Given the volumes of print, video and chatter on  climate change, the evils of coal (including those mythical  “clean coal” types) and the panacea that is renewable energy, the average person could be forgiven for wondering why on earth the people who are in the business of producing and selling electricity aren’t running – instead of crawling or being dragged – towards something as reliable, clean and universal as solar power.  Notwithstanding some movement towards solar in states like California and to a far lesser extent New Jersey and Connecticut (the majority of which is small distributed roof-top projects), the vast majority of U.S. utilities have barely budged towards adopting solar in any meaningful way. Not that they aren’t aware of solar or aren’t sudying it mind you. They just aren’t buying into big megawatts of it. Why is that?

If you’re a rabid environmentalist the usual suspects are “big oil” and similar dark industries with sinister motives that are effectively blocking renewables while the earth withers.  If you’re a coal miner, you’re hoping like hell that those same suspects are effectively blocking those tree-hugging renewables and protecting us from destroying our domestic economy and electricity supply system as they tear the top off another Appalachian mountain for another layer of coal.  At least this is the general impression you get from reading most blogs and the conventional news media.  So of course it must be true.

Or maybe not.  Our friends at the Solar Energy Power Association (SEPA) decided to take a more direct approach and simply asked the utilities about their views on buying solar power.  SEPA just released the results of its Utility Procurement Study entitled ”Solar Electricity in the Utility Market”.  Not exactly light casual reading, this 117 page report gets high marks for being candid, clearly written, and a surprisingly comprehensive overview of how power, especially renewables, have been purchased by utilities over the years. And then of course there are the conclusions.

1. Solar is just too damn expensive and so far utilities can get all the power their customers  need from lower cost sources
2. When utilities do buy solar, they buy it because they’re made to do so by state laws and regulations that say buy it anyway, price notwithstanding (thus their collective asses are covered by regulatory mandate as they pass on these politically acceptable higher costs to their rate payers)
3. But utilities really do like the non-price features of clean,  no emissions, no-carbon solar energy ……really, they do….a lot….it’s on the top of their like list
4. The solar developers need to suck it up and stop bitching about the tough terms and conditions of the power purchase contracts
5. The solar developers need to learn how to make firm price bids and then stick with ‘em – just like all the other developers – sure, all you solar guys are special but you aren’t that special
6. The utilities need to chill some and start offering kinder, gentler long term power purchase agreements that weren’t written by lawyers from hell (hope springs eternal!)
7. Utilities need to take some 400 level courses on solar and the solar developers need to supply the instructors and coursework
8. Utilities just aren’t very impressed with the on-peak aspect of solar and wish the developers would stop harping about it – and developers have a hard time believing this for good reason
9. The cost of solar energy needs to come down and when it comes down far enough the utilities will run….not walk….towards solar. Depending on who you talk to this is 2-5 years away from a tipping point.

So there you have it. Mostly solar costs too much. The report goes into much more detail of course but it more or less makes many variations on the above points albeit with dryer language.

Notice the absence of big oil or other dark sinister actors? Unless you consider the uitlity business to be inherently dark and sinister. But really, utilities just want to keep the lights on, the politicians happy, and the regulators off their backs while they earn a 10-15% return on invested capital. Is that asking too much?

Bottom line on solar energy and most other forms of more expensive renewable energy is this:  If we’d all agree to accept paying twice as much for our electricity then we do now, then solar, and renewable energy generally,  would explode and over the next 10-20 years coal would slowly recede. Who’s ready to sign up for doubling their power bills?  Don’t all raise your hands at once.

Alternatively, the feds could lead with a nationally mandated renewable energy portfolio standard with painful consequences for non-compliance by the load serving utilities. See item #2 above for clarification. Either way we would end up paying much much more for the cleaner energy we need – say maybe twice a much.

It’s really not much more complicated than that.  Call or write your state utility commissioners and state representative and tell them that it’s ok to double your electrical bill if that’s what it takes. And you won’t bitch or hold it against them during the next election. Promise!

Tags: energy policy, renewable energy, solar