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Solar Power Rising to a Million Roofs in the Millennium

Home Energy Magazine Online July/August 1999

Solar Power Rising to a Million Roofs in the Millennium

by Jeanne Byrne

Solar hot water installations get plenty of radiant heat in the Maunaloa Terrace Navy Family Housing in Oahu, Hawaii.

In an effort to spark a sustained solar renaissance and cut U.S. emissions of global warming gases, President Clinton in June of 1997 announced an initiative to put solar energy systems on a million U.S. rooftops by the year 2010. The initiative is part of an effort to counteract the fact that, despite great strides, solar power is still not a major energy source in the United States. The initiative addresses both photovoltaics (PV) (which produce electricity from sunlight) and solar thermal panels (which produce heat for domestic hot water, space heating, and swimming pools).

With the Clinton administration's Million Solar Roofs Initiative (MSRI), the U.S. Department of Energy (DOE) hopes to increase the market for solar applications enough to drive down prices and maintain a strong, viable U.S. solar industry (see "Why Solar Roofs?" HE, May/June '98, p. 2). According to a DOE analysis, solar domestic hot water systems currently cost between $1,800 and $3,500, and are cost-effective when used as substitutes for electric-resistance water heating at utility rates of 8¢/kWh or more. The economic equation for PV varies significantly from state to state. DOE calculated the break-even prices for PV power systems in every state based on factors such as the available solar resource, local utility electricity rates, and any tax incentives. Hawaii, California, Arizona, New York, and Massachusetts were the top five states, with break-even prices of $4.30 $7.50/W. Today's prices for PV-generated electricity are $6$7/W.

DOE neither pays for nor controls projects under the initiative. Instead, the focus is on partnerships among government, the solar industry, businesses, and community organizations. For such partnerships, DOE provides training and technical assistance, access to financing, and recognition and support.

Solar Partnerships

MSRI partnerships work on increasing the installation of solar energy systems by removing market and building code barriers; establishing training programs; providing incentives for solar energy; and increasing cooperation among government, the solar industry, and community organizations. As of April 1999, 36 state and local partnerships formed by utilities, cities, and nongovernmental organizations had announced plans to install more than 900,000 solar energy systems on buildings by 2010.

DOE has established a Million Solar Roofs Registry to keep track of the solar energy installations that meet their criteria. The registry is accessible through the MSRI Web site, which serves to publicize projects and to link interested participants with one another. To be included, a solar energy system must meet National Electric Code, Underwriters' Laboratory, and the Solar Rating and Certification Corporation standards, and must also fulfill the following requirements: (1) PV systems must provide a minimum of 0.5 kW for a residence, 1 kW for a school or church, or 2 kW for a commercial building. (2) Solar thermal hot-water systems must provide a minimum of 1 kW equivalent or 20 ft² of collector area for residential DHW; 100 ft² of collector area for residential swimming pools; 2 kW equivalent or 40 ft² of collector area for commercial DHW; or 400 ft² of collector area for commercial swimming pools.

DOE's regional offices in Boston, Philadelphia, Atlanta, Chicago, Denver, and Seattle provide technical assistance, training, and partnership development for MSRI. They also facilitate cooperation among the solar energy industry, utilities, governments, and private businesses.

Many partnerships involve state-level financial support for solar projects. For instance, the New York State Energy Research and Development Authority (NYSERDA) has just made $1 million available for grid-connected PV projects. They will pay up to half of the cost of each project. Other exemplary MSRI partnerships have been set up in Massachusetts and in Aspen, Colorado.

Massachusetts Community Solar Program. Massachusetts, led by New England Electric Service, was one of the first state and community partnerships to join the initiative. Currently, Massachusetts Electric Company's Medford Solar Project is giving city residents an opportunity to purchase one- or two-panel PV systems for their homes at half the normal price. The company also installed 16 donated solar panels last December on the city hall and at Medford High School. Students learn about solar electric systems through solar demonstrations at the high school, while officials at the city hall are using their systems to learn how the sun can help them save money on their electric bills.

The U.S. Department of Energy, through the Utility PhotoVoltaic Group's TEAM-UP (Technology Experience to Accelerate Markets in Photovoltaics) program, funded part of the Medford Solar Project. For additional information, contact Karen Berardino, Massachusetts Electric Company. Tel:(508)389-3102.

Colorado's Solar Cash Incentive Program. The Community Office for Resource Efficiency (CORE) in Aspen, Colorado, is offering a new PV cash incentive program for residents of the Roaring Fork Valley. The Sun Power Pioneers program offers up to $3,000 in cash incentives to those who install new PV systems. Participants earn 25¢/kWh for all the energy their system produces over three years. In addition, homeowners and businesses that install PV systems before July can receive up to $2,500 in rebates from the governor's Office of Energy Conservation.

The Sun Power Pioneers program began on February 1, 1999, and funding comes from the Turner Foundation; the Cities for Climate Protection Campaign; Aspen Skiing Company's Environment Foundation; and CORE's local sponsors, Aspen Municipal Electric and Holy Cross Energy. The program will operate on a first-come first-served basis, while funding lasts. For additional information, contact Randy Udall, E-mail: Rudall@aol.com; or Joan Matranga, Tel: (970)544-9808.

Improving Financing Options

About a dozen states have established renewable-energy funds to purchase, finance, and/or buy down the cost of solar energy and other systems. When fully implemented, these funds will provide more than $1 billion between 1997 and 2002 for renewable energy, including solar. To help people find out what solar financing is available in their area, DOE has provided funding to the Interstate Renewable Energy Council and the North Carolina Solar Center to put together the National Database of State Incentives for Renewable Energy (DSIRE). This database contains information on all state tax credits, grants, special utility rates, and other state incentives.

Another important action for states to take is to implement net metering, in which a building owner's electric meter simply runs backward when the PV system is supplying power to the grid. By having a PV system that is connected to the utility grid, a homeowner can avoid buying batteries for backup at night and on cloudy days--and can skip paying for one of the most expensive parts of installing PV systems on homes.

With net metering, not only does a PV system become much more cost-effective, but the utility pays the customer as much for generating excess power as it charges that customer to buy power from the grid (see "Promoting Profitable Home Power," HE Jan/Feb '98, p. 31). However, in some states, utilities can foist complicated interconnection agreements on customers and pay them little for the power supplied by individual PV systems. A goal of MSRI is to remove this barrier by establishing net metering in all states, along with uniform interconnection standards for solar electric systems. Currently, 23 states offer net metering. There is also activity in Hawaii, Illinois, Montana, and Oregon that may lead to new legislation.

Even where interconnection standards exist, complicated agreements can be a significant barrier for owners of small buildings. Moves are under way to reduce this barrier. For instance, last March, California's three largest utilities developed simplified interconnection agreements for small (under 10 kW) PV producers. Rhode Island now has a one-page interconnection agreement.

Federal Efforts

To help the MSRI succeed, the federal government is doing its part to remove barriers, provide incentives, improve regulations, provide technical assistance, and install solar energy systems on its own buildings. President Clinton has committed the Federal Energy Management Agency to installing 20,000 solar energy systems on federal facilities by 2010. As an interim goal, federal agencies have plans in place to install at least 2,000 systems by the end of 2000.

MSRI hopes to improve options for solar energy financing in mortgage loans by working with the secondary mortgage markets and private banks. MSRI is also targeting several federal agencies for improved codes and regulations that will foster solar energy as a viable technology option. For example, the Environmental Protection Agency just started allowing states to obtain air quality credits for solar energy installations and energy efficiency improvements under the Clean Air Act amendments. Other examples of its program efforts include establishing uniform loan regulations and program descriptions for solar energy financing in the secondary mortgage markets through Fannie Mae and Freddie Mac; and working with the Federal Emergency Management Agency to incorporate solar energy applications into their Disaster Resistant Communities Program.

New Growth

With growing support from government, utilities, and community organizations, the solar industry does seem to be making progress. According to the Solar Energy Industries Association (SEIA), the industry has grown by 20% for the past five years. For example, five new solar manufacturing facilities have recently come online in California, Delaware, Massachusetts, Ohio, and Virginia.

SEIA reports that 25,000 solar pool heating systems, 6,000 solar water heating systems, and 3,000 solar electric systems were installed in the United States in 1998. The Million Solar Roofs Initiative should triple this rate of installation, helping costs to come down and solar companies to gain stability.

The break-even prices for PV power systems are based on factors such as the available sunshine, local utility elctricity rates, and tax incentives, if any. PV is currently cost-effective only in Hawaii, but is pretty close in California, Arizona, New York, and Massachusetts. PV prices must come down, or tax incentives must be increased, for it to be effective in other states.

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