Eugene Weekly : Viewpoint : 12.10.09

Solar on the Horizon
The whole-system approach works
by Ray Neff

It’s great to see solar photovoltaics (PV) gaining such prominence in our community’s energy discussion, even if some of the points are based on misconceptions that are cleared up with new information.

A whole-systems approach, renewable energy Feed-in Tariff (FIT) policy addresses the interrelated challenges of climate change, job creation, energy security and sustainable economic development. Simply put, a FIT requires the electric utility to purchase all electricity produced by any customer-generator. The best policies set a rate designed to pay off the generation equipment with a reasonable rate of return, over a 15-20 year contract. This provides investment security to lenders since customer-generators have a guaranteed income to ensure repayment. Loan repayments could even be attached to property taxes as the Berkeley FIRST incentive program does. FIT rates should also be differentiated by renewable energy technology to ensure a diverse energy mix and efficient operation without generating windfall profits. Program costs are spread across all ratepayers equitably since we all use the energy. FIT policy democratizes energy production, leveling the playing field between potential generators whether they’re a traditional energy corporation, a homeowner or small business with little disposable income yet good credit and a suitable rooftop, or a farmer with under-utilized agricultural land. Everyone contributes to the restructuring of the electricity supply network.

A 2009 report on the potential impacts of climate change on the Upper Willamette River Basin, from the Climate Leadership Initiative at the UO, suggests that by around 2040 our bioregion is likely to see: an increased average summer temperatures of 4 to 6° F; slightly less precipitation during spring, summer and fall; and a 60 percent decrease in snowpack in the Pacific Northwest. 

A 2008 study by the Bonneville Power Administration (BPA) on future Northwest power supply states that by 2013, “the flexibility of the hydro system has reached the limits of its ability to meet sustained peak loads, such as a three-day cold snap or heat wave in a dry year.” Climate change will likely have a significant impact on both the demand for electricity and our historically inexpensive, abundant hydropower resources.

Experience in Germany and more than 40 other countries demonstrates that a FIT is the most effective policy instrument to rapidly deploy new renewable energy generation capacity, drive down costs and encourage technological innovation, while creating jobs and investment in the local economy. Similar policies have been established in Gainesville, Fla., and in the state of Vermont during 2009, while states from Michigan to Arizona to Oregon are developing FIT policies. Germany’s FIT has been so successful that they’ve eliminated all other solar subsidies. The program costs about $4.50 per month per household for all additional renewable capacity.

Germany, with even cloudier weather than Oregon, installed close to 3 gigawatts of solar in 2009 alone, while the U.S. total is only about 800 megawatts (MW). More than 40 German companies now produce solar PV components, employing 20,000 people. Between 2000 and 2004, electricity generated from solar PV in Germany increased nine-fold, while the volume of wind and biomass generated electricity doubled. Electricity from all renewables in 2006 in Germany increased to a total of 11.8 percent. The industries continue to grow. 

Research indicates that we could generate 68 MW of electricity in Eugene from solar PV on large commercial and public buildings alone; this does not include additional capacity from homes, parking lots or brownfields. Three of four EWEB-owned hydroelectric projects generated 71 MW in 2007 (of 185 MW total EWEB-owned hydro). Every city in the world, like Eugene, has under-utilized urban infrastructure that could be generating electricity from solar and other renewable energy technologies.

A 2007 University of California study shows that solar PV “creates more jobs per megawatt of capacity than any other energy technology — 20 manufacturing and 13 installation/maintenance jobs per megawatt.”  Installing 68 MW of solar in Eugene could create close to 2,000 jobs in the local economy, while LCC’s Northwest Energy Efficiency Institute continues to train the next generations of solar and energy efficiency technicians. Energy dollars recirculate longer in the local economy, capital begins to flow to electricity customers who become energy producers, while neighbors are employed in the growing renewable energy industry. 

In Germany, the renewable energy industry now employs more people than the nuclear energy and coal industry combined, while in Denmark more than 150,00 families have invested in wind turbines individually or through cooperatives.

Establishing the right renewable energy feed-in tariff policy design and taking advantage of the policy mechanism’s design flexibility provides citizens, businesses, farmers, government or non-profit agencies and all members of the Oregon community the opportunity to mitigate the impacts of climate change while improving the economy for Oregonians, now and into the future.

Ray Neff recently authored The Right FIT for Oregon: Solar PV in Eugene as a Case Study in Feed-in Tariff Policy Design for his master of community and regional planning degree at the UO.



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