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“SOLAR ENERGY: A Path to Energy Significance” Conference Summary

April 25, 2012



WASHINGTON—On April 12, 2012, the George Washington University Solar Institute held its 4th Annual Solar Symposium where representatives from critical participants in the solar industry presented their findings on solar energy and its path to energy significance at the all-day event. The following offers highlights of their presentations:

Timothy Simon, a commissioner on the California Public Utilities Commission, provided the keynote at the symposium and emphasized the importance of solar in California’s future. While the pipeline of renewable energy projects in California has grown so quickly that utilities have now executed nearly enough power purchase agreements to meet their requirements under California’s ambitious 2020 goal of having 33 percent of its energy come from renewable resources, California continues to have robust renewable energy goals and is committed to a solar future. Thus, even though in the short term the market for new utility scale systems in California can be expected to weaken, the drive for solar energy and particularly for distributed generation remains strong. Mr. Simon also stated that very low natural gas prices are having a dampening effect on the move towards renewable resources, including solar, as regulators balance environmental, energy diversity and independence goals under a least cost best fit analysis.

Minh Le, the deputy solar energy technologies program manager with the Department of Energy, highlighted the major cost reductions that have occurred in the price of solar photovoltaic (PV) modules. This key component of PV systems is now at a 30-year low and has dropped 50 percent in the last year, putting solar PV modules below the price benchmark of one dollar per watt. Mr. Le noted, however, that PV system “soft costs” (non-hardware or installation labor) remain stubbornly high in the United States. In Germany there is almost no extra cost for connecting a PV system to the electricity grid or for permits to install the PV system. Mr. Le contrasted this with the U.S. where soft costs are approximately equal to or even exceed the cost of the PV modules. Mr. Le advocated that these obstacles must be removed by governments and regulators if PV is to become cost-competitive with conventional sources of electricity in the U.S.

Richard Perez, who is with the Atmospheric Sciences Research Center at SUNY-Albany, made a compelling presentation of data showing how the intermittency in solar PV output is mitigated when multiple PV systems are aggregated on a wide geographic distribution grid . Thus, system aggregation will allow utilities to avoid substantial mitigation expenditures inherent to operation of a single PV system. Mr. Perez also spoke about the coincidence of intense sunlight with heat waves, demonstrating that solar PV is at its peak and thus dependable for meeting peak power demands. These are important findings for establishing the high value of PV energy generation.

William Morin, who serves as chairman of the Solar Energy Industries Association Trade Working Group, addressed the trade war between the U.S. and China over the sale of Chinese PV modules in the U.S. He deplored the potential for escalating this trade war and suggested a model for negotiating trade agreements across borders that would be similar to one developed in the semiconductor industry. In this model, the U.S. and Chinese trade associations would meet to discuss stabilizing trade in terms of their common interests. The sale of Chinese PV modules in the U.S. is part of a major glut of PV modules worldwide that is driving down the price of modules but also driving a consolidation in the PV manufacturing industry, as seen with U.S. bellwethers First Solar and SunPower. It is possible that the price of solar modules will increase after the current glut on the market is bought up, because producers are losing money on every module they sell at the current price.

Bryan Crabb, first solar’s director of federal government affairs, spoke about new markets opening up to solar PV because of the plunge in module prices. He listed several countries in which retail electricity rates are higher than solar PV prices, making PV competitive in these regions. With traditional incentives from governments being squeezed by austerity measures, these new cost-competitive markets are important to the health of the solar industry. Many global areas with intense solar radiation are in rapidly developing parts of the world that do not have established electric power grids. Those regions constitute a tremendous potential market for the solar industry over the next few years.

Attorney Jerry Bloom, who leads the energy practice at Winston & Strawn LLP, closed the symposium with a presentation and panel discussion suggesting that the green attributes associated with solar projects could be sold in the private sector marketplace, isolating electric ratepayers from the costs associated with the pursuit of solutions to environmental and health-related concerns that have risen significantly in the public consciousness. Mr. Bloom’s model would allow the energy generated from solar systems to be sold at grid parity with existing conventional energy resources, while allowing the private sector to provide value to the green attributes associated with such energy sources. Under current market structures, renewable energy producers are forced to sell a fully bundled product to the utilities and compete against a fossil-fuel price. This means the green attributes receive little to no value. Consumers and private sector companies concerned with sustainability, regulatory compliance and commercial opportunities are demonstrating an appetite for meaningful access to green attributes.

More than 500 people attended the Symposium or watched the live broadcast online. Peg Barratt, dean of Columbian College of Arts and Sciences at George Washington University, stated, “Once again, the Solar Institute’s Symposium provided a unique and beneficial forum for discussion and debate of cutting edge topics facing the solar industry. George Washington University is proud of the strong commitment GW has made to addressing economic, policy, and regulatory issues related to solar through the GW Solar Institute." 

More details, including the presentations and symposium video, are available online at http://solar.gwu.edu.

-GW-

MEDIA CONTACTS:

Michelle Sherrard - 202-994-1423 - [email protected]

 

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