Navigant Research Blog

Negawatt Leadership in the Pacific Northwest

— November 24, 2015

In the Northwest, one of the most important and influential energy stakeholders is the Northwest Power Conservation Council (NWPCC). The 1980 Northwest Power Act authorized Idaho, Montana, Oregon, and Washington to develop a regional power plan and fish and wildlife program to balance the Northwest’s environment and energy needs. The heart of the NWPCC’s mission is to preserve the benefits of the Columbia River—which is home to more than 40% of total U.S. hydroelectricity—for future generations. The NWPCC develops a plan, updated every 5 years, to ensure the region’s power supply and to acquire cost-effective energy efficiency. The process relies on broad public participation to inform the plan and build consensus on its recommendations. While not statutorily obligated to comply directly with the plan, utilities generally follow its spirit, which is often in the public’s interest financially and is also a key enabler for utilities to meet their renewable portfolio targets.

Excerpts from the Plan

It is frequently pointed out that energy efficiency is almost always the lowest cost option for procuring new power, and the NWPCC upholds this with the release of each power plan. Take, for example, the following two excerpts from the most recently released Draft Seventh Power Plan. The first highlights exactly how cost-effective energy efficiency is in the Northwest and emphasizes why the region has flourishing energy efficiency solutions providers:

 “In more than 90 percent of future conditions, cost-effective efficiency met all electricity load growth through 2035. It’s not only the single largest contributor to meeting the region’s future electricity needs, it’s also the single largest source of new winter peaking capacity.”

The second excerpt illustrates the powerful combination of natural gas displacing coal and energy efficiency:

“A key question for the plan was how the region could lower power system carbon dioxide emissions and at what costs. The Council’s modeling found that without additional carbon control policies, carbon dioxide emissions from the Northwest power system are forecast to decrease from about 55 million metric tons in 2015 to around 34 million metric tons in 2035, the result of retiring the Centralia, Boardman, and North Valmy coal plants by 2026; using existing natural gas-fired generation to replace them; and developing about 4,500 average megawatts of energy efficiency by 2035, which should meet all forecast load growth over that time frame.”

The following chart is from the Draft Seventh Power Plan showing new resource development for Oregon, Washington, Idaho, and Montana.

Seventh Power Plan Resource Portfolio

Dexter Blog(Source: Northwest Power & Conservation Council)

The 5-year plan is not a cure-all, and is not even technically enforceable, but it does highlight the unique attributes of the Pacific Northwest, not only from a natural resource perspective, but also from a cultural perspective. Though maybe not as flashy as its regional counterparts in California, the network of negawatt providers in the region (ranging from the NWPCC down to the actual implementers) have done a remarkable job at realizing the potential of energy efficiency today and at embedding these solutions into the future.


Nefarious Solar Applications

— October 14, 2015

Beyond generating clean power, solar PV’s unique attributes as a distributed technology result in a variety of applications outside of the major markets of residential, commercial, and utility-scale power plants. Applications include solar lanterns for remote communities in Sub-Saharan Africa and remote microgrids in India; additional applications include powering satellites, the International Space Station, and Mars rovers. Solar can even be applied to fashionable widgets—fans, cellphone chargers, backpacks, and the like.

But what about the nefarious or even sinister opportunities enabled by solar PV? The following are a list of applications that could fall under that list:

  • Solar Bitcoin harvesting: With rough estimates at 1 GWh per day, several articles and videos have been posted recently about using solar PV for powering the mining of the Bitcoin. A so-called cryptocurrency created in 2009, Bitcoin allows users to pay for goods and services anonymously. This can range from pizza (not so nefarious) to drugs—and increasingly, weapons and ransom. For now, at least, bitharvesters have a strong incentive to utilize renewables, albeit on a micro scale, for the same reason that data centers do: power consumption is one of the main costs, and reliability is particularly important.
  • Solar cannabis: With Colorado, Oregon, and Washington legalizing (and heavily taxing) marijuana for recreational use, entrepreneurs—ranging from DIYers to large-scale agribusinesses—are looking to reduce the large amount of electricity consumed by grow rooms. Breakthroughs in LED pricing have made a major impact on the bottom line—not only for lighting common areas, but also for grow rooms. Grow rooms require lights, heaters, fans, and other appliances that consume large amounts of electricity. A 2012 peer-reviewed study found wide variations in marijuana plant production, and estimated that the large energy requirements of these facilities had lighting levels similar to those of hospital operating rooms (which use electricity at 60 times the rate of a modern home). With many U.S. states moving toward legalization in the future, grow operations will be able to transfer to outdoor facilities and reduce indoor energy demand.
  • Solar drones: Since the solar-powered plane Solar Impulse completed its crossing of the Pacific, more attention has been paid toward how solar powers unmanned aerial vehicles (UAVs). For example, in 2010, Boeing won an $89 million contract to build the SolarEagle unmanned reconnaissance aircraft, designed to fly continuously for 5 years at 65,000 feet. (Boeing had previously built Phantom Eye, a hydrogen powered aircraft that could stay aloft at 65,000 feet for four days.) Airbus has built a competing solar drone, Zephyr, which can carry a 1,000 pound payload. (Facebook and Google have recently launched solar drones themselves, designed for beaming the Internet to remote regions of the world, but fall into the not-so-nefarious category.)

The continued cost reductions of solar make once cost-prohibitive applications more realistic—regardless of their potentially illicit uses.


The Future of U.S. Solar Energy Companies – Part 4

— July 22, 2015

Note:  This blog is the fourth in a four-part series examining the evolution of U.S. solar companies.

In the final part of my series focused on the future of U.S. solar companies, I will cover yieldcos and community solar.


The solar market has seen a dramatic increase in the number of yieldcos during the past 2 years. My colleague, Roberto Rodriguez Labastida, recently blogged on the topic, explaining that the idea behind yieldcos involves the creation of a company to buy and retain operational infrastructure projects and pass the majority of cash flows from those assets to investors in the form of dividends. Structurally, yieldcos are similar to real estate investment trusts. They are also almost ideal for renewable energy projects, including wind farms.

In July 2014, SunEdison established a yieldco, called TerraForm Power Inc., which raised approximately $500 million through a successful initial public offering. In March 2014, First Solar and SunPower combined forces to offer a joint yieldco called 8point3, the amount of time, in minutes, it takes for light to travel from the sun to earth. The joint yieldco will include 87% utility-scale power plants and 13% rooftop, with installations in the United States, Chile, and Japan. There are also more than 15 other yieldcos from other large renewable energy providers, including NRG Yield, NextEra Energy Partners, Abengoa Yield, Pattern Energy Group, and Transalta Renewables.

Community Solar

To facilitate the rollout of community solar, U.S. states are expanding policies for virtual net metering, allowing multiple customers to participate in the same metering system and share the output from a single solar facility. Whether or not they are required to be physically connected to the system varies by policy. Here is a selection of historical and current shared solar programs:

  • California: Virtual net metering for multi-tenant buildings is required for investor-owned utilities (IOUs), and Senate Bill 43: Green Tariff Shared Renewables Program established a future clean electricity rate for all customers.
  • Colorado: Through the Community Solar Gardens Act, IOUs were required to accept 6 MW per year from community solar gardens for 2011 through 2013 (2 MW project limit, minimum of 10 participants, restricted to same municipality or county as the garden).
  • Delaware: Through community net metering, full retail credit is given for participants on the same distribution feeder as the community energy facility (subject to a net energy metering cap, minimum of two participants).
  • Minnesota: Through the solar Energy Jobs Act, Xcel Energy is required to credit community solar gardens at the retail rate (1 MW size limit, at least five participants, subscriptions for 25 years). The Minnesota Public Utility Commission recently provided further clarification that expanded the system size limit to 5 MW alternating current (AC).

Pure-play community solar companies, such as Clean Energy Collective and SunShare, are now being joined by major players, including SunRun and SolarCity. SolarCity stated that it will partner with Minnesota-based developer Sunrise Energy Ventures to develop up to 100 1 MW (AC) community solar installations. While this market is expected to require time to develop, as each public utility commission sets the rules in each state, the opportunities and pipelines of projects are growing.

Looking back, and ahead, at the trends covered in this four-part blog series, U.S. solar PV companies have done a remarkable job adapting to the changing landscape. Moving beyond the expiration of the 30% Investment Tax Credit (ITC) at the end of 2016 is just another one of those evolutions.


The Future of U.S. Solar Energy Companies – Part 3

— July 13, 2015

Note:  This blog is the third in a four-part series examining the evolution of U.S. solar companies.

In this blog, part of a series highlighting key trends among U.S. solar PV companies that offer a glimpse of what a post-30% Investment Tax Credit (ITC) world will look like, I will discuss storage and utilities.


Energy storage, primarily in the form of batteries, has been on the horizon for a number of years, but U.S. solar companies are now moving forward with strategic partnerships and storage offerings in certain market segments.

SunEdison will use more than 1,000 flow batteries from Imergy Power Systems for its solar microgrid projects in India. In March, The company announced it was acquiring the project development team, four existing projects, and a reported 100 MW of projects in the pipeline of Solar Grid Storage. Solar Grid Storage is a Pennsylvania-based startup that packages lithium-ion batteries and inverters to provide demand reduction, backup services, peak shaving, and grid stabilization services such as frequency regulation. Similarly, SunPower and Sunverge announced an exclusive agreement to provide solar and storage solutions available in the residential and utility segments in the United States and Australia. SolarCity and Tesla have also announced a strategic energy storage partnership for residential, commercial, and government customers in the United States and in remote communities around the world. It is expected that there will be many more announcements to come.

Due to increasing competition and the expiration of the U.S. federal ITC at the end of 2016, U.S. solar companies will need to continue to evolve their offerings. SunEdison, SolarCity, First Solar, SunPower, and others have all demonstrated a commitment to continuous innovation of their technology and business models, which will result in sustained growth for these and other U.S. solar companies in the future.


One of the most critical issues in the U.S. market today, and after the expiration of the ITC, is how net metering policies will be adjusted within each utility service territory. Here, there is no one-size fits all answer. It will be a fight that will continue to play out differently in each region. Thus far, Arizona has been ground zero for net metering policy fights, with neighboring New Mexico following suit, and California expected to release an update soon. Utilities are increasingly proposing fixed fees on solar PV customers, ranging from $5 to $50 per month, significantly affecting the value proposition to residential solar PV customers. In addition to this, many utilities are also considering providing distributed solar as a service themselves. In some cases, such as APS, they are doing both at the same time.

Solar Electric Power Association put together a great map of where utilities are offering solar PV programs of their own. The map illustrates the variety or business models being employed–ranging from pure utility ownership, to financing, to energy purchases, and other customer programs. Clearly, the concern among U.S. solar PV companies is that monopolies have an unfair advantage due to their status, but utilities also have a point that they enable solar PV to be utilized in such great volume because of the stabilizing and backup role they will play now and increasingly in the future. That is why more than a dozen value-of-solar analyses are being conducted across the country and U.S. solar companies will need to continue to adapt.

For more information on the most recent regulatory updates affecting distributed solar PV, check out North Carolina State University’s recent report on the topic.


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