Last Mile Problems for Renewable Energy are a Signpost of Mainstream Success

By any measure, renewable energy especially wind and solar have been real success stories. Their growth has been facilitated by the mother’s milk of Federal subsidies and state renewable portfolio standards.  The renewable industry has grown from a fragmented collection of mom and pop businesses to a consolidating web of global companies increasingly controlled by the giant Fortune 1000 firms.

Thanks the insatiable desire of China for exports and its willingness to reverse engineer and then mass produce virtually any technology it can get its hands on, the price of wind turbines and solar photovoltaic panels have been dropping quickly in their quest for market share dominance at grid parity prices.

What’s not to like about lower prices?

If you are a consumer, lower prices are good news.  If you are a domestic manufacturer of wind turbines or solar panels, China is your worst nightmare.

For governments with feed-in-tariffs and other subsidies designed to grow local market share for domestic producers with industrial policies lower prices often mean those subsides meant for the locals are being vacuumed up by China exports growth into subsidized markets.

Today, the American Wind Energy Association spends more time and money lobbying Congress for more subsidies than anything else it does for the industry.  It has been relentless in pursuit of a national energy standard—a national portfolio standard of 15% to 20%—designed to insure that the subsidies keep flowing and the market keeps growing as the state renewable portfolio standards of typically 20% near achievement.

For many in the solar industry the answer to competing with China is to avoid the death spiral of falling commodity prices for PV panels and instead focus on the segments of the supply chain China cannot so easily dominate like new, improved technologies, services, installation and customer aggregation.  This morphing of the solar industry enables it to offer more products and services that provide complete solutions to customers rather than the commodity sale of PV panels alone.

To RES or not to RES: That is the question

The wind and solar lobbies in Washington continue to push for a national renewable energy standard because they want to both protect the Federal subsidy programs and expand  the RPS standards to the states who have not yet adopted them.  This has been a tough sell and will not get easier as concerns over rising federal deficit spending take center stage.

Many states that adopted RPS standards over the last decade are now reaching their goals.  EGADS!  Let’s raise the target which is how California got to an unofficial but still enforced RPS goal of 33% when the state law says the target is 20%.  But the more likely scenarios is states will “declare RPS victory” and NOT raise their standards further because they will not be able to offer future subsidies and pressure to hold down utility rates is rising rapidly.

Mainstreaming renewable energy was the dream of  advocates—that has been achieved. Now he challenge will be to sustain the momentum with new technology, better efficiencies, more transmission access and—yes, lower prices.

More recently we are hearing more concerns raised about what I call the “last mile problems” for renewable energy.  These are the NIMBY problems of local building codes and permitting issues limiting where a wind turbine can be located or specifying that PV panels on a rooftop should not be seen from the street.  Cell phone towers and other newer technologies all face these issues.

Actually complaints about last mile problems are a “good” signpost because it means market penetration rates are substantial enough that permitting, design, placement and other issues are rising the a level that are material in the community.

A recently released study by a large solar company, SunRun, complained that local building permit, inspection processes and fragmented standards would cost the industry more than $ 1 billion over the next five years and that going to a standardized national building code would put solar energy within the reach of 50% of America’s homes.

In this industry-sponsored report, “The Impact of Local Permitting on the Cost of Solar Power,” SunRun and its co-sponsors complain that fragmented local solar permitting and inspection requirements add about $2,500 or $0.50 per watt to the cost of a typical home solar system installation.  The report urges US DOE to get involved to push for standardized permitting and inspection standards across the US.  To date, 22 major solar installers nationwide have endorsed this report as have The Sierra Club, SolarTech, and Vote Solar. US DOE is reviewing the report.

The Datebase of State Incentives for Renewable Energy and Efficiency (DSIRE) offers useful summary of all the permitting requirements that renewable energy and efficiency projects must meet.  While this isn’t new to home builders, remodeling contractors and other building trades they often to do not have the political connections or lobbying skills of renewable energy proponents.  There is a lot to be said for streamlining building codes and standardizing code enforcement to make it more efficient.  And in these days of tight state and local government budgets doing so seems like a winner for both the industry and the government.

Yes but it is so ugly!

One of the ‘eye of the beholder’ last mile issues for both wind and solar energy is not the building code issues related to safety—it is esthetics—we don’t want to look at or hear wind turbines in our neighborhoods or have our kids traumatized by the ‘cuisinarting’ of birds as the objectors might describe it.

For wind energy this issue revolves around siting a wind tower. All wind towers are electrical generation systems subject to the uniform electrical codes most state and local governments use. But some cities and counties have imposed zoning restrictions which limit where wind towers may be built. Sometimes these regulations are driven by safety concerns but mostly they respond to complaints from residents eager to protect the view.  National standards are not going to solve this truly local problem.

Attempts have been made to mitigate he impacts of this new technology.  That’s why we have cell phone towers that look like artificial Christmas trees sticking up where it is still obvious but just faded plastic green.  You see what I mean, dealing with the locals is still going to take time and will not be solved by national building codes no matter how much SunRun wishes it o be true.

These ‘growing pains’ for renewable energy are a signpost of success.

While they may be frustrations for the industry today collaborative action between state and local officials who support renewable energy, utilities that are net metering buyers of distributed generation  and companies who seek to gain competitive local advantage by learning how to work the system when others cannot will also reduce the problems over time.  As renewable energy market share grows and more homeowners see the benefits of solar energy on their homes and wind energy in their communities complaints will also fall.

For solar energy the other transformation factor ahead is the improvements in technology that allow solar cells to be embedded in standard roof “shingles” instead of flat panels thus taking the ugly issue away entirely.

For wind unless micro turbine technology improves dramatically, the best potential for wind will continue to be larger utility scale plants located where wind energy resources are the best.  The issues there are interconnect and transmission more than local building codes or view impediments.