Here comes the sun

California and New Jersey have high numbers of PV installations

Posted by Joseph Romm (Guest Contributor) at 11:57 AM on 31 Jan 2008

Read more about: California | New Jersey | energy | renewable energy | solar voltaic power

The following essay is a guest post by Earl Killian.

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California PV installations Cooler Planet looked at the solar photovoltaic (PV) installation data from the California Energy Commission and made it visual to show just how it is growing. A static view of their data is at the right, but go to the site and move the slider to see the growth from only 1,675 grid-connected photovoltaic installations in 2002 to 29,628 installations in 2008. According to SolarBuzz:

In 2006, 112 megawatts of solar photovoltaics were installed in the US Grid Connect market, up from 80 megawatts in 2005. Demand was led once again by California, which accounted for 63% of the national market. Notwithstanding funding program bottlenecks, New Jersey saw very strong growth in 2006, representing 17% of the national market.

Why would California and New Jersey, with only 12 percent and 2.9 percent of U.S. population respectively, account for such a large fraction of PV installations? Perhaps incentive programs (most recently the California Solar Initiative and the New Jersey Clean Energy Rebate Program) and other policies are working.

Internationally, Germany (8.8 x U.S. in 2006 MW installed) and Japan (2.6 x U.S.) (PDF) are the leaders in PV installations, with California a "distant third" (PDF) according to Lawrence Berkeley National Laboratory.

Most places where PV is economic have some combination of the following (but usually not all):

Efficient use of energy, e.g. California, New Jersey, Japan, and Germany (but much of the U.S. is inefficient). Efficiency is cheaper than PV, so it pays to do that first. If you're already efficient, PV may make sense.
High retail electricity rates (E.g., California, New Jersey, and Japan, maybe Germany. Note: high rates do not mean high bills. California's are about the same as the rest of the nation because of efficiency).
Rebates/incentives (e.g., California, New Jersey, and Japan).
Time of use (TOU) net metering available (e.g., California, probably others). With net metering, your electric meter runs backward when you generate more than you use, and runs forward other times. With TOU, the rate you pay or receive varies by time of day, typically with afternoon rates much higher than other times, reflecting the much higher cost of electricity to utilities during times of heaviest load.
High insolation (e.g., California, but definitely not Germany or New Jersey).
Financing (e.g., home equity loans in the U.S., "soft loans" in Germany), so that PV is profitable in the first month instead of requiring multiple years to break even (the payment on the equity loan should be less than the cost of the electricity purchases avoided).

Three other points probably help to avoid utility hostility:

Decoupling (the idea that utility profits are not tied to revenue, since customer PV reduces utility revenue).
Significant excess daytime load over nighttime (since PV avoids the need for costly "peaking" power plants).
Renewable Portfolio Standards (e.g., Germany, Japan, and California) that mandate certain percentages of renewable energy.

Of the various items, incentives (#3) are helpful, time of use net metering may be the most important. For example, under PG&E's E-7 rate (PDF) for PV, one can sell PV electricity back to the grid during peak hours at $0.30/kWh, and then buy it back off-peak at $0.09/kWh. That factor of three makes a difference.

Imagine a map such as the above for the whole nation if Dick Cheney had favored PV incentives instead of coal power plant incentives after his infamous secret energy summit.

Perhaps some of our New Jersey readers can tell us about the New Jersey Clean Energy Rebate Program.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.

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1 Comment | Post a Comment

Effectiveness in rebates

I worked in PV design and sales from 2001-2005, so I lived through the explosion that this map depicts. (It's fascinating to see that the ramp-up really was as fast as it felt during that period.) I can tell you with 100% confidence that the industry lived and died by two things:

The rebate program: This was key, because without it the systems did not pay back quickly enough to be attractive to any but the rich-and-guilty. The level of the rebate was important, but equally important was the continuity of the rebate program. During those years, the rebate fund required reauthorization basically every year, so each year there was alot of uncertainty that our industry would continue to effectively exist. There was also a period of about 3 months in which the rebate program was spent out and wasn't taking new reservations. That was a tough time, because alot of small outfits suddenly found that they had no revenue. Fortunately, that period didn't last any longer than it did. If it had, the growth of solar would have been badly set back.
Full retail price net metering. This is as important as the rebate, and wasn't explicitly mentioned on the list above. There are a number of utilities throughout the country that will allow you to connect a PV system and will credit your bill for excess production. However, most of them credit you at the wholesale rate (i.e. what they pay to their regular generators) rather than the retail rate (which is what the consumer pays). The retail rate includes transmission and distribution costs, and is about twice or more the wholesale rate. Since surplus grid-connected PV energy is generally consumed very near the point of generation (e.g. the house next door, that doesn't have solar), it makes sense to credit the producer for the retail price -- unlike the big central generators, they are not relying heavily on the full T&D infrastructure. It's also essential to the economics of the system. Time of Use metering is a nice extra benefit, but it's not nearly as important as the basic notion of getting credited for surplus power at the retail rate.

by GreenEngineer at 12:23 PM on 31 Jan 2008

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