Smart Policy in Moving Solar Forward

Smart Policy in Moving Solar Forward.

A 356-page report released in May by the Massachusetts Institute of Technology Energy Initiative (MITEI) suggests rapid deployment of solar energy capacity by 2050, is the best way to mitigate climate change concerns

The report suggests one terra-watt (TW) of solar capacity by mid-century is achievable by using current crystalline silicon photovoltaic (PV) technologies.  Solar energy produces only 1% of US and global electricity currently.

So what else can we do to get to 1TW by 2050?

MITEI’s analysis recommends that having strong public policy is critical in driving solar energy forward this century.

Without an effective policy, research and development into new technologies can’t advance, pricing won’t fall as fast, and moving towards a more sustainable economy becomes more challenging.

“What the study shows is that our focus needs to shift toward new technologies and policies that have the potential to make solar a compelling economic option,” said Professor Emeritus of Economics and Management Richard Schmalensee at the MIT Sloan School of Management to Computer World regarding the analysis. This includes improving R&D for thin-film photovoltaic in making solar energy more cost effective.

However, moving towards a universal renewable portfolio standard (RPS) is one policy aspect which jumped out from this report for me.

Renewable portfolio standards is a directive to advance energy from renewable sources. Solar, wind, biomass, geothermal are examples of renewable energy sources which have been used.

A majority of state governments, along with the District of Columbia, have RPS systems in place.

State RPS range in both percentages (10% to 30%) and time frames (2015 to 2030).

RPS can also have other requirements, where utilities in states must have more renewable electricity online than what is required overall. Xcel Energy in Minnesota requires 31.5% by 2020 from Xcel, while non-Xcel companies are required to have 21.5% renewables by 2020. Minnesota public utilities require a minimum of 1.5% coming from solar sources.

Thanks to a strong RPS, along with tax exemptions on property tax from owners who have solar panels, California has installed 10,695 MW of solar capacity.  By 2020 33% of all energy generated must come from renewables in the state.

RPS national standards are not uncommon. European Union has legislated requiring all members have 33% of its electricity and 20% of its energy from renewable sources by 2020. However, EU members can have more aggressive RPS policies in place.

National Renewable Energy Laboratory suggests when RPS are coupled with incentives (ITC or feed-in tariffs) they work well in work well together to increase renewables in jurisdictions.

However, the challenge in implementing a nation-wide RPS comes from opposition groups who oppose advancements in renewable energy policy, including the American Legislative Exchange Council (ALEC).

A uniform US RPS system is not likely feasible in the short term, due to continued opposition.  MITEI recommends current state RPS policies should not limit the layout of potential solar productivity to certain regions or states.

MITEI also suggests discarding the US solar investment tax credit (ITC) at the end of 2016 in favor of more efficient subsidies based on energy generation. This could correct inefficiencies caused with the current ITC, where kWh created from home PV systems receive greater subsidies than utility-scale PV solar power plants.

Overall, this report provides really thought-provoking suggestions on how law makers can create economically feasible policies to move solar energy forward, and help create a more sustainable world.