There are no “easy fixes” to transforming our energy system. But the solutions that may work fastest are often the simplest and least exciting: rate structure changes, streamlined permitting, and good interconnection laws.
Below, I will outline four big ideas that can move us toward an electricity system with higher penetrations of clean, distributed energy. This is not a comprehensive list, but it encompasses the “must dos” for driving distributed generation.
1. Solar PV: Siting, Permitting, and Fees — Oh My!
The Problem: Cheaper solar equals more solar. So why is it that, despite paying record low prices for PV modules in recent years, America lags so far behind countries like Germany in total installed PV capacity?
The answer, as a Lawrence Berkeley National Lab study shows (and David Roberts at Grist explains well here), is that the “soft costs” in the U.S. are far higher than in places with high penetration like Germany. Soft costs include siting and permitting regulations, taxes, and fees on solar PV which make installation much more expensive.
The Fix: Streamline the siting and permitting process and do away with pesky fees. Solar Communities has done some great work here, and while I think their 12 point plan is dead on, I’ll narrow it down here to four simple steps.
First, scrap the permitting fee on PV installations. That’s an average of 44c/W leveled out right there. Second, use a standard permit (preferably electronic) and specify the timeframe for approval. Third, cap the total permitting costs (cutting sales tax will help much here). Fourth, streamline inspections by offering an inspection checklist and narrowing the timeframe for inspections.
The Fight: This is not a battle between fired-up solar installers and evil regulators determined to quash the rise of PV. The challenge is standardization of something new, and bringing cities and installers together to communicate on what is needed in different places. Sharing best practices and success stories will help much.
Who can make it happen? With the exception of sales tax, which is a state issue and requires the state legislature to approve any exemptions, the remainder of the changes can happen at the local and municipal level with City ordinances.
2. Making Connections: Interconnection Laws to Hook Up PV Systems
The Problem: So you have your solar system up on the roof. Now what? Enter interconnection rules, which determine what can and cannot be hooked up to the electrical grid. Without rules that allow all renewable energy systems that meet safety standards to be plugged in without restriction, there is little incentive for distributed generation to take root. As it stands, 24 stateshave poor, harmful, or non-existent interconnection policies.
The Fix: Do everything in the Interstate Renewable Energy Council’s great little book on model interconnection policies. What’s that? You don’t want to read a 50 page report on interconnection? Surprised as I am, I will summarize the core recommendations and their rationalehere.
First, states should clarify interconnection rules to make it known that third-party ownership of facilities is permissible and not subject to heavy regulation. This allows an outside party to own the system and sell electricity to the homeowner without a) violating the enforced utility monopoly and b) being subject to intensive commission regulation.
Second, raise the Level One cut-off to 25 kW. Level One applicants are subject to simplified procedures, since they are considered low-risk to the grid. Currently, most States consider 10 kW the cut off for you to be considered a Level One applicant, since when the rules were passed 10 kW was all most utilities could handle. Now, they have much more experience with distributed generation, so they can reasonably handle larger amounts of energy (up to 25 kW). Along these lines, interconnection rules should bump Level Two applications up to 2MW and Level Three applications up to 10 MW.
Third, allow applications to be electronically delivered by this new-fangled communications system called e-mail. A lot of applications still need to be hand delivered or done via post, which is a pain.
Fourth, improve dispute resolution by appointing a technical master who can act as a mediator instead of dragging small-time PV owners through the utility bill dispute process in the commission.