What is stopping many Americans from investing in distributed solar power? The price. Why invest in an installation when the end product will not produce a cheaper form of energy than the average energy grid? Avoiding the numerous environmental and social reasons, this is a major concern for Americans. According to a recent study, though, over 40 million Americans in the sixteen largest metropolitan areas of the U.S. could reach or even beat grid prices with solar energy!
The study looks at three different rate design styles, time-of-use pricing, tiered pricing and off-peak flat rate (take a look at the chart here). In order for distributed solar power to reach grid parity, it is necessary to offer time-of-use pricing. There also must incentives in place, "including federal accelerated depreciation (for commercially-owned systems) as well as state and utility incentive programs. These programs substitute taxpayer dollars for ratepayer ones, making the cost of solar to the grid lower."
The rate design is extremely important in regards to consumer behavior. As Rob Miller of Genability points out, the Lawrence Berkeley National Laboratory released a report in April 2010 analyzing the impact of rate design and net metering on bill savings for distributed PV in California. This report emphasizes the belief that rate design affects which form of energy people choose. Net metering also plays a vital role.
ISEA discussed net metering earlier in more detail, and raising the net metering cap from 1-2 MW is on ISEA's 2011 policy goals. Fortunately, HB 1913, which raises the retail net metering limit for solar and wind power from 40 kW to 2 MW AC and increases the peak limit from 1% to 5%, has passed the House Public Utilities Committee and is now in debate! This means that Illinois is on the right track to grid parity.
With incentives in place and improvements in net metering, what else is needed? Rate design. We need a consistent, reliable rate design that will support renewable energy. As grid parity is becoming more reachable and installation prices continue to drop, solar distribution is becoming a real option for many Americans!
What other outreach or policy implementations do we need in order for Illinoisans to consider solar energy as a viable option? We want to hear from you! Join the discussion on our LinkedIn page.