..in the near future and the American Recovery and Reinvestment Act’s lifting of the investment tax-credit cap for residential PV, the report concludes. Motives for buying solar vary, says Ted Beer, another Burns & McDonnell principal. Some want to do something for the environment, and others are looking for protection from volatile electric rates. Government agencies buy solar to comply with mandates, while large industrial concerns like Coca-Cola and Frito-Lay do it because “it pays,” he says.
Public policy also is driving adoption of distributed generation. Twenty-eight states and the District of Columbia have established a “renewable portfolio standard,” requiring utilities to provide some portion of their power from renewable energy. In pursuit of its obligations under California’s RPS, Southern California Edison Co., Rosemead, Calif., has launched a $785-million program to install 250 MW of PV panels on commercial rooftops. First Solar Inc., Tempe, Ariz., completed the first of Edison’s proposed 150 installations in October. Edison officials say the program could eventually cover two square miles of roofs, with peak generating capacity at a cost averaging $3.50 per watt installed.
SCE owns the panels and leases roof space. The warehouse earns income from otherwise vacant real estate, and the utility increases grid reliability at the circuit level. A few other utilities have similar programs. Duke Energy Corp., Charlotte, N.C., was the most recent, with a $50-million program to install 10 MW of PV on roofs of malls and big-box stores. The North Carolina Utilities Commission permitted the program on May 6.
A Good ‘FIT’
Policies in 46 states allow distributed-generation owners to sell their power into the grid when their generation exceeds their demand (map). This “net-metering” policy has added profit to the motives. Gainesville Regional Utilities in Florida took net metering to a new level in March, when it began paying owners of new PV 32¢ per kilowatt-hour. This “feed-in tariff” (FIT), the first in the U.S., pays for electricity generated, replacing a rebate program that paid only for installing PV capacity. Germany’s FIT is credited with making it a world leader in commercial-scale PV. A dozen states now are considering a similar tariff.
Today, solar photovoltaic installations dwarf other distributed-generation technologies. Wind is not a such a resource, says Paul Sheaffer, director of Resource Dynamics Corp., McLean, Va., a consultant on small-scale generation. “It has better economics on a utility scale,” he says. Sheaffer advocates combined heat and power applications, although all CHP is not small-scale or renewable-fueled. Saint Louis-based McCarthy in 2006 completed a 19-MW gas-turbine combined-cycle plant designed by Stanley Consultants Inc., Muscatine, Iowa, with a 40-MVA substation and twelve 2,000-ton chillers for Arizona State University. Because its power and thermal energy both are used for local load, it is considered distributed generation.
Global competition has led to higher cost for bulk generation, and “there is definitely a trend to increasing our renewables in the U.S.,” says EPRI’s Rastler. “The electricity sector has to reduce its carbon footprint. We’ll need every tool in the box” to do that, he says.
