The Future of Solar Economics and Policy

Environment

john-farrell
  • T H E F U T U R E O F S O L A R F R O M S M A L L - T I M E A N D S U B S I D I Z E D T O E C O N O M I C A L M A I N S TA Y O F A D E M O C R A T I C G R I D John Farrell Director of Democratic Energy April 2014
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E C O S T O F S O L A R FA R E X C E E D S I T S VA L U E A N D T H E R E TA I L E N E R G Y P R I C E T H E PA S T Value of solar energy (MN, 2014)
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L T H E PA S T Value of solar energy (MN, 2014) T H E C O S T O F S O L A R FA R E X C E E D S I T S VA L U E A N D T H E R E TA I L E N E R G Y P R I C E
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R Value of solar energy (MN, 2014) TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L T H E PA S T T H E C O S T O F S O L A R FA R E X C E E D S I T S VA L U E A N D T H E R E TA I L E N E R G Y P R I C E
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E C O S T O F S O L A R , VA L U E O F S O L A R , A N D R E TA I L E N E R G Y P R I C E A R E A L L S I M I L A R P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R M I N I M A L S U B S I D I E S N E E D E D T H E C O S T O F S O L A R , VA L U E O F S O L A R , A N D R E TA I L E N E R G Y P R I C E A R E A L L S I M I L A R
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E F U T U R E P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R T H E R E TA I L E N E R G Y P R I C E I S H I G H E R T H A N T H E VA L U E O F S O L A R , I T S E L F H I G H E R T H A N T H E C O S T O F S O L A R M I N I M A L S U B S I D I E S N E E D E D
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E F U T U R E P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R VA L U E O F S O L A R I S S U F F I C I E N T T O C O M P E N S AT E S O L A R P R O D U C E R S M I N I M A L S U B S I D I E S N E E D E D T H E R E TA I L E N E R G Y P R I C E I S H I G H E R T H A N T H E VA L U E O F S O L A R , I T S E L F H I G H E R T H A N T H E C O S T O F S O L A R
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy VA L U E O F S O L A R A L O N E I S S U F F I C I E N T T O C O M P E N S AT E S O L A R P R O D U C E R S T H E F U T U R E R E TA I L R AT E C O M P E N S AT I O N ( N E T M E T E R I N G ) E X C E E D S VA L U E O F S O L A R P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R T H E R E TA I L E N E R G Y P R I C E I S H I G H E R T H A N T H E VA L U E O F S O L A R , I T S E L F H I G H E R T H A N T H E C O S T O F S O L A R
  • F U T U R E P O L I C Y P R I N C I P L E S • Democracy: energy policy should encourage broad ownership of energy production. • Equity: subsidies should be accessible (not tax-based) but progressive (funded from non-regressive sources), and phased out over time. Producing local renewable energy should be reasonably profitable. • Local: policy should encourage communities to maximize capture of their energy dollars with conservation, energy efficiency, and local power generation.
  • F U R T H E R R E A D I N G • Report: Minnesota’s Value of Solar (ILSR, 2014): www.ilsr.org/minnesotas-value-of-solar/ • An Enormous Question for ‘Solar Choice’: www.ilsr.org/enormous-question-solar-choice
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In the near future, solar energy will become remarkably cost effective relative to its value to the electric grid and particularly to the retail energy prices paid by consumers. Will existing distributed generation policy still work in an era of cost-effective solar?
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  • T H E F U T U R E O F S O L A R F R O M S M A L L - T I M E A N D S U B S I D I Z E D T O E C O N O M I C A L M A I N S TA Y O F A D E M O C R A T I C G R I D John Farrell Director of Democratic Energy April 2014
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E C O S T O F S O L A R FA R E X C E E D S I T S VA L U E A N D T H E R E TA I L E N E R G Y P R I C E T H E PA S T Value of solar energy (MN, 2014)
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L T H E PA S T Value of solar energy (MN, 2014) T H E C O S T O F S O L A R FA R E X C E E D S I T S VA L U E A N D T H E R E TA I L E N E R G Y P R I C E
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R Value of solar energy (MN, 2014) TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L T H E PA S T T H E C O S T O F S O L A R FA R E X C E E D S I T S VA L U E A N D T H E R E TA I L E N E R G Y P R I C E
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E C O S T O F S O L A R , VA L U E O F S O L A R , A N D R E TA I L E N E R G Y P R I C E A R E A L L S I M I L A R P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R M I N I M A L S U B S I D I E S N E E D E D T H E C O S T O F S O L A R , VA L U E O F S O L A R , A N D R E TA I L E N E R G Y P R I C E A R E A L L S I M I L A R
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E F U T U R E P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R T H E R E TA I L E N E R G Y P R I C E I S H I G H E R T H A N T H E VA L U E O F S O L A R , I T S E L F H I G H E R T H A N T H E C O S T O F S O L A R M I N I M A L S U B S I D I E S N E E D E D
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy T H E F U T U R E P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R VA L U E O F S O L A R I S S U F F I C I E N T T O C O M P E N S AT E S O L A R P R O D U C E R S M I N I M A L S U B S I D I E S N E E D E D T H E R E TA I L E N E R G Y P R I C E I S H I G H E R T H A N T H E VA L U E O F S O L A R , I T S E L F H I G H E R T H A N T H E C O S T O F S O L A R
  • $0.00 $0.10 $0.20 $0.30 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Value of solar energy Retail (net metering) rate Cost of solar energy VA L U E O F S O L A R A L O N E I S S U F F I C I E N T T O C O M P E N S AT E S O L A R P R O D U C E R S T H E F U T U R E R E TA I L R AT E C O M P E N S AT I O N ( N E T M E T E R I N G ) E X C E E D S VA L U E O F S O L A R P R E S E N T Value of solar energy (MN, 2014) T H E PA S T TA X PAY E R - F U N D E D S U B S I D I E S M A D E S O L A R E C O N O M I C A L S O L A R C U S T O M E R S P R O V I D E D M O R E VA L U E T O G R I D T H A N T H E Y G O T PA I D F O R T H E R E TA I L E N E R G Y P R I C E I S H I G H E R T H A N T H E VA L U E O F S O L A R , I T S E L F H I G H E R T H A N T H E C O S T O F S O L A R
  • F U T U R E P O L I C Y P R I N C I P L E S • Democracy: energy policy should encourage broad ownership of energy production. • Equity: subsidies should be accessible (not tax-based) but progressive (funded from non-regressive sources), and phased out over time. Producing local renewable energy should be reasonably profitable. • Local: policy should encourage communities to maximize capture of their energy dollars with conservation, energy efficiency, and local power generation.
  • F U R T H E R R E A D I N G • Report: Minnesota’s Value of Solar (ILSR, 2014): www.ilsr.org/minnesotas-value-of-solar/ • An Enormous Question for ‘Solar Choice’: www.ilsr.org/enormous-question-solar-choice
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