Sunshine on Recent Solar Policy News

Throughout the fall, two states have quietly made adjustments to laws and regulations affecting solar net metering customers and facilities. Meanwhile, both sides in the “Suniva solar trade war” have retained competing loud voices. How will these developments support consumers’ need for a smarter way forward when it comes to solar policy?

PACE reported this summer on North Carolina’s H.B. 589, although we primarily focused on its unwarranted 18-month moratorium on wind generation. The new law also updated the state’s solar legal framework, including allowing residential solar customers to lease panels rather than assume the often expensive, lengthy burden of owning the panels outright.

Other key provisions of H.B. 589 impact “universal” solar, including modernizing PURPA implementation. On October 11, the North Carolina Utilities Commission (NUC) issued a significant order. More small projects can now qualify, but standard contract terms can be shorter. Most importantly, the NUC order seems to allow more frequent and accurate calculations of avoided costs, taking natural gas actual costs into account. 

North Carolina’s steps forward should lower costs for consumers, while making it easier for all three forms of solar generation (private, community and universal) to continue growing in the state, already a national leader in renewable generation.

Out West, Utah’s protracted solar regulatory battle entered a more peaceful phase. The Public Service Commission of Utah approved a settlement agreement that grandfathers existing private solar customers until 2035, and establishes a transitional program beginning in November 2017. Over the next three years, the state’s largest utility will present evidence to allow the PSC to examine the value of rooftop solar.

Advocates in the “Suniva” Federal Trade Commission case concerning inexpensive Chinese solar panels and impacts on U.S. manufacturing facilities ramped up outreach efforts. The “no-tariffs” side hired Sean Hannity, while the “save domestic solar” camp brought on Laura Ingraham.

Hopefully, the FTC will give more weight to last week’s announcement that yet another U.S. solar panel manufacturer is shutting down. Stion makes solar panels in Hattiesburg, MS, and will be forced to lay off 137 people in December 2017. Stion cited “intense, non-market competition from foreign solar panel manufacturers, especially those based in China and proxy countries” as the reason for its move.

Looking on the sunny side of all these developments, the ongoing work in North Carolina and Utah can aid other states’ efforts to modernize PURPA and right-size value of solar. And, as painful as the rhetorical exchange may become in the FTC case, it raises awareness of the need for a strong domestic energy manufacturing workforce and knowledge base.

As fall turns to winter, PACE will continue to report on whether the right solar signals are reaching policymakers, leading them to a smarter way forward that puts consumers first.


Oktoberfest and the Energiewende

Continuing the October theme established in our blog earlier this week and taking a small vacation from covering the U.S. energy policy landscape, today PACE brings you an update on Germany’s Energiewende, or energy transition. PACE has covered this before, noting how artificial timelines, weather, and economics can prove troublesome for even the best-laid plans, and noting the costs to consumers.

Energiewende has been winding its way through German politics and energy policy for the past two decades. The plan currently aims to cut carbon emissions 40 percent by 2020 and 95 percent by 2050.

While German Chancellor Angela Merkel (Christian Democratic Party) won re-election to a 4th term on September 24, she can’t unilaterally shape the next phase of energy policy. Negotiations began this week among the 5 leading parties on how to govern for the next four years; the Energiewende will figure large in these talks. 

While the German elections focused around top-tier issues of immigration, national security, European Union ties, and same-sex marriage, it’s reasonable to think that energy costs played a role. The New York Times relayed recently that Germany has spent $220 billion (just about 189 billion euros) on renewable energy subsidies. This time last year, reports circulated estimating costs in the electric sector alone of 520 billion euros.

The Times also described that “benefits of the [subsidy] program have not been universally felt …. A de facto class system has emerged, saddling a group of have-nots with higher electricity bills that help subsidize the installation of solar panels and wind turbines elsewhere.” Power bills for consumers have doubled since 2000. 

On the positive side, Germany has succeeded at increasing the share of power it gets from renewables. Yet, for all the investment, emissions are up, with slight increases last year and expected again for 2017. It seems inevitable that the country will miss its 2020 target by a hefty margin, likely coming in closer to a 32 percent cut.

Since climate policy is really generation fuel policy, a quick exam of the traditional German portfolio is enlightening. Nuclear power’s capacity contribution has fallen from about 30 percent to 13 percent, and will rapidly fade to black thanks to a nuclear ban set to take full effect in 2022.

The Green Party enters negotiations fueled by its election platform of removing all coal generation by 2030. Today, coal provides up to 40 percent of Germany’s power. Some will push for an even more rapid shut-down of lignite plants in hopes of jumping the emissions reductions and meeting the 2020 target. Some advocate for using natural gas as a bridge fuel until wind, solar and storage become technologically and economically feasible. Other voices urge skipping this phase and leaping ahead to the predominantly renewables future as soon as possible. 

None of this policy can be implemented or even debated in a vacuum. Improving the Energiewende emissions and costs track-record probably requires linking German power markets more tightly to a broader European energy market. It’s unclear how Germany would make this a reality when a unified E.U. energy policy and market evolution seem elusive, to say the least.

Looking back, this wasn’t actually much of a vacation from U.S. energy policy, as the German story brings to mind costly subsidies, unfair burdens on consumers who don’t choose distributed renewables, ceaseless committee meetings, and dogmatism driving decisions on all sides.

Attempts to transition a complicated energy sector and make carbon emission reductions are laudable. However, the Energiewende continues to remind us that transition without due consideration of consumer costs, technology realities, and reliability impacts can make the winds of change even more unpredictable and politically perilous.   


October 2017: “Reliability Month”

Although October hasn’t been officially named “Reliability Month,” it might as well have been, owing to all the recent news bearing on how our country will generate power in the future.

In Texas, a merchant power company announced the closure of two large coal-fired plants, totaling over 2300 MW of capacity across 4 units, along with a mine that supports one of the plants. The company said that the plants fell victim to “an oversupplied renewable generation market, and low natural gas prices.”

Beltway coverage focused on Texas’ lost capacity and laudatory comments from the environmental community. However, there was insufficient attention to the 600+ good jobs that will evaporate, and to potential reliability impacts in Texas, where citizens clearly remember winter-time brownouts and rolling curtailments in the recent past.

On Friday, FERC Chairman Neil Chatterjee spoke to reporters about DOE Sec. Rick Perry’s request that FERC write new rules compensating for reliability attributes. PACE agrees with the Chairman that “compensating for baseload generation does not equate to destruction of the markets,” and that discussing the value of reliability attributes is a positive “step toward accurately pricing the contribution of all market participants.”

Sec. Perry did an admirable job Thursday, in over 2 hours of testimony to the House Energy Subcommittee, socializing that it’s acceptable and necessary to have an ongoing, robust conversation about reliability and that blind trust in the electricity “marketplace” can’t be the sole guidance.

This fall’s DOE-FERC interplay largely bears on coal and nuclear plants. But natural gas costs and supply impacts on reliability have also come up this month. EIA’s October Short-term Energy Outlook predicts that natural gas prices will edge farther above $3 per MM/Btu in the coming months. On Friday, FERC approved two pipelines needed to deliver natural gas from the Marcellus Shale to the mid-Atlantic and beyond. Even so, the Atlantic Coast and Mountain Valley pipeline projects still face more levels of federal and state review.

PACE will address the nexus between natural gas and reliability next week as we host a Facebook live panel on Thursday afternoon, October 26 examining utilities’ reliance on natural gas and the common-sense business tactics used to manage commodity costs. We’ll share details soon on how to join the live session. Please join us to hear directly from both experts featured in a video PACE released earlier this month.

Nuclear should be recognized in “Reliability Month” as well, with news of progress for construction of two new units at Georgia’s Plant Vogtle. University of Georgia Prof. David Gattie, co-author of PACE’s recent net metering report, published a thoughtful op-ed reminding policymakers why our nuclear fleet supports reliability and national security.

On a lighter note, if you’re curious about what our wonderfully diverse nation has chosen to mark this month, check out this awareness days calendar, which has a little something for everyone. In 2018, just before mid-term Congressional elections, a real Reliability Month might be just the ticket for focusing policymakers on consumers, energy costs and keeping lights on for all.