Solar Energy: Gearing Up to Deploy

Last week I attended the Department of Energy’s Solar Boot Camp at its National Renewable Energy Lab (NREL) in Golden, CO.  The 3-day intensive training was held for the energy staff from those organizations that support state officials.

According to Nobel Laureate, Richard Smalley, the planet’s number one problem for the next half-century is energy.  For the U.S., traditional resources (coal, natural gas, and even uranium for nuclear power plants) face supply-side challenges, especially as global competition for these resources grows, and as they become more difficult to extract, thus resulting in higher costs.  And since the U.S. is the second most energy-intensive industrialized nation in the world after Canada, that means we’re going to continue requiring a substantial amount of energy, even with energy efficiency measures in place.

All of this makes solar resources—such as photovoltaics (PV) and concentrating solar power (CSP) -- more appealing since a diverse energy portfolio will moderate price spikes due to the supply constraints of other resources.  Currently, however, NREL estimates that solar is 2-5 times more expensive than traditional fossil fuels.  Though the more prevalent solar becomes the cheaper it gets (at a rate in accordance with its speed of adoption).  And though solar currently generates only a fraction of our country’s total electricity output (approximately .1%), PV installations grew by 38% from 2008-2009, according to DOE financial analyst John Bartlett, and are expected to continue to grow at an accelerated rate.

State policies such as renewable portfolio standards with solar set-asides (which require that a portion of renewable generation come from solar) and Feed-In Tariffs (FIT) can help advance solar market penetration.  And financial incentives and programs such as tax credits, PACE (property assessed clean energy), and innovative leasing agreements, encourage solar adoption by reducing or negating the need for costly capital outlays.

As solar continues to grow, it will become more important to address storage solutions, interconnections with the grid, and transmission.  CSG will explore these issues and the role of state policymakers in addressing them in a forthcoming issue of Capitol Research.