Through the Roof: Rooftop Solar in an Age of Standards

Bickering about the way forward for renewable energy developments has only heightened recently as federal, state and local interests align in support of cleaner energy sources.

California Gov. Arnold Schwarzenegger announced in November a 33 percent renewable portfolio standard by 2020. Currently, California’s Legislature is deciding whether to sign the standard into law to reduce greenhouse gas emissions.

The state’s utilities will need to produce 75 terawatt-hours (75 trillion watt-hours) of renewable generation to meet the standard, nearly triple the current capacity, according to the California Public Utilities Commission report, “33% Renewable Portfolio Standard: Implementation Analysis and Prel... Seven additional transmission lines will have to be built to transport clean energy to the coastal cities -- costing $12 billion.

“…California must start implementing mitigation strategies such as planning for more transmission and generation than is needed to reach just 33%, pursuing procurement that is not dependent on new transmission, or concentrating renewable development in pre-permitted land that would be set aside for a renewable energy park,” the California Public Utilities Commission (CPUC), which regulates the energy industry, wrote in its report released last week.


“With the lofty goals California has related to renewable energy, all avenues are needed to achieve them, including large-scale renewable projects that provide bulk deliveries and small-scale projects that don't produce a lot of volume but can be added during times when transmission is constraining the larger projects,” said Vanessa McGrady, a spokesperson for utility Southern California Edison.

But many experts believe large-scale solar, wind, geothermal and biomass power plants sited in rural desert areas are the only way to meet the standard.

The fault lines center on the siting of power plants and the transmission lines. Lately, energy producers and distributors and some environmentalists have focused much of their attention on open lands around Mojave National Preserve and Joshua Tree National Park.

Opponents of large-scale renewable plants and new transmission lines argue that tortoises and other wildlife, cactus gardens and scenic views would be threatened. Instead, they believe rooftop and building-integrated solar on existing structures are much more sustainable. The electricity could be used on site, thus eliminating power lines.


“…Remotely located industrial scale thermal solar projects … require massive amounts of water for steam, kill millions of acres of healthy intact ecosystem, reduce property values, require eminent domain and new long-distance transmission lines, and will cost the ratepayers more in the end,” said Jim Harvey, executive director of the Alliance for Responsible Energy Policy based in Joshua Tree.

“Point-of-use” renewable generation avoids all of these problems, according to Harvey. But a number of experts believe that rooftop solar alone would be simply insufficient in meeting California’s renewable goals.

The California Solar Initiative, which aims to put panels on one-million rooftops in the state, is set to generate 3,000 MW in the next ten years, or just 20 percent of what’s needed to meet the new standard.

“I’d sure like to see in-basin generation -- for instance, photovoltaics on rooftops … so we wouldn’t have to build all this transmission,” said California Energy Commissioner Jeffrey D. Byron. “But the reality is that photovoltaics are a great deal more expensive on rooftops -- probably on the order of three times as much as building the centralized power plants.”

The CPUC, in its analysis of the state’s options for meeting the standard, found that relying on rooftop distributed generation would cost 7 percent more than building large solar thermal plants.

Yet the costs of thin film and crystalline solar panels are dropping significantly --some experts predict more than 20 percent in 2009 alone.

Largely because solar is only producing energy when the sun is shining, a lot of solar panels (and thus a lot of land) are needed. “I can generate as much power from a natural gas power plant on 20 acres that takes six square miles for a concentrated solar photovoltaic power plant in the desert,” Byron said. There’s just not enough land in urban areas to produce a significant amount of electricity, according to critics of rooftop solar.

Jim Harvey counters this argument with a U.S. Dept. of Energy finding that 90 percent of America’s energy needs could be met with solar built on brownfields --the approximately five-million acres of abandoned urban industrial sites.

Feed-in Tariffs

Germany is the perfect case study in city-based residential and commercial solar, according to Harvey.

“In the 5 years since real feed-in-tariff legislation was enacted in Germany, over 5,000 MW of RT/BIPV [rooftop/building-integrated photovoltaic] capacity has been installed, and they are expected to top 10,000 MW added capacity by the end of 2011,” he said. “Germany is not known for its sunshine, but California is. We have twice the solar energy potential, so we have no excuse.”


Germany supercharged its renewable industry with very generous feed-in tariffs (FITs). The tariffs, which have been adopted in more than 40 countries, can make investments in renewable energy very attractive because guaranteed profits are locked in for about 20 years. Generally, government regulates the right amount of profit beyond generation costs that will drive development. The extra costs utilities pay for renewable energy are eventually passed on to ratepayers.

European tariffs cater to small producers as well as large ones, with payments based on the project‘s size, technology and energy quality. Unlike net metering (used in the California Solar Initiative), which provides credits for excess generation sent to the grid, FITs pay for the entire energy output and thus provide more profitable incentives.

“It is the Governor and our lawmakers in Sacramento that are holding RT/BIPV solar potential in California to 3,000 MW,” Harvey said. “…It [the California Solar Initiative] restricts home and business owners from installing solar systems larger than needed to zero out their energy needs, thereby discouraging surplus point-of-use solar supplies.”

The renewable energy standard model, which is prevalent throughout the United States, favors utilities that negotiate energy costs with large producers in order to meet quantity goals. The National Renewable Energy Lab. found that the U.S. model could be more expensive because of the increased costs of developing proposals, reviewing bids and sorting out contracts.

“Experience in Europe is beginning to demonstrate that due to the stable investment environment created under well-designed FIT policies, renewable energy development and financing can happen more quickly and often more cost-effectively than under competitive solicitations,” NREL wrote in its March report, “Feed-in Tariff Policy: Design, Implementation, and RPS Policy Inte...

FITs are starting to gain more interest in the United States. Gainesville, Fla. closely modeled its FIT policy after those of European nations. It provides a 5-6 percent profit beyond the cost of generation. The rate is $0.32 per kWh for 20 years, according to the Gainesville Regional Utilities Web site. California has a FIT program based on utilities’ avoided costs from fossil fuel emissions rather than the actual costs of generation. This style of FIT has proven to be less successful than the European programs, the NREL report said.

Southern California Edison

Southern California Edison purchased 80 percent of the solar energy produced in the United States in 2008, according to the company’s Web site. Yet its solar capacity was 356 MW (730,712 MWh) last year, or about 3.5 times less than its wind capacity. (The company’s residential rooftop solar does not count toward its renewable portfolio standard because it is “very small in scale,” according to SCE spokesperson Vanessa McGrady.)

The company contracted with FirstSolar to install more than 33,000 solar panels on a warehouse rooftop in Fontana, Calif. The project now generates 2 MW, enough to supply 1,300 households. Nearly 17,000 panels are being installed on a commercial rooftop in Chino, Calif. The solar modules are connected to the nearest neighborhood circuit, eliminating the need for new transmission lines.

This is part of a five-year effort by SCE to install millions of solar panels on 150 Southern California commercial rooftops, which could generate 250 MW. If approved by the California Public Utilities Commission, the company expects the project’s capacity cost per installed watt to be $3.50, or about 20 cents per kWh.

Meanwhile, SCE contracted with BrightSource Energy in February to build a series of seven solar thermal plants generating 1,300 MW, subject to regulatory approval. The first plant would be built in Ivanpah (in Mojave National Preserve) and could start producing electricity in 2013. The plants will conserve water by air-cooling boiler steam in a closed cycle.

This week, SCE signed contracts to get up to 726 MW of renewable energy from two solar thermal trough plants in Blythe and Ridgecrest, Calif. (near Death Valley and Joshua Tree National Parks), if given CPUC approval. These projects could come online in 2013 and 2014. SCE also has contracts for up to 234 MW of wind power in central Oregon and southeastern Idaho set to come online next year.

The major road blocks to large solar, wind, geothermal and biomass projects in California’s deserts are federal and state approval for siting new power plants and transmission lines.

“SCE already has enough contracts in place to deliver 20 percent or more of renewable energy to customers, but because of insufficient transmission, these deliveries will not occur until beyond 2010,” Vanessa McGrady said.

Residential and commercial rooftop solar often can be put into service more quickly.

“Palm Desert residents and business owners who received AB 811 loans for rooftop solar installs in November 2008 already had their solar systems installed and saw their meters turning backwards by February 2009,” said Jim Harvey. “In the meantime, most of the industrial scale solar projects that were applied for as early as 2006 are still in the approval process.”

AB 811 authorizes low-interest loans (to be paid over 20 years) for energy efficiency improvements to California homes and businesses.

Future Prospects

The California Public Utilities Commission found in its report that the state will be hard-pressed to meet the 33 percent standard by 2020.

“The magnitude of the infrastructure that California will have to plan, permit, procure, develop, and integrate in the next ten years is immense and unprecedented,” CPUC wrote.

The state is likely to be at least a year behind schedule in meeting the target, even without any setbacks.

The report estimates the required investment in infrastructure to be about $115 billion by 2020, which is daunting considering the state’s current budget crisis and a faltering economy.

Using wind resources -- from throughout the West and the Mexican state of Baja California -- instead of solar thermal -- to meet the target would result in a cost savings of more than $1.5 billion, CPUC said.

But siting the transmission lines to import clean energy from other states or countries could garner enough public opposition to impede progress on meeting the state’s renewable goals.

CPUC will come out with its final report at the end of 2009.

[A condensed version of this story was published by the California Energy Circuit. ]