Finding DG ValueBefore it Finds You

John Farrell, Senior Researcher

Presentation 11/11/12 to FERC/NARUC Smart Response Collaborative

Disconnect

20 MW

4400 MW

Minnesota IOU solar plan for 2025

Res. and Comm. solar at retail price parity by 2022

-20¢

-15¢

-10¢

-5¢

0¢

5¢

10¢

Cost of solar Energy value Grid benefits Social benefits

4¢

$4/Watt

How the utility values distributed

generation

•prevent blackouts•reduce pollution•create jobs•on-site/near demand•lower transmission losses•reduce dist. system stress•hedge against fuel prices•avoided cost

0¢

-20¢

Solar Power Generation in the US: Too expensive, or a bargain? - http://tinyurl.com/3tqmerh

traditionally

^

“lev

eliz

ed c

ost”

ove

r 25

yrs

.

-20¢

-15¢

-10¢

-5¢

0¢

5¢

10¢

Cost of solar Energy value Grid benefits Social benefits

4¢

0¢

-20¢

8.5¢ But it’s worth more

•prevent blackouts•reduce pollution•create jobs•on-site/near demand•lower transmission losses•reduce dist. system stress•hedge against fuel prices•avoided cost

Solar Power Generation in the US: Too expensive, or a bargain? - http://tinyurl.com/3tqmerh

-20¢

-15¢

-10¢

-5¢

0¢

5¢

10¢

Cost of solar Energy value Grid benefits Social benefits

4¢

Solar Power Generation in the US: Too expensive, or a bargain? - http://tinyurl.com/3tqmerh

0¢

-20¢

and more

8.5¢

12.4¢

•prevent blackouts•reduce pollution•create jobs•on-site/near demand•lower transmission losses•reduce dist. system stress•hedge against fuel prices•avoided cost

0¢

1¢

2¢

3¢

1 3 5 7 9 11 13 15 17 19 21 23 25Years

Business As Usual

Savings if utilities embrace DG or stranded costs if utilities persist in large-scale transmission build-out while DG happens anyway.

Current TAC Depreciation + O&M

$80 billion

Transmission Access Costs

0¢

3¢

6¢

9¢

12¢

EnergyGen. capacityEnvironmentT&D DeferralLoss SavingsDisaster Recovery

Austin Energy Value of Solar Tariff

10.8¢

(per kWh)

Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin

Utilities value DG

0¢

3¢

6¢

9¢

12¢

15¢

18¢

2006 2007 2008 2009 2010 2011

Austin Energy Value of Solar Tariff

Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin

12.8¢

(per kWh)

Utilities value DG

6¢ per kWh in addition to

electricity

$0

$0.03

$0.06

$0.09

$0.12

$0.15

Brown energy replacementAvoided transmission lossesEnvironmental (RPS compliance)Avoided transmission accessLocal capacity value

Feed-In Tariff for PV in Palo Alto, Calif. Imminent: http://tinyurl.com/72sxgsb

}7¢

Palo Alto, CA, CLEAN Program

Utilities value DG

Total Ratepayer Cost of Solar

0¢

3¢

6¢

9¢

12¢

15¢

100kWroof

500kWroof

1 MWroof

1 MW ground

5 MW ground

50 MW ground

Required contract priceT&D costs

Distribution Grid T-GridSources: CAISO, CEC, and Clean Coalition, July 2011; see full analysis at www.clean-coalition.org/studies

per kWh

DG solar sweet spot

Distributed solar is happening by big companies and thousands of homeowners

30%

It’s launching distributed storage too - 30% of San Diego EV owners

have solar

Distributed Solar Potential at Parity by 2022(residential and commercial MW)

8500

590

750

30,000

16,000

7200

11,000

1800

990

360012,000

780

7000

8200

510011,000

190026,0002400

7300

5100

360

26001100

1200

800

14004800

1800

32,000

5000

580

970

2300

4100

4400

2900

7200

6800

2800

7100

11,000

11,000

550010,000

12,000

20

1140700

4000

Percent of Sales1-5%5-10%10% or more

Get Ready!