Community Solar in Portland: Options and Barriers

By Andrea Lang, Energy Fellow

 

 

Credit: NREL

In my last blog post, I wrote about the difficulty of securing long-term access to solar energy as a barrier to residential rooftop solar development in Portland. However, many people, particularly in Portland, rent houses or apartments and thus aren’t in a position to install solar PV on their rental units or buildings. Even for those that do own their property, a 2008 study by the National Renewable Energy Laboratory found that only 22–27% of the country’s total residential rooftop area is suitable for solar PV installation. 

So what do you do if you want to install solar panels but don’t own a suitable roof? In some parts of the country, community solar presents an attractive alternative to individual solar ownership. Community solar refers to a system in which multiple people can invest in a solar project and receive power and/or financial benefits in proportion to their investment in the project. There are a number of models for community solar projects ranging from small-scale solar gardens and co-ops to large utility-sponsored projects. These options were explained in greater detail in a 2014  blog post by GEI Fellow Kyra Hill. More information on community solar in general is also available in the U.S. Department of Energy’s “Guide to Community Solar.” 

In Portland, however, community solar options are limited. In 2012, the City of Portland attempted a community solar pilot project, but ultimately concluded that the state’s net metering law presented a significant barrier to development of small scale, non-utility community solar projects. Oregon’s net-metering law allows solar owners to obtain credit from their utility for the amount of power they transmit onto the grid. Unfortunately, Oregon’s net-metering law provides no way for offsite solar generation to provide credit to solar owners, or for multiple solar owners to share credit for the generation from a jointly-owned system. Some other states allow what is called “virtual” net metering, which increases the viability of community solar by allowing multiple solar owners to share the benefits of net-metering from an offsite project in proportion to their ownership. Unless Oregon amends its net-metering policy to allow for virtual net-metering, it will be difficult to get community solar projects off the ground in Portland, because community solar owners cannot derive much financial benefit from such projects.

In the meantime, prospective Portland solar owners who do not own solar-suitable properties may turn to utility-sponsored “community” solar, as Energy Fellow Brandon Kline blogged about earlier this week. Under a program like PGE’s “Green Future,” the utility can invest in solar projects, while passing the cost onto those customers that choose to support the investment by joining the program. Thus, although these types of programs encourage utilities to invest in solar projects they might not otherwise pursue, they also require customer participants to pay an additional premium on their electricity bills. In short, they amount to “feel-good” programs where customers can pay more to know that some of their electricity is coming from solar, but do not otherwise provide  financial or energy benefits to the customers. In order to help community solar projects get off the ground in Portland, the state should adopt virtual net metering legislation that truly incentivizes development of jointly-owned, offsite solar projects.

Green Defaults Help Consumers Choose Renewable Future

By Brandon Kline, Energy Fellow

“The future ain’t what it used to be,” the great Yogi Berra once said. In the world of energy policy, the existing path for getting to the future has usually come down to engineering a trade-off between the costs and benefits for the current generation and those of future generations. Rather than an “either-or” approach, what we need, of course, is a framework that provides a balance that is good for both.

The early development of renewable energy sources means decreased dependence on imported fossil fuels.Since the late 1990s, economists have cited this trade-off in calling for restructuring electricity markets to promote newer, clean, renewable energy resources (i.e., Renewable Portfolio Standards for wind, solar, biomass and geothermal). States have a variety of approaches to Renewable Portfolio Standards.

Since 2007, Oregon’s largest utilities have been obligated to source 25% of their electricity from renewable energy by 2025.

Earlier this year, Hawai’i became the first state in the nation to require its utilities to generate 100% of its electricity from renewable sources by 2045. Meanwhile, Ohio legislators are calling for an open-ended freeze to that state’s policy requiring utilities to meet annual increases in clean-energy production.

What’s in a Renewable Portfolio Standard?

According to the National Renewable Energy Laboratory, a Renewable Portfolio Standard refers to a state-level requirement, typically established through legislation, to provide a minimum amount of energy from renewable resources. These requirements are often defined as a percentage of renewable-energy use by a given date – for example, 20% by 2020. States define what technologies are eligible for RPS requirements and which utilities are subject to them.

But not every state has adopted a Renewable Portfolio Standard. As of the end of 2013, 29 states and the District of Columbia had an RPS in place, while eight states had voluntary renewable-energy goals.

With that backdrop, last week Portland General Electric announced a new limited program enabling customers to obtain their electricity from a solar energy project in Willamina that generates enough power to produce 2,935 “blocks” of solar energy.  This community solar program has the virtue of meeting PGE’s RPS requirement while allowing PGE customers to make a choice that reduces their carbon footprint.

Such community solar programs have gained popularity as utilities and developers have started to see a serviceable market for households that want to plug into renewable energy sources, but are precluded by their circumstances (e.g., renters, apartment dwellers, and others).

Why not implement an automatic green default? That way, utilities would have to automatically enroll customers in renewable-energy alternatives. By reversing the dynamic, consumers would have to opt-out to use fossil-fueled power, instead of having to opt-in to get clean electricity. Green defaults make it the norm to go clean rather than putting up a roadblock at the point of consumer decision-making.

In a thoughtful piece published in the Harvard Environmental Law Review, Harvard Law School professor Cass R. Sunstein and Copenhagen Business School Lucia A. Reisch make a strong case for the role of default rules in their article, “Automatically Green.” Their research suggests that public and private institutions can make great progress on environmental problems by becoming far more attentive to selecting appropriate defaults.

“If the goal is to protect the environment, and to save money in the process, default rules are an important tool in the regulatory repertoire, and they may well be able to achieve a great deal more than other tools, including those that would cost taxpayers or the private sector a great deal of money.”

Beyond energy policy, defaults play a pervasive role almost all of the choices we make in our daily lives – from fuel and emissions standards in new cars to paper receipts and plastic bags at the grocery store. In the face of weak preferences, we are often engineered to mindlessly consume as a matter of course.

Indeed, Sunstein and Reisch illustrate how this can be reversed in a range of domains.

At Rutgers University, for instance, a policy changing the computer lab’s default setting from “single-sided” to “print on front and back” reduced paper consumption by 44% – the equivalent of 4,650 trees.

Another example stands out in light of PGE’s new program. In Germany, utilities have achieved clean-energy usage rates well above 90% through green defaults. In the Black Forest community of Sch¨onau, local residents passed a referendum to establish an eco-friendly utility cooperative in the wake of the Chernobyl disaster. That company now promotes solar energy and places a great deal of reliance on renewables.

In contrast to Oregon’s PGE, Sch¨onau customers are allowed to opt out and to use other energy sources, but they have to find relevant information to identify alternatives. Almost no one opts out. Over the course of a number of years, the opt-out rate was less than 1%.

Sunstein and Reisch are certainly onto something. Clearly, green defaults are in the future.

For now, no state has gone as far as adopting a Renewable Portfolio Standard with a green default rule…although Hawai’i, with its 100% renewable RPS, comes pretty close. Or as Yogi would advise, “When you get to a fork in the road, take it.”