can subsidize their respective solar industries the most (Hint: China is winning). On the other hand, finding the most economically efficient way to deliver energy — or finding the best “comparative advantage” roles for the U.S. and China in the solar market — is only the second most important goal of promoting renewables.

The most important goal is preventing worldwide ecological and civilizational catastrophe. And the entire way we currently conceptualize and measure economic activity doesn’t grapple with the damage we’re doing on that account.

Admittedly, tax and grant subsidies for renewable energy technology are an imperfect response to that problem. Building prices into the energy we get from fossil fuels that actually account for the ecological and social risks of carbon emissions would be far more elegant — and might help avoid some of these annoying overshoots and busts in the renewable energy market. But getting a price on carbon is proving to be a difficult political lift.

And in the meantime, simply sitting on our hands isn’t an option.

(h/t: CleanTechnica)

How can we design an energy system that improves the quality of life of those who use it? In an event last Thursday entitled Policy Briefing: The Present and Future of Renewables in the United States and Around the World, Rep. Rush Holt (D-NJ) pointed out that this is the type of question that we should be asking.

While the event highlighted the growth of renewable energy and its future prospects all over the world, Rep. Holt emphasized what he sees as the lack of urgency in deploying the amount of renewables and clean energy needed to really address climate change. He added, “We are losing track in this country [and] we have lost track here in Congress that about now we are barreling past 400 parts per million of CO2 in the atmosphere … and that is not driving our energy policy and it should.”

During her presentation on the forthcoming Renewables 2013 Global Status Report (GSR 2013), Renewable Energy Policy Network of the 21st Century (REN21) Executive Secretary Christine Lins shared some good news on the current status of energy policy globally: the number of countries that have renewable energy targets has doubled since 2005 and now includes 120 countries – more than half of which are developing countries.

The GSR 2013 will be published in June, and Lins presented some of the main insights from it, including:

• Renewable energy makes up 18% of global final energy consumption
• 25% of global power generation capacity comes from renewable energy
• Cumulative installed capacity of solar photovoltaics (PV) has reached 101 gigawatts (GW), including 30 GW added in 2012
• Solar PV module prices fell 40% in 2011 and another 20% in 2012
• Cumulative installed wind capacity reached 282 GW, including 40 GW added in 2012

The event not only reviewed the current status of renewable energy, but also looked to the future with a presentation by Eric Martinot on the Renewables Global Futures Report (RGFR). Martinot, who authored the report, interviewed 170 leading experts and analyzed current renewable energy projections to provide an outlook on the future of renewable energy.

There were three main takeaways from Martinot’s presentation on the RGFR:

1. Most industry experts (interviewed by Martinot) believe that shares of renewable energy could reach at least 30-50% in the long term – showing that conservative projections that predict renewable energy shares of less than 20% out to 2040, like those from ExxonMobil, are no longer credible
2. Renewable energy investment is expected to nearly double by 2020, though many experts agree that higher levels of investment will require new investors and equity sources, such as oil companies, aggregated securities funds, pension funds, insurance funds, etc.
3. In the transition to greater levels of renewable energy, there will be opportunities for companies other than manufacturers and installers of renewable energy products, including electric power utilities, automakers, oil companies, IT companies and building materials manufacturers

Both the GSR 2013 and the RGFR offered insights into the renewable energy sector, showing positive trends in renewable energy deployment and investment. But, as Rep. Holt said, this growth and the policies that are driving it must be coordinated with our overall climate goals to ensure that it’s enough to drastically reduce our emissions.

If we can do this, we will be able to address climate change in a meaningful way while also improving the quality of life for people around the world.

(Credit: IBMSocialMedia)

One challenge that continues to hound solar power is the efficiency with which it converts sunlight into electrical power. Right now, that efficiency ranges from 10 to 30 percent, while much of the rest is lost as waste heat. But Swiss researchers associated with IBM have built a new solar dish, called the High Concentration PhotoVoltaic Thermal system (HCPVT), that tackles the waste heat problem by using it to generate fresh water.

The dish itself is covered in small mirrors, which concentrate sunlight on a small module of photovoltaic cells. That design puts the dish at the leading edge of efficiency, converting 30 percent of the received solar radiation into electricity and providing 25 kilowatts of power. But it also means the solar module faces an enormous concentration of heat. To keep it from melting, the HCPVT employs a liquid coolant system that IBM first developed for its high-performance computers, and that’s 10 times more effective than traditional passive air cooling.

The liquid keeps the solar cells operating safely at up to 5,000 times the normal solar concentration by drawing away the waste heat, after which the heated coolant is used to vaporize salty water in a desalinization system. As a result, the HCPVT is able to recover half the waste heat and put it to productive use.

According to IBM, the HCPVT is built from unusually low-cost materials, meaning the per area price of setting it up is significantly lower than comparable solar systems, as is the cost per kilowatt hour:

“We plan to use triple-junction photovoltaic cells on a micro-channel cooled module which can directly convert more than 30 percent of collected solar radiation into electrical energy and allow for the efficient recovery of an additional 50 percent waste heat,” said Bruno Michel, manager, advanced thermal packaging at IBM Research. “We believe that we can achieve this with a very practical design that is made of lightweight and high strength concrete, which is used in bridges, and primary optics composed of inexpensive pneumatic mirrors — it’s frugal innovation, but builds on decades of experience in microtechnology….

With such a high concentration and a radically low cost design scientists believe they can achieve a cost per aperture area below $250 per square meter, which is three times lower than comparable systems. The levelized cost of energy will be less than 10 cents per kilowatt hour (KWh). For comparison, feed in tariffs for electrical energy in Germany are currently still larger than 25 cents per KWh and production cost at coal power stations are around 5-10 cents per KWh.

Just one square meter of receiver area in the HCPVT system can provide 30 to 40 liters of drinkable water per day — about half the needed daily amount for the average person, according to the United Nations. The researchers think a large array of the dishes could produce enough fresh water to sustain a town. On top of that, the system can even provide air conditioning, using an absorption chiller rather than the standard compression chiller:

The HCPVT system can also provide air conditioning by means of a thermal driven adsorption chiller. An adsorption chiller is a device that converts heat into cooling via a thermal cycle applied to an absorber made from silica gel, for example. Adsorption chillers, with water as working fluid, can replace compression chillers, which stress electrical grids in hot climates and contain working fluids that are harmful to the ozone layer.

The prototype is being tested at IBM research facilities in Zurich, and the project was recently awarded a three-year, $2.4 million grant from the Swiss Commission for Technology and Innovation. The long-term vision is to build arrays in areas of southern Europe, Africa, the Arabic Peninsula, South America, Australia, and the southwestern United States — places that are remote, dry, and in need of both affordable sustainable energy and greater supplies of drinking water.

California, the state that the Hollywood film industry calls home, can boast 43,700 paying jobs in the solar industry in 2012, versus only 32,300 paid actors. Texas clocked in with 3,200 solar jobs, in comparison to the state’s 270 to 2,410 ranchers. And across the entire nation, 119,000 Americans were employed by the solar industry in 2012, versus only 87,500 by the coal mining industry.

All that’s according to the Solar Foundation (TSF), which compiled its 2012 survey of solar jobs in the United States several months ago, and just released the numbers via a new interactive map. That map also provides info on each state including solar jobs per capita, number of solar companies, number of solar-powered homes, and the legal status of third-party ownership.

The Solar Foundation’s announcement contains further details:

“In comparing our estimates with data from the Bureau of Labor Statistics, we find that California now has more solar workers than actors and that there are more solar jobs in Texas than there are ranchers. Economies of scale are also making our industry more labor efficient, requiring only one-third the number of workers to install a megawatt of solar today as it did in 2010,” [said Andrea Luecke, Solar Foundation Executive Director.]

The top ten states for solar jobs in 2012 were: California, Arizona, New Jersey, Massachusetts, Pennsylvania, Colorado, New York, Texas, Michigan, and Ohio. In comparing solar employment estimates from today’s release with previous state figures that examined solar jobs in only a few states, six states – California, Arizona, Pennsylvania, Texas, Colorado, and New York – are in the top ten for the third year in a row. Many of the highest-ranked solar jobs states are also those with the greatest cumulative installed capacity in the nation.

TSF’s work also determined that several of the top ten states — New Jersey, Massachusetts, Pennsylvania, New York, Michigan, and Ohio — actually rank in the bottom 30 percent of states in terms of available sunlight. The strong industry presence despite a seemingly unfavorable climate is thanks to “high electricity prices and favorable tax and regulatory policies” as CNN Money put it. Skeptics might consider that evidence of an artificial market created through government intervention, but then our national failure to properly price carbon emissions and natural capital is massively subsidizing non-renewable power in the opposite direction.

Other facts the Solar Foundation dug up included a 13.2 percent job growth rate in the solar industry from 2011 to 2012 — which added almost 14,000 jobs — versus a mere 2.3 percent growth rate in the overall economy. 86 percent of those were 14,000 were entirely new jobs, as opposed to previously existing positions that simply added on solar components. And finally, another 17.2 percent job growth rate is expected in the industry for this year, meaning another 20,000 jobs.

(h/t: CNNMoney)