How Can the U.S. Solar Industry Meet Expectations? Part 4

    October 27, 2011 3:56 PM by Renewable Energy World
    Mike Hall, CEO - Borrego Solar Systems, Inc.

    We need to push for Renewable Portfolio Standards (RPS or RES) at either the state or federal levels. These standards need to come with real teeth in the form of penalties for non-compliance. While solar and other renewable sources are already becoming competitive with fossil fuels the fact is that as a result of excess capacity overall demand for power is not increasing in most states. There is excess power available to utilities. Unless there is a mandate to purchase renewable energy adoption will be slow, and growth will be inhibited.

    The current system of net metering that has been used in the majority of U.S. projects is incredibly inefficient. It drives developers to locate PV systems on owner-occupied buildings with high electricity rates - unfortunately these locations are usually expensive. The prime sites for solar are large industrial rooftops, but these are rarely owner-occupied and usually come with industrial utility rate schedules. Industrial rate schedules are not solar friendly as they are demand heavy and light on energy charges. We need to have solar policies that drive the industry to install at the most cost effective locations.

    The industry needs to increase our batting average and simplify the landscape. The majority of announced solar projects either never get installed or fall years behind schedule due to finance, environmental or entitlement issues. Our batting average should be much higher than wind or other technologies that have significant transmission, interconnection and environmental challenges. Unfortunately the vast majority of announced utility solar PPAs are far from commencing construction. There are too many developers and technology providers promising too much. We need to work with the utilities to develop processes and systems that distill the industries development pipeline down to the most viable projects.

    Mike Hall currently serves as Chief Executive Officer (CEO) and board member for Borrego Solar. Mike has led the company’s development of a number of new service offerings including: integrated power purchase agreements, consulting services, and utility scale project development.

    Jeremy Goertz, Renewable Energy Leader - Stantec

    Stability in policy is critical to success in the development of solar projects. With consistency and stability in policy planning and development, the industry can focus on the most economically viable projects and ensure that capital is being deployed efficiently.

    Project development should be executed through working relationships with firms that have extensive experience in solar project delivery, which will ensure efficiency in delivery and help in reducing long-term costs. This is especially important where utility involvement and environmental permitting are critical to project success. By leveraging past experience, organizations can ensure that risk is mitigated throughout the design and permitting of solar projects.

    Scale is critical to success. It will drive further efficiency and economies of scale into all projects. Without scale the true market participants will lose interest and invest in other growing markets. The scale of projects also needs to be appropriately channeled towards those markets that will see the greatest return. Large-scale projects that can be deployed close to load centers and in areas with high irradiation will drive early-stage growth.

    Jeremy Goertz, MBA, MMSc., PMP is a Renewable Energy Leader for Stantec and has been working with renewable energy projects for more than 3 years. Beyond supporting project deployment Jeremy also supports the development of renewable energy business for Stantec both in Canada and the US.

    Lisa Frantzis, Managing Director - Navigant

    Energy storage and smart grid technologies can help transform PV from a variable energy source to a strategic grid resource. Development and demonstrations are underway to understand how energy storage systems can work with PV systems to firm its output, shift customer demand, and help maintain distribution reliability and power quality. Along with technology development, utilities and their regulators need to explore new approaches to electricity pricing that reflect the actual costs and benefits of PV-storage systems.

    Approximately 10 states currently have renewable portfolio standards (RPS) with solar or distributed generation carve outs. Given the Federal crisis, low priced shale gas availability and low or decreasing utility load growth, several states are pushing back and trying to reduce RPS targets. It will be important for the solar industry to continue to push for non-compliance penalties. The industry should also demonstrate the value and benefits of solar PV so utility companies and regulators do not question its value and reduce RPS targets.

    Providing additional analytical support for grid integration will be very important over the next five years. The solar industry needs to work with utility companies, grid operators and regulators to help them better understand and assess the impact large amounts of PV have on the grid. At larger penetration levels (starting between 5-15%), utilities are likely to get concerned about cost impact. There is limited data on how large PV penetration might impact voltage, generation dispatch and general grid reliability.

    Ms. Frantzis is a Managing Director with Navigant responsible for Renewable and Distributed Energy. With more than 25 years of experience in renewable energy, her expertise includes wind and solar energy technologies and markets, renewable energy due diligence reviews, renewable business strategies, executive visioning, technology road-mapping, renewable energy policy and program development, and renewable energy program impact assessment.

    Naresh Nigam, CTO - Sanmina-SCI

    One of the important factors in reducing the total cost of solar energy is standardization. Currently there are no industry standards for panel sizes, connectors, brackets, inverters and other balance of system (BOS) components. Large multi-national companies are not providing installation services seen in large construction projects. The solar industry should emulate other industries like the PC industry, which has reduced cost significantly by standardizing hardware specifications. For example, if every light bulb manufacturer had their own socket then the cost of the bulb, installation parts and labor would be outrageous.

    We need to invest in increased transmission capacity. Once power is generated during peak-hours, it either has to be stored or fed into the grid. Commercial level storage technologies only exist with utility companies. The grid in U.S. is old and in most cases running at capacity, and a new large solar farm may not be able to feed into the grid.

    The financing model for commercial and utility grade installations must evolve. Power generation equipment degrades, and currently there is no insurance industry to protect the manufacturers against that. Most solar manufacturers provide around a 20-year warranty on their products, but it is not practical for a manufacturer to keep a reserve for repair for this period. Solar financing and liability insurance is in the very early stages.

    Naresh Nigam is CTO of Sanmina-SCI, a leading manufacturer of some of the world’s most valuable and complex electronic and mechanical products. After receiving a Masters in Computer Engineering from Pratt Institute, Mr. Nigam has held senior executive positions in leading technology companies and been a successful entrepreneur.

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