Last year was a banner year for solar power. From China to the United States, more solar power was connected to the grid than ever before. China installed more solar capacity than it has in all previous years combined. In just one year it installed an estimated 12 gigawatts of power to its grid, more than any country ever has in the history of solar energy. To put it in perspective, this is more than the entire current solar capacity of the UK.
Most of the new installations are for large scale projects that generate power for tens of thousands of people. Coal still remains the main source of energy for the country, but high levels of pollution have pushed the country into increasing the amount of renewable clean energy as power sources. The ultimate goal is to no longer use coal as a primary power source.
China credits the lower cost of the solar cells (photovaltaiks) used to convert sunlight to electricity, referred to as PVs. The cost of PVs has been the biggest obstacle for many solar power companies to be profitable. For this reason China subsidizes much of the cost of PV production. Large government subsidies are credited for making Germany the current leader in solar power.
The U.S. also reached a major milestone last year by surpassing Germany in the amount of solar power added to the grid. Unlike China, however, most of the U.S.’s increase has come from more Americans installing solar panels on their homes. Federal and state governments have offered many tax incentives to companies and individuals to encourage the use of rooftop-energy.
It is estimated that a new solar project is installed once every four minutes.
Thus far the focus has been on large scale solar plants, many of which are just starting to come online, due to state mandated Renewable Portfolio Standards (RPS). These standards require utility companies to have a certain percentage of their power from renewable sources. California has been the leader, successfully meeting the 20 percent standard by 2010. They have set a new target of 33 percent, which is to be met by 2020. Thirty states currently have these requirements.
The push toward clean energy has been met with resistance from utility companies and conservatives. Both groups are following a game plan laid out by American Legislative Exchange Council (ALEC), the Koch brothers led advocacy group. The group has spent the past couple of years trying to stop RPS by introducing legislation to block or roll back the standards. Thus far their efforts have been stymied due to popular support for renewable energy and the economic boost provided by the investment.
After unsuccessful attempts to repeal RPS, they have set their sights on a new target: homeowners.
As more utility companies reach their renewable energy targets, it is believed that large scale solar projects will decline as solar production will reach capacity. Companies are now focusing on smaller scale projects to put more solar power into the grid. This is why residential installation is considered the future of solar power.
This is making some powerful factions very uncomfortable.
Now that solar power is becoming more affordable for individuals via rooftop installation, traditional energy industries are feeling the threat. Investor heavy utility companies are also worried about their profits taking a dive. These factions are represented by ALEC, which is setting the tone for the new fight expected to ramp up this year. The message is that these homeowners are “freeloaders” and are not paying for an energy grid they are using. This, of course, ignores the fact that the energy consumed for their use never touches the grid.
The first tactic is to stop rooftop installation.
In the U.S., state governments use net-metering policies to subsidize the installation of solar power. Customers receive credit for all solar power used in excess of what they use, which is put back into the grid for use by the electric company. They essentially are selling back the power produced to the utility company at the same rate they are paying for electricity. Currently 43 states have net-metering policies.
The net-metering policies in many states are under attack by utility companies. They claim that even though they aren’t producing the energy used by residential installation, the credits given to them takes money away that would go into maintaining the grid that delivers the power. Furthermore, they claim, non-solar power customers must make up the cost of this, making their utility bills higher. This has led for a push for new legislation – as proposed by ALEC.
It is true that the less money people pay the utility companies, the less money there is for them to use, though how much they are losing is under dispute. The battle now is where the cost shifting is to occur. Arizona recently approved a $5 dollar surcharge for customers with new solar power installations, far less than the $100 surcharge the Arizona Public Service originally sought. Other states are currently reviewing legislation. California has kept net-metering in place, but have set the stage for an upcoming battle in three years to set policy on how solar power customers to be charged.
However, that isn’t enough for ALEC.
In the end, the goal is to make solar power so cost prohibitive for individuals that most will not be able to afford to use it, shifting all solar power sourcing back into the control of the utility companies.
That way they can control the price – and their profits.
Photo credit: Thinkstock
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