Most electric utilities hate rooftop solar. When a customer installs solar on their roof, it means fewer sales (and therefore revenue) for the utility. It also means more unpredictable and dispersed sources of power from rooftops everywhere. As a result, many utilities across the country have been trying to kill state rooftop solar incentives for years.
I’ve covered the battles in states like California, Hawaii and Nevada on this blog. The short of it is that California has slightly decreased their incentives for rooftop solar, in the face of declining prices and concern about utility costs; Hawaii has retrenched significantly but in turn created a new market for home batteries + solar; and Nevada brutally ended their incentives a year ago, leaving even existing solar customers without incentives that they had relied on when they bought their panels.
But the end of 2016 brought some significant updates for Nevada and now a new state, Arizona. First, as Greentech Media reported, Nevada regulators have restored the incentives for customers in the northern utility service territory (after having previously given into public pressure and restored the incentives for existing customers to “grandfather” them in).
But Arizona regulators have decided to jump off the rooftop solar cliff, killing existing incentives (which involve a full retail credit for every surplus kilowatt of electricity generated by the panels and not used on-site). Instead, solar customers in Arizona will be eligible for a vastly reduced and unpredictable “export rate” for any surplus electricity generated. As the Arizona Daily Star described:
The export rates will be determined in each utility rate case and will initially be based on a “resource comparison proxy” based on a weighted, five-year average cost of power from utility-scale solar farms.
The new export rates will vary by utility and be stepped down annually, in increments limited to 10 percent each year.
Solar industry advocates are already predicting that their industry will die in Arizona, as they correctly predicted would happen in Nevada after incentives were killed there, too.
Once those jobs disappear and Arizonans realize what they’ve lost, especially given that the state was otherwise one of the best-selling markets for solar with its abundant sunshine and high air conditioning bills, expect major political pushback. I wouldn’t be surprised if we see a Nevada-like reversal in the coming year or so.
The Tesla Gigafactory when it was under construction.
In the meantime, the big winner could be battery companies like Tesla. Per Bloomberg, as the company “flipped the switch” yesterday on its gigafactory in Nevada, it will potentially have a new market to sell its product.
Why? Because if solar customers in Arizona aren’t going to get paid much for their surplus energy anymore, they’ll be interested in a cheap battery that can store that surplus and help them use all of it on-site. The battery therefore allows them to effectively recreate that full retail credit they used to get under the old system: any electricity they would have had to purchase from the utility when the panels weren’t producing or producing enough, they can now get from their battery.
So while states lurch around on their rooftop solar policies, the long-term trend seems clear: the incentives are decreasing, and cheaper batteries will be filling that void.
Begun, the smear wars have
Anti-clean technology forces, emboldened by Trump’s electoral college win, are eager to kill federal support for electric vehicles and solar power. Critical to the effort is a smear campaign directed at Tesla CEO Elon Musk, especially now that the company has merged with SolarCity. As EcoWatch uncovered:
Elon Musk is being targeted by the conservative political action committee, Citizens for the Republic. The group’s so-called Sunlight Project is behind an incendiary lobbying campaign and website called, “Stop Elon Musk from Failing Again,” with a mission of divesting the Tesla/SpaceX/SolarCity boss from federal clean energy subsidies.
The group cites a misleading Los Angeles Times article stating that Tesla is set to receive $4.9 billion in government subsidies. As Musk described, the figure is derived from “adding up everything that’s ever happened and including things that will take the next 20 years” and doesn’t compare with subsidies for fossil fuels.
It’s not clear who’s funding the effort, but right-wing ideologues are definitely spearheading it:
The Drive‘s Liane Yvkoff also reported that Citizens for the Republic’s board members Craig Shirley and Diane Banister are partners of the right-wing public relations firm Shirley and Banister Public Affairs, that has represented the National Rifle Association, commentator Ann Coulter and the Tea Party Patriots. Posts on “Stop Elon Musk From Failing” are authored by someone called “stopelon,” the same user name on Alt Left Watch, which also happens to be managed by the PR company.
But is it too late to stop the momentum for clean technologies like EVs? As the Detroit Free Press reports, EV sales in places like California have been accelerating due to state policies, while global investment in EVs continues:
These are global companies, and China and Europe are moving forward with their incentives for non-gas-burning vehicles. Whatever the Trump administration does, the rest of the world won’t abandon the Paris Agreement to reduce the global growth of carbon emissions.
“The industry has made a massive investment in electric vehicles,” [Dan Sperling, founding director of the University of California Davis Institute for Transportation Studies] said. “While some would prefer to slow it down, most companies are going to continue along that path.”
And Bloomberg as well notes the global investment in alternatives to gas-powered vehicles:
Gasoline has been the world’s choice to power automobiles. From the 1950s onward, when Henry Ford’s dream that every middle-class American could own a car became reality, gas stations sprung up next to drive-through restaurants and strip malls and transformed the landscape of America and economies across the globe.
Now, however, car companies — most obviously Tesla, but also incumbents such as General Motors Co., BMW AG and Nissan Motor Co. — are putting their money, and reputations, behind electric vehicles. With technology improving — especially for batteries — prices are falling. Tax breaks, particularly in China, are helping sales.
Meanwhile, as Salon writes, other automakers are following Tesla’s playbook of investing in batteries as building energy storage and not just vehicle transport.
So it may be too late to stop the momentum behind battery price declines and improved options for EVs. But this smear campaign is an attempt to turn Musk into the bogeyman of clean tech and rally the right to ditch the federal tax credits. Advocates should counter by debunking the claims and trumpeting the domestic economic and job benefits of these technologies.
Si’u Point Trail, Ta’u Island, National Park of American Samoa
I’m a big believer that islands will lead the way in decarbonizing the economy. Many of them have ample renewables resources, such as geothermal on Hawaii’s Big Island and Iceland, wind and hydro on Kodiak Island, and solar energy on other Hawaiian islands.
Now, on the heels of the big Tesla-SolarCity merger, the American Samoa island of Ta’u used the companies’ products to go 100% renewable. As the Washington Post reported, the island’s leaders wanted to stop depending on expensive, imported diesel fuel to generate electricity:
“[They] basically just put out a solicitation to see if anybody could provide an alternative to diesel, and that’s something that we responded to,” said Peter Rive, co-founder and chief technology officer of solar provider SolarCity, which was recently acquired by Tesla.
The result is a system composed of more than 5,000 SolarCity solar panels and 60 Tesla Powerpack battery storage systems. The new microgrid could save the island nearly 110,000 gallons of diesel fuel each year, which amounts to about 2.5 million pounds of carbon dioxide emissions, according to data from the U.S. Energy Information Administration.
The microgrid is already up and operating, according to Rive, and covering about 99 percent of the island’s power needs. The battery system can provide three full days of power to the island without sun, he added. And it can fully recharge in seven hours of sunlight.
It may have been easier for this island to go 100% renewable compared to other places, given its ample sunshine and small population. I’m assuming the island lacks energy-intensive industries as well. But the lessons can be applicable to other islands and economies, particularly when you factor in other generation technologies, like wind and hydropower.
Now if Ta’u just switches to all battery-electric vehicles, they’ll pull off the full eco-paradise.
It’s been a guessing game since Election Day about what Trump will do on climate change and renewable energy. Some renewable advocates believe the bipartisan support for solar and wind will inoculate current federal tax credits from getting rolled back. Others believe that the tax credits will be vulnerable in the event of a big congressional overhaul of the tax code. Meanwhile, Trump has surrounded himself with climate science deniers and oil-and-gas tycoons.
But one “clean” energy technology might get favored treatment: nuclear fusion.
Why? One of Trump’s most ardent backers, Peter Thiel, the Silicon Valley billionaire, is a big proponent and investor, as Bloomberg News reports:
Nuclear fusion, which would harness the power of the sun without all the nasty byproducts, is a long-shot—politically, financially, and technologically. Despite relative ambivalence toward fusion by the Obama administration, research has continued apace internationally, and in the American public and private sector. At the head of this pack are venture capitalists like Peter Thiel, the Silicon Valley billionaire who spoke at the 2016 Republican National Convention and is said to be working on the Trump transition team. He has funded a fusion start-up called Helion Energy through his Mithril Capital Management to pursue the ultimate dream of environmentalists the world over.
Fusion has sounded interesting on paper but has never materialized as a practical option. Of course, solar panels used to be prohibitively expensive and impractical until government incentives and pro-manufacturing policies spurred the necessary investment to bring costs down. Thiel’s company is hoping for the same dynamic with fusion:
Helion hopes to make a fusion generator that’s 1,000 times smaller, 500 times cheaper, and 10 times faster than more conventional, massive projects, according to its website. The company is building a “magneto-inertial fusion” generator. It produces power by injecting heated hydrogen and helium at high speed (a million miles an hour) into a “burn chamber,” where a strong magnetic field compresses the plasma to a temperature high enough to initiate fusion. Energy from the reaction is used to generate electricity.
Meanwhile, a potential ally, pro-nuclear environmentalist Ted Nordhaus, is causing a stir with a post arguing that the clean energy industry shouldn’t rush to deal with the Trump Administration given its authoritarian leanings, even if it pursues policies in their interests:
Trump campaigned and won the election fair and square. He has every right to pursue his agenda and vision for the country. When and if it becomes clear that democratic norms will prevail in the new Administration, that Trump does not intend to prosecute his political opponents, squelch dissent, and harass the free press, I will happily praise the Administration when it takes actions that I believe to be consistent with health, prosperity, equity, and environmental protection, and criticize it when it does not.
But the signals have thus far been mixed and that presents complicated decisions for those of us in think tanks, advocacy organizations, and the media. Most of our professional incentives are to act as if some version of normal democratic discourse and policy-making will prevail. There is not much for us to do, at least in the normal way that advocates advocate and analysts analyze, in the event that those norms do not prevail. The risk for all of us is that in our haste to get back to normal politics and advocacy, we normalize a dangerous turn toward authoritarianism.
Lots to chew on for an industry (one of many) now facing complicated and challenging times.
It’s official: Tesla shareholders approved a merger with SolarCity. Despite financial analysts’ concerns, the basic concept makes sense: electric vehicle drivers will want solar panels to make fueling the vehicle at home cheaper. Solar customers will be interested in electric vehicles because they already have cheap fuel at home. So there are big marketing/customer acquisition benefits.
But more importantly, as rooftop solar sales decline and state regulators pull back on incentives, batteries will be crucial to keep solar competitive. Why? Right now most rooftop solar customers use the grid as their battery. I have panels on my home, for example, and when I have surplus electricity in the summer, I export to the grid and get a retail credit for that surplus. I then apply that retail credit to my grid usage in the dark winter months, and “true up” after a full year accounting.
But regulators are doing away with that bargain already in places like Hawaii and Nevada. Soon new solar customers are going to need an actual battery to store their surplus solar. It would be the same model that I have, but you no longer need the grid to store your electricity, and you don’t need regulators requiring utilities to do so. Instead, with a big enough battery, you capture and use all your solar energy on site.
The one question I have is whether the economics are still good enough to encourage people to purchase both a battery and solar array. I doubt a typical Tesla home battery will be big enough to capture all the surplus energy in the summer months, meaning some power will be lost that the grid would otherwise have used. But as battery and solar prices decrease and electricity rates increase, the deal could be good enough.
Either way, the merger represents a sea change in our electricity system, packaging transportation and home energy use in a way we’ve never seen. If all goes well for the company, Tesla could one day become a monopoly like we’ve never seen, with a gas station, utility, and car company all rolled into one.
Michael Barnard at Clean Technica is bullish on global climate action, despite the Trump electoral college win last week:
There are multiple reasons for this, but it comes down to inertia and isolationism. International and internal US agreements are hard to unwind, often bipartisan, and won’t be focus areas. The economics of wind and solar are transforming generation globally. Electric vehicles have multiple value propositions besides climate change. The rest of the world and especially China aren’t going to stop, they’ll just pull ahead of the USA. And a military that stays home doesn’t burn nearly as much diesel and aviation fuel. There’s no reason to cheer for a Trump presidency if you care about the climate and the global economic impacts of climate change, but there’s less reason for gloom than most would think.
He also makes a similar argument that I made last week, that a likely economic downturn caused by Trump policies could slow emissions.
I’m less optimistic than Barnard about what Trump will do to the Paris accord, but his point about clean technologies is an important one. Have these technologies, like renewables and electric vehicles, reached the economic tipping point to be viable even without federal tax credits and other support?
I’m reading mixed things. Utility Dive reports on the optimistic case:
“Our industry will be fine,” Sunnova CEO John Berger told Utility Dive. Sunnova is one of the leading national rooftop solar providers. “Business models will change and the companies that can’t deliver a better service at a better price won’t make it.”
Losing its 30% federal investment tax credit (ITC) might even provoke constructive change, Berger said. “But with or without the ITC, this industry will thrive and that is because we are quickly driving down the cost of solar and solar components and now the cost of batteries is coming down as fast.”
And yet Greentech Media forecasts some major retrenching in the renewable industry, if Trump and his congressional allies kill federal support:
The tax credit was expected to support 25 gigawatts of additional solar installations — a 54 percent increase that amounted to $40 billion in new investment through 2020. By the time the ITC falls to 10 percent in 2020, GTM Research expects the industry to be adding 20 gigawatts of new capacity yearly. By comparison, 6 gigawatts of natural-gas power plant capacity were added in 2015.
Reversing those figures provides a rough estimate of what might happen to solar if the tax credit is cut. Installations could fall by roughly half.
As for electric vehicles, the tax credits will help determine if new models like the 238-mile range Chevy Bolt, to be released next year, will sell for $37K or $29K — a very big difference for most consumers. But at some point they are scheduled to be phased out anyway, so it could just be a short-term setback to the industry, particularly with California’s strong policies on zero-emission vehicles.
And of course, we don’t really know what Trump and congress will do. We know many Republicans favor renewables, but we also know that a revision of the tax code in general could be in the works. And the last time that happened in 1986, renewable tax credits disappeared. They’ll need to save money somewhere to pay for their tax cuts for upper-income earners.
So it will be a wait-and-see situation, but it’s cause for states like California to start thinking immediately about backup support at the state level, such as through fees on polluters to cover clean tech support. As on many issues related to this election, it’s time to gear for the worst.
On Friday, Elon Musk unveiled a way to make solar panels as sleek and cool as Tesla has made electric cars. You can watch the video above, but it’s hard not to feel like this is the future of solar panels. The panels are broken down into tiles that (according to the video and photos) look pretty much exactly like real roofing material. According to Musk, they are also supposedly sturdier than everyday roofing material. In short, there’s no negative aesthetic impact from the panels, while you get a better roof in the process.
You can see photos here from Tech Crunch. And here’s the slate tile model, in the photo on the right. As you can see, it’s hard to tell that there’s any solar PV modules in there. It looks “real.”
Musk made a point to say that the cost of the solar roof is less than the cost of a new roof plus electricity. That could be the case, but right now we don’t have any cost figures on the solar roof. We also know that the solar roof panels are not as efficient as regular solar panels (as the Tech Crunch article points out), and presumably any homeowner would be paying for panels in inefficient (i.e. shaded) parts of the roof. Plus, they wouldn’t be sized to the demand on-site, so customers may be paying for too much solar production compared to the retail credit they can get to offset their usage.
And of course, how many people are replacing their roofs in any given year? If the average roof lasts 25 years, that means just 4% of the market, and probably less given that many people are renting or living in multi-unit dwellings without access to their roof.
But Musk knows that the incentives around rooftop solar are diminishing across the country. As his PowerWall battery gets cheaper, solar customers are going to want to bundle solar with storage, effectively making any utility credit system pointless. After all, why be dependent on regulators giving you retail credit for any surplus solar you generate, when you can just use all your solar energy on-site as you store it for nighttime and cloudy days in your battery?
So lots of unanswered questions, but one thing is clear: solar panels just became sleek and cool — something you couldn’t necessarily say before Friday.
A common concern about the “greenness” of electric vehicles is that the batteries have a negative environmental footprint, from manufacturing to disposal. True, batteries have an environmental cost, but it is minimal over the lifecycle of the vehicles compared to the alternative of a petroleum-fueled vehicle (of course, the true alternative of walking, biking or transit is the ideal, if not always practical for most people).
But there is also a huge environmental upside to the battery: the prospect of hundreds of thousands of used, cheap batteries available to bottle surplus renewable energy for later use. As David Roberts on Vox.com described:
In four or five years, the batteries in the roughly one and a quarter million EVs currently on the road are going to start to wane. EV owners will either replace them, or replace the cars entirely.
That means we’ll have a lot of used batteries on our hands — batteries with plenty of life left in them, but which are no longer suitable for EVs. What to do?
It’s worth reading the article in full for an overview. Or you can see our UC Berkeley/UCLA Law report on the subject back in 2014, Reuse and Repower: How to Save Money and Clean the Grid with Second-Life Electric Vehicle Batteries.
A lot has happened since that report came out, particularly with pilot projects. For example, as the MIT Technology Review reported, BMW combined batteries from 100 cars for a grid-scale energy storage facility in Hamburg, Germany, which is capable of storing 2.8 megawatt-hours of energy and delivering up to two megawatts of power. It’s designed to meet periods of peak demand to avoid having to ramp up fossil-fueled power plants. And a French web hosting company in Normany is deploying used Nissan EV batteries to capture surplus renewables to lower energy costs. These are just a few of the growing number of pilot projects happening around the world.
And studies on the subject are increasingly bullish. Fortune covered a new report this past summer from Bloomberg New Energy Finance, which predicts that roughly a third of electric car batteries are expected be reused by 2025, totaling 29 gigawatt hours of used batteries. 10 gigawatt hours of those could be repackaged for grid needs.
But the challenges are myriad. Greentech Media has a great article describing the barriers and options going forward, many of which we discussed in our 2014 report:
“Batteries are a lot like people: They each have their own individual state of health depending upon what they’ve been exposed to and how they’ve been treated over the course of their life,” said Ken Boyce, who’s developing a safety standard for second life batteries at Underwriters Laboratories, a major safety certification firm.
But despite the potential and progress being made, one major automaker is notably absent in these efforts: Tesla. As the Bloomberg New Energy Finance report author Claire Curry observed in Greenwire [paywalled]:
Tesla, however, is not one of the players, partly because it is more interested in recycling batteries at its Gigafactory in Nevada, Curry said.
“Tesla has so much stationary storage capacity it needs to sell,” she said.
I asked Elon Musk about his interest in used EV batteries in early 2014 at a public event, and he said he was absolutely in favor. His staff later approached me to walk back his comments a bit. It seems that they want to make money selling new batteries and don’t want the competition from cheap used ones.
But Tesla may be swimming against the tide, as a surge in used EV batteries could change the energy storage market and clean the grid for the better — starting in just a few short years.
In Fortune, former Tesla VP Cristiano Carlutti dishes on the company and the upcoming Model 3 (Tesla’s first mass-market EV, due in 2017):
As far as the downsides of the Tesla Model 3, let’s try to look at things from a different perspective: the biggest downside of Model 3 in my opinion is that it doesn’t exist yet. Lots of things can change until the launch date and I would assume that, when it was presented earlier this year, Model 3 was probably nowhere near a decent stage of development.
In order to understand this perspective, you have to take a different look at the way the company operates: in my opinion, it’s fundamentally a very focused marketing machine that until now has been focused on selling shares, with car sales instrumental to that. Before some fans attack me because of this comment, let me tell you that… it was the right thing to do!
In other words, Elon perfectly knew since the beginning that he would need a massive amount of money to become a car OEM and that, in order to raise that money, he had to create and sustain excitement in investors even more than in clients. Another way to look at it is that at this prices, the purchase of Tesla stock is more irrational than the purchase of a Model S: the latter is a very good car, competitive in its market, while the stock is more of a bet (or a gamble) on future dividends that nobody knows if they will ever appear. Car sales and car fans are just instrumental to raise the money Tesla needs to reach the point where it will be self-sustainable: the gamble is that financial markets keep drinking the company’s kool-aid at least until the company becomes self-sustainable. If they stop drinking it too soon, it will be game over and an historical failure, if believers sustain the company long enough, it will be a masterpiece of entrepreneurship and a tremendous success.
A lot is at stake with the future of Tesla. The company is, in my view, the most important private sector clean technology purveyor out there. Elon Musk has almost single-handedly pushed EVs to the forefront of the public imagination, spurring other automakers to follow suit. He also is betting big on energy storage and its marriage with solar PV, which will be essential to decarbonizing the grid. Combined with electric transportation, Tesla’s technology deployment promises to help the world decarbonize at a much greater rate than we otherwise would.
I don’t want to overstate it, but Tesla is making a strong claim to being in position to quite literally save the world (at least from out-of-control climate change).
So we need the company to succeed and raise the capital it needs for the deployment it envisions. If Carlutti is to be believed, let’s hope Musk can keep stoking the imagination of investors — and more importantly, that he and his team can deliver on their big promise with the Model 3. They’ll need a car that meets expectations at the right price and delivery time, without some of the quality issues plaguing the Model S.
It’s possible to do, but not certain. Reason for us all to be nervously optimistic.
It’s been a big story about the massive price decreases in solar PV panels over the past half-decade. But now the industry is exploring ways to reduce other costs beyond the panels, with some promising innovation in the works.
Greentech Media profiled SunPower’s efforts on this front. The company is relying on drones to monitor installation progress and robots to clean the panels at night, reducing operations costs and improving efficiency. Of course, such innovations could diminish the jobs benefits for local communities going forward. But lower costs means cheaper electricity, which offers its own economic benefits economy-wide.
Meanwhile, to address conflicts with agricultural groups who don’t want to see more farmland lost to solar PV, the company is experimenting with co-locating farming:
The SunPower R&D Ranch — where the company plans to test a suite of new technologies — is currently attempting to grow tomatoes and peppers in between the Oasis arrays, but it will attempt to grow other types of crops too. Heiner Lieth, professor at the UC Davis College of Agriculture and Environmental Science, started a solar research project in 2010 and has successfully been able to grow crops in the shade of solar panels. But there’s a lot more work to be done in order to scale these solutions, he said.
“I’m convinced it’s possible,” said Lieth. “The question is what the ideal balances are depending on what you’re going to be using for your cropping systems and what the market is for your electricity and agricultural products. And it opens up a whole world of questions.”
A lot still needs to be done to prove the concept, but together with grazing activities, on-site farming could help minimize the conflicts. It’s a subject we covered in the Berkeley Law/Conservation Biology Institute report “A Path Forward,” and it’s a problem that we hope more stakeholder engagement and innovations like these can solve.
