It would be nice if the solar power industry could find a way to just get along with electric utilities. After all, solar adds so many benefits to the electric grid that could help utility electricity providers to keep rates down while offering the clean power that their customers increasingly demand.
If the two industries could work together we could fight climate change, increase America’s energy independence and make the power grid more resilient, all while cutting costs for ratepayers. No wonder solar is so popular in national polls.
Utilities around the world recognize that because of growing public support, solar is sure to continue to grow. In some of the top solar states in the US, from California to Massachusetts to North Carolina, utilities often play well with the solar industry. In other states, at least utilities appear to have signed a truce with solar installers and developers.
But in too many sunny states electric utilities appear downright hostile to the solar industry and uninterested in putting in much solar themselves. And as solar grows, utility opposition seems to only get worse.
The Empire Strikes Back
In 2012, the Edison Electric Institute, the lobby for monopoly power utilities, warned its members that distributed solar was poised to pose a serious threat to their business. According to the Washington Post,
If demand for residential solar continued to soar, traditional utilities could soon face serious problems, from “declining retail sales” and a “loss of customers” to “potential obsolescence,” according to a presentation prepared for the group. “Industry must prepare an action plan to address the challenges,” it said.
The warning, delivered to a private meeting of the utility industry’s main trade association, became a call to arms for electricity providers in nearly every corner of the nation. Three years later, the industry and its fossil-fuel supporters are waging a determined campaign to stop a home-solar insurgency that is rattling the boardrooms of the country’s government-regulated electric monopolies.
By 2015, after failing to win the sympathy of state legislators whose constituents supported solar by overwhelming margins, utilities had taken a different tack. They started appealing to state energy regulators, who are unaccountable to the public and more open to utility influence.
In perhaps the most maddening example, working with the Nevada Public Utilities Commission, in early 2016 the state’s major utility NV Energy managed to roll back favorable net metering rules in place for years.
For months the solar industry was in an uproar about the changes. Then, in the first quarter of 2016, after large rooftop solar installers Vivint Solar, SolarCity and Sunrun made good on threats to pull out of the state, new permits for residential solar installations in Nevada dropped 92%.
Thus, the stage was set for taking Nevada down from one of the best states for solar to one of the worst.
If You Think Nevada Is Bad, Try the Southeast
The epicenter for utility pushback against solar is the sunny southeast, where a report called “Throwing Shade” put out in April 2016 by the Center for Biological Diversity identified ten sunny states blocking distributed solar, including my state, Virginia.
“These states could produce a ton of clean energy, but they’re choosing not to,” writes author Julian Spector analyzing the report.
In theory, those 10 states could produce up to 35 percent of the nation’s energy supply from rooftop solar installations. Instead, they only account for 6 percent. If we imagine a world where men and women could install solar panels wherever they provided the most benefits, we would expect the regions with the most potential to have the most installations. State policies and regulations intervene, though.
“Despite the incredible potential for homegrown solar power in the sunny Southeast,” writes Kate Ottenweller of the Southern Environmental Law Center in the New York Times, “some utilities are working to erect barriers and create restrictive rules that protect their monopoly instead of allowing Americans to choose their energy source on an open market.”
Ottenweller identifies three barriers to solar that these utilities try to to get their states to put in the way of solar:
- Forbidding PPAs or other financing that would take the sting out of the high upfront cost of a cash purchase
- Charging solar customers up to $85 per month in standby charges and other punitive fines and fees for not using enough power from the grid
- Underpaying solar customers who sell power back to the grid, giving them as little as 3 or 4 cents per kWh, and then selling that same power to their neighbors for three times that amount
Outdated ways of carving up America into regions may dismiss the whole South as one big backward area that should make sure its citizens have running water and shoes first (Snuffy Smith, anyone?) before southeastern states start worrying about getting more solar.
But it would be a mistake to lump in perennially poor states like Alabama or Arkansas with the dynamic economies found today in North Carolina, Georgia and Virginia.
“The South Atlantic coastal states from Virginia to Florida represent one of the most dynamic regions of the country,” according to politics blogger James Bacon, who brings population growth data to back up his claim.
Specifically, Bacon explains that the Southeast is growing faster than in other areas, a sign of prosperity in the region. By the year 2040, Virginia will bump Michigan from the list of ten most populous states, North Carolina will climb ahead of Ohio to take the No. 8 spot, and Georgia will supplant Illinois for No. 6.
Potential to Be the Next Big Solar Market
Population growth and the economic growth it will bring, along with lots of sunny days, means that the solar industry can’t afford to ignore the Southeast any longer. As markets in California and New Jersey start to mature for solar, Georgia and North Carolina are going to open up, offering big opportunity for solar companies smart enough to get in early.
So far, the big residential installers have mostly avoided the area as unprofitable. That has left dozens of small local installers to serve growing demand for home and commercial solar.
But it’s also left the fight for public policy up to the little guy with little help from bigger solar allies. The daunting challenge to make policy changes necessary to realize the Southeast’s natural potential as a solar powerhouse has fallen to a scrappy coalition of underfunded regional solar trade associations, green groups with little influence over conservative state legislatures and small local solar installers.
As a result, in lobbying, the fledgling solar industry has been massively outgunned by big monopoly electric utilities with massive influence over state legislators and scary clout with public utilities commissions. In other words, a classic David vs. Goliath contest.
Some activist groups like it that way. In my state of Virginia, for example, VA Sun is a non-profit that has helped thousands of homeowners get solar despite a lack of state incentives through buyers’ co-ops similar to Solarize programs. The group hopes to recruit all their homeowners as an army of activists to push for better solar policies in the state in the coming months and years.
But many solar companies in the state are tired of fighting one uneven battle after another against our state’s biggest electric utility, Dominion. As Virginia’s largest contributor to state politicians, when it comes to energy policy in the state, Dominion is the very definition of Goliath. Over the years, they’ve successfully killed or watered down nearly every bill that the solar industry ever brought to the general assembly.
Ultimately, that can’t continue. Even Dominion, so invested in natural gas in western states, has got to see that solar will win in the end. They’ve done a little solar on their own and have announced plans to do a little more. But if the company continues to have their way in the state capital by killing policy favorable to distributed solar, then solar’s day will be delayed by decades.
The Solar Industry Now Has Another Choice Besides Patience
If the solar industry’s only choice was to politely wait for better solar policy, and maybe try to help things along a bit by continuing to run grassroots campaigns that make incremental changes every couple years, then solar companies would just have to put up with doing business in unfair markets for a lot longer.
But fortunately, today, continuing to fight as little David against big ol’ Goliath is not the only option for the solar industry in Virginia or throughout the Southeast. Now, solar may be able to recruit its own Goliath to start to even the odds with big utilities.
That Goliath is the technology industry. And in May of 2016, tech giants including Facebook and Microsoft announced an alliance with Business for Social Responsibility and other non-profits to ramp up solar by bringing in big corporate buyers of power to demand clean power and especially solar.
They’re calling themselves the Renewable Energy Buyers Alliance and they want to create demand for another 60 gigawatts of clean energy available to corporate buyers in the United States by 2025. That would double the amount of solar and wind available on the grid in 2014.
The initiative hasn’t announced staff or budget yet, but the tech companies involved seem serious about using the group to increase clean power generation.
Tech Companies May Be Serious This Time
Why would tech companies want to pay more to get clean energy than just using cheap power from the grid?
First, Silicon Valley culture is naturally friendly to innovation, including new energy sources, and impatient with coal power because it’s both dirty and old.
Second, as cloud computing has exploded, Greenpeace and other activist groups have begun pummeling tech companies for supplying the huge energy needs of their data centers from the grid, powered as it is largely by fossil fuels. And to help them get more clean energy, since 2012 a project of Business for Social Responsibility called the Future of Internet Power has been consulting with nearly a dozen big Internet companies including eBay, Facebook and Salesforce.
The tech companies seem to be getting it. And some have already committed to getting 100% clean energy.
“Social media giant Facebook now makes availability of a renewable energy supply one key criteria of new data center siting decisions. That means states that can’t address this need could miss out on that economic opportunity,” according to GreenBiz.
“In some markets, particularly regulated markets in this country, it’s difficult to buy clean energy — in some cases more or less impossible,” said Bill Weihl, Facebook’s director of sustainability, during the briefing.
By working together with other companies and utilities to develop more standard procurement frameworks or to develop products that make sourcing solar or wind power simpler, REBA can accelerate acceptance, he said. “As more deals get done, we’ll develop more standard models. When people have seen them before, it makes it much easier to get them done.”
Facebook’s long-term goal is to source all of its power needs using renewable energy. As a short term “stretch goal,” Facebook hopes to ensure that 50 percent of its supply is generated through clean power sources by 2018, Weihl said. Facebook today has data centers in Iowa, North Carolina, Oregon and Texas. It leases space in Virginia.
“We’re interested in expanding the market everywhere, but particularly in states where we have a presence,” he said.
That’s of course wonderful news for two Southeastern states, North Carolina and Virginia. It’s also good news for the Southeast: Dominion Virginia is one of three utilities, including Berkshire Hathaway Energy and Xcel, that are scheduled to take part in the buying group’s first summit to be held at Microsoft’s headquarters on May 18-20.
Does this mean that maybe we can all get along, utilities and the solar industry? The optimist in me says maybe.
But the realist in me says that the solar industry should try to appeal to the tech giants to become giants in solar policy too. Let them talk to Dominion and Xcel through the new buyer’s alliance. But also let them counter the traditional influence of utilities in state legislatures around the Southeast, where the solar industry needs lobbying help the most.
How Virginia Can Show the Way for the Whole Southeast
I’ll finish off with the example of my own state of Virginia. The Old Dominion is not just a solar laggard nationally. Even by the low standards of the Southeast, Virginia does poorly for installed solar, ranking behind all its Atlantic coast neighbors to the south except South Carolina.
Perhaps lessons from Virginia can be applied to other Southeastern states cursed on the one hand with bad policy profiles for solar — cheap grid power, conservative state legislatures and influential monopoly utilities — but blessed on the other hand with big companies eager for more solar.
Virginia is especially ripe for tech companies to flex their muscles advocating for solar policy.
Terrible in solar generation, Virginia is awesome in cloud computing.
Up to 70% of all Internet traffic flows through data centers in northern Virginia’s Loudoun County alone each year, putting it in “the very upper echelon of data center clusters in the country, rivaling Silicon Valley, the New York suburbs and the Dallas area,” according to the Washington Post. The federal government runs data operations locally along with key companies including Microsoft, Google, Amazon and Northrup Grumman.
Special attention should go to Equinix, not a household name but one of the leading operators of data centers in Northern Virginia. Greenpeace praises the company as a leader in sourcing clean energy:
Equinix’s adoption of a long-term commitment to be 100% renewably powered is by far the most significant change since Greenpeace last benchmarked the data center sector in 2014, and sets an important new bar that other colocation providers will need to meet as more and more of their customers make greenhouse gas and renewable energy commitments. At least for the short term, Equinix has established a clear competitive advantage.
These companies could be just the Goliaths that Virginia needs to level the playing field with Dominion in the fight for better solar policy in Richmond.
As a sometime solar lobbyist, I’ve seen for myself what happens when the solar industry manages to bring a bill to the general assembly.
When the usual coalition of small clean energy trade group lobbyists, environmental activists and local solar installers makes comments at a committee hearing, legislators smile politely. But when Dominion talks, they listen. And when it comes time for action, Dominion gets 90% of what they want, usually leaving the solar industry to go home with a few crumbs at most.
But it wouldn’t be so easy for legislators to dismiss Microsoft, Google and Facebook — or in Virginia, Equinix — if they came to lobby for solar. It’s time for the solar industry in Virginia, and throughout the Southeast, to start making overtures to these tech giants to recruit them as solar Goliaths.
And I don’t forget that in the Bible story, David did beat Goliath, despite the giant’s size. So maybe a hybrid strategy of grassroots activism and recruiting big corporate allies could be just the slingshot that the solar industry needs to start winning more of its policy battles in the Old Dominion.
I just hope that if tech giants enter the fray, they won’t be satisfied getting Dominion and other utilities to build more large solar arrays that provide renewable power but reproduce the century-old utility model of centralized control. Instead, I hope the tech companies will demand that some of the solar they need come from distributed generation, realizing the true promise of solar to provide power to the people.
Thanks to Jim Pierobon at The Energy Fix for alerting me to a couple articles with news about REBA.
— Erik Curren, Curren Media Group