The year Two Thousand and Nine ended on, if not a high note, at least a hesitant quaver somewhere above middle C. After long years of repressing the value of solar energy and energy conservation through a scheme of regressive economic machinations, the statement from a utility executive in our nation’s sunniest state that “[the highest-consumption customers] drive our costs more”, is a welcome admission.
What orchestration might carry and continue that melodic line is only one of many challenging puzzles that must be solved in Twenty Ten. Here is the Rate Crimes current list of brain busters:
- The repressive rate schedules and the hidden, regressive taxes they create.
- The lack of performance requirements for solar modules in the U.S. market. The increasing risk of substandard modules threatens the solar industry’s domestic reputation.
- The solar industry’s reliance on incentives; especially when those incentive programs are regressive and catalyze further questionable market schemes.
- The education of a rapidly growing solar workforce. So far, the creation of a professional workforce has been haphazard, at best.
- Inadequate industry stewardship and oversight.
What do you think? Would you propose a different order of importance? What’s missing?
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Lack of nationwide attention to those five problems? They are all (partially) governance problems. But the one this blog is most concerned with, puzzle number 1, is, in my opinion, hardest for a government to tackle or to make a positive difference in. It's also a very important problem: not to elaborate further, just read other posts on your blog.
ReplyDeleteProblems 2, 4 and 5 are things the federal departments of energy and commerce, state officials, and industry associations, could have a hand in remedying through cooperation. I don't think they are big, hard problems. Developing standards and oversight are something that have succesfully occurred in similar industries.
Problem 3 is a real problem, but is not being rationally considered. It stems from, correctly, observing economic theory on the problems with incentives, but there is a lack of analysis and sober judgement on how distortive and damaging to the solar industry, or economy wide, these incentive programs really are. Just because you can identify a problem and partly quantify it, doesn't automatically make it a "big problem". In my opinion, we worry about these things too much because of a faddish, indulgent devotion to coffee-table libertarianism and other forms of shallow thinking.
crf, Thank you for your thoughtful and thought-provoking comments. My concerns with the rate schedules grew out of an observation that occurred many years ago when I first began designing energy systems in Arizona. Before the advent of net metering, the point of diminishing returns for investments in residential solar was reached with relatively small systems (less than 2kW and often less than 1kW).
ReplyDeleteThe situation for the commercial sector was far worse. Because of the structures of the rate schedules, the value of on-site solar energy and energy conservation in the commercial sector is very unpredictable. Yet, few understood these issues. Many systems were (over)sold based on misconceptions, and sometimes under false representation. Certainly, this is an unhealthy situation.
The solar industry has long struggled with thin margins because of a product that must compete with heavily-subsidized alternatives. Obviously, solar companies have little motivation to promote smaller solar energy systems – with their lower profit margins – in order to help their clients maximize their investment returns.
Today, because of the poorly designed incentive programs, we see relatively large systems being installed on relatively few homes and businesses. While this may please the more short-sighted in the industry, if the goal is to maximize the benefits to the community of the expenditure of their limited resources then smaller, more widely distributed systems should be promoted. The reasons for this are technological, economic, and social. A more efficient, equitably distributed, and widely visible solution should be a central goal.
The goal of Rate Crimes is to raise awareness of unattended issues, great and small, so that a sustainable future might be sooner realized.