The True Value of Solar (3/14/2014)

  • Posted by Dawn Merritt
    By Eric Jensen, IWLA Energy Associate. 

    There’s broad desire to increase solar on the electric grid. Let’s set aside the debate about who gets what subsidies and which technology needs an incentive. What if we step back and tried to answer the question: What are the costs and benefits of solar? The end result would be a thoroughly developed net “Value of Solar” that works with utility business models and compensates customers fairly for helping add solar to grid.

    Minnesota just did that. On Wednesday, March 12, the state’s Public Utilities Commission (PUC) reviewed the work done by the Minnesota Department of Commerce’s energy division and heard oral arguments from the Izaak Walton League, utilities, environmental organizations, businesses, the solar industry, the public, and other stakeholders. What the PUC approved was a rigorous, analytical methodology for utilities to calculate how to fairly credit customers for their solar energy. This methodology includes wonky things like reduced line loss and avoided operations and maintenance. But it also incorporates broader societal benefits, such as reduced carbon emissions, which too often are ignored in a utility’s day-to-day business. The Public Utilities Commission recognized the significant amount of work done at the federal level to determine and vet carbon pollution’s impact on society, integrating the Societal Cost of Carbon into the calculations. 

    Better still, this “Value of Solar” will be updated annually, ensuring it adjusts as costs and benefits increase or decrease over time. And while it’s up to the utilities to initiate use of this value for their customers, with their expressed interest and the potential requirement of this “Value of Solar” being used for upcoming community solar gardens, the outlook looks bright* for Minnesota.

    *pun… no regrets

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