Navigant Research Blog

Expanding Options of Community Solar

— November 6, 2015

In the United States, community solar (also known as shared solar or solar gardens) has been on the rise and is expected to be a 0.5 GW annual market by 2020, according to GTM Research. Over the next 2 years, community solar deployments are expected to increase sevenfold, with an estimated 399 MW installed cumulatively in 2015 and 2016.

Designed specifically for homes unfit to reap the benefits of rooftop solar, community solar provides an option to renters who would be otherwise unlikely to invest in the high prices of rooftop solar. In a community solar setup, customers lease or own solar panels in a community solar garden. The energy produced is transferred to the utility, which then applies solar credits to the customer’s electric bill on a monthly basis based on the customer’s total share of the solar array. However, even with the growth of community solar gardens and the increase in accessibility for users, the costs remain high and are not always affordable.

Annual U.S. Community Solar Installations, 2010-2020E

Krystal Blog Chart

(Source: GTM Research)

Making Community Solar Affordable for Everyone

GRID Alternatives, a non-profit headquartered in Oakland, California, works locally through 10 regional and affiliate offices in California, Colorado, the New York Tri-State Area, and the Mid-Atlantic, as well as internationally in Nicaragua. Grid Alternatives’ Colorado branch has developed the first solar garden in the United States exclusively for those with low or fixed incomes.

Utilities have partnered with Grid Alternatives’ Colorado for its community solar program, offering community solar to Colorado families at no out-of-pocket cost to the family. Requirements for the program’s participants include having a household income that is at or below 80% of an area’s median income and having residence within a utility service area that currently offers the program. Two solar gardens are listed on the company’s website. The first is a 29 kW array available to members of the Grand Valley Power service territory. The second (which lists panels as currently available) is 75 kW in size and is available to Xcel Energy customers who live in Jefferson County.

Other Opportunities

There are a number of programs that focus on making solar affordable for low-income families, but there is still room for growth in the low-income solar market. Unlike GRID Alternatives, most of these other organizations focus on rooftop solar, not community solar. The Renewable Energy and Electric Vehicle Association, for example, is a do-it-yourself organization that assists members in installing solar panels in an effort to cut the cost of labor. The Citizens Energy Solar Homes Program installs solar arrays on the roofs of low-income families in the Imperial Valley of California. Founded in January 2013, the Solar Homes Program provides the homeowner with a 20-year solar panel lease paid for by Citizens Energy, which, on average, saves the home owner 40%-50% of the cost of their electric bill.

Even with the number of programs that focus on bringing solar to low-income families, there is tremendous room for growth. The question remains if the rise of community solar will translate to an increase in solar opportunities for low-income families.

 

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.

 

Offshore Wind Farm a Milestone for New England Energy

— May 18, 2015

At an industrial facility in Rhode Island, work has finally begun on what will likely be America’s first offshore wind farm. Originally proposed in 2008, Providence-based company Deepwater Wind’s project has overcome significant headwinds to receive permits, sign power purchase agreements, and finally begin construction. Made up of only five turbines, work on the relatively small project comes at a time when New England’s energy future faces uncertainty. The region generates almost no energy locally, being dependent primarily on natural gas and coal imports from other parts of the country. As a result, consumers are susceptible to volatile rates due to severe weather and supply constraints. A proposal to expand natural gas pipelines represents one way forward for the region, while the wind farm on Block Island represents a very different path.

As a former resident of Block Island, I have been intently following the progress of this project since its initial announcement. While working on the ferry to the mainland, I spent many hours on a nearly empty ship hauling truckloads of diesel fuel to be burned at the island’s one power plant. It comes as no surprise that island residents have to pay some of the highest electricity rates in the country, around $0.50 per kWh. These rates are significantly higher than even Hawaii, where expensive electricity has set off a rush of solar PV and other local energy generation.

Looking Ahead

The wind farm is a crucial component of Block Island’s energy future. Deepwater Wind claims that once operational, the farm could reduce island electricity rates by nearly 40%. Many island communities around the world have recently initiated ambitious plans to wean themselves off imported fuels completely by integrating locally generated energy. Local energy storage has been an important aspect of many islands’ plans to reduce dependence on imported energy, as discussed in a recent post by my colleague Anissa Dehamna. A great example of this can be found on Kodiak Island in Alaska. Global power electronics provider ABB worked with the local electric cooperative to install both battery and flywheel-based energy storage systems to help stabilize the output from the island’s wind turbines, and to store excess power generated at night to be used at times of high demand. The addition of energy storage on Kodiak Island has enabled up to 100% penetration for renewable energy and greatly reduced diesel consumption.

The development of the wind farm on Block Island will present great opportunities to demonstrate the value that other clean energy technologies can provide. The island is an interesting case due to the dramatically smaller population outside of the summer months. There are only around 1,000 year-round residents on the island, meaning demand for electricity most of the year is only a fraction of summer demand. For most of the year, the 30 MW output from the wind farm will be far more than is needed to power the island. By integrating local energy storage, the island could easily be a net exporter of energy through the soon-to-be-built transmission line connecting the mainland while only ever using locally produced clean energy. This can provide substantial benefits to residents through lower electricity rates and a much cleaner, more reliable power system.

 

Microgrids Expand Across India

— May 13, 2015

Navigant Research’s data on the microgrid market has historically pointed to North America being the mother lode. The host of state programs supporting community resilience microgrids would seem to confirm this conclusion. But there is a counter argument that the developing world is the best microgrid market, and that’s why SunEdison’s move into northern India is so significant.

I think the Asia Pacific region’s microgrid market is likely to ultimately surpass North America, but not until 2030 or so. Recent data provided by Aalborg University in Denmark shows that China alone is planning on installing 4.3 GW of new microgrid capacity over the next 5 years, which bolsters this opinion. But China’s market is problematic due to the prevalence of nationalized grid companies and other unique vendor challenges.

To the Subcontinent

And then there is India. As one telecom infrastructure provider pointed out, there are more planned telecommunications tower deployments in India as there are in all African nations combined! (These telecom towers often serve as anchor loads for microgrids.) Couple that with a government policy of deregulating all microgrids 1 MW and less, and the stage is set for rapid innovation at the lower end of the microgrid market spectrum.

Back to SunEdison … Working with on-the-ground innovators, such as OMC Power, the company hopes to bring online 5,000 microgrids, ranging from 10 kW to 1 MW, by 2020, providing power to 20 million people. While it’s fascinating that SunEdison is moving into this market, given its success with the power purchase agreement model in mature economies such as the United States, largely through solar PV leasing arrangements, even more interesting is its choice of partners: OMC Power.

Having begun in 2011 by focusing on the concept of bringing power to rural developing nation markets, such as India, employing e-power device business models, OMC Power is now changing its tune.  In the past, the company focused on daily home delivery of solar-charged portable energy products (e.g., LED lanterns); its customers paid the equivalent or less as they had paid for diesel or kerosene. The company financed, built, owned, and operated hybrid off-grid micro-power plants that tap solar, wind, or biofuels to provide alternating current (AC) power to telecom sites and portable direct current (DC) power to local villages.

Finding Scale

According to chief marketing officer Par Almqvist, the company’s new direction is a natural evolution. “Once most communities get power, they want more of it,” Almqvist said in a phone interview.  In order to get to the right price point, it has become apparent to us we need to centralize power production. One must find an efficiency of scale.”

Almqvist still sees a role for e-power products and nanogrids, and in some cases, such options are the only viable path for electrification. Yet to reach scale, other business models must also be deployed. “We have proven that the perception that the bottom of the pyramid is a risky clientele is not necessarily accurate. What we’ve discovered is that, especially in rural northern India, people will pay for what is an essential service, especially when they can save money.”

The benefits go beyond economics. The mix of solar PV and deep cycle batteries will also allow telecomm operators to reduce diesel generation to less than an hour a day. This kind of result prompted the Rockefeller Foundation to announce another program that OMC Power is a part of–this one designed to bring power to 1,000 villages.

 

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