Update on Solar, Electric Cars & Energy Policy

Making Tracks to the Renewable Future

After all that I have written in this column about the enormous challenges that the future of energy holds, it’s good to focus once in a while on the progress that is being made.

So this week I have brewed up a batch of good news soup.

I begin with an update on feed-in tariffs (FiTs). (A feed-in tariff, for those of you who don’t know, is an incentive structure to encourage the adoption of renewable energy via government legislation.)

Two weeks ago, I wrote about the superiority of FiTs over our existing incentives for renewable energy and criticized California for its failed approaches. This week, I discovered that in fact California already has a FiT, which the California Public Utility Commission (CPUC) introduced on January 31, 2008.

The reason nobody talks about it is that it is an ineffective incentive based on the avoided wholesale cost of natural-gas fired generation, plus a greenhouse gas premium – far too low a price to attract much interest. Only 14 megawatts (MW) have been installed under this 500 MW program, according to a study by E3 Analytics.

But a new bill passed by the California legislature in September might improve the FiT. SB 32 would require the CPUC to include “environmental and distributed attributes (values)” in the tariffs, increase the cap on the existing program to 750 MW, raise the maximum project size to 3 MW, and make a number of other changes that should benefit rooftop solar PV projects on commercial buildings like schools, government buildings, and warehouses.

SB 32 is now sitting on Ahhnold’s desk – along with about 700 others – with a deadline for him to sign by this Sunday at midnight. Unfortunately, he has threatened a mass veto of the whole lot in his showdown with the Legislature over an overhaul of the state’s water system. I certainly hope SB 32 manages to escape that fate. It’s not a perfect bill by any means – and it still pays far too little per kilowatt-hour – but it might finally create a successful FiT in the nation’s largest power market that can be improved over time.

Three other new FiTs hit the news this week:

The Hawaii PUC decided to offer a 20-year FiT for solar projects up to 5 MW in size for Oahu and 2.72 MW for Maui and Hawaii Island (how they came up with those numbers, I have no idea). The tariff rates are not yet set, but it seems likely that with the most expensive electricity in the nation at 21.3¢/ kWh (EIA 2007 data) and a power generation system that mostly runs on fuel oil, they will be attractive. Hawaii is arguably the most vulnerable state in the nation to the threat of peak oil.

Ontario, Canada, also launched a 20-year FiT that will pay anywhere from C4.43¢/kWh for large ground-mounted PV systems (up to 10 MW) to a whopping C8.02¢/kWh for residential-sized systems (10 kW or less), when the going rate for grid power is typically C5.7 – 7.9¢/kWh. A pricing structure like that could quickly make Ontario the hottest solar PV market in North America. The province is leading the charge to a renewable energy future in Canada, with a commitment to phase out all coal-fired generation by 2014, several gigawatts of solar and wind generation built or in the pipeline, and a deal with Better Place to deploy electric cars.

Last month, India apparently introduced a FiT that embraces a comprehensive list of renewable energy sources and establishes a calculation framework for setting the rates. Depending on how the numbers turn out, India could become the next nation to deploy PV in a big way.

Electric Cars

The future of electric cars got a nice boost last week when the French government announced that it would spend about $2.2 billion to create a network of battery charging stations for electric cars. One million charging stations will be built under the plan by 2015, with 90% of them in private homes and the rest in parking lots and other sites. Additionally, all apartment buildings with parking lots will be required to install the charging stations after 2012, and all office parking lots must install them by 2015. This should result in a total of four million charging points by 2020.

The new charging network will support France’s goal of putting two million electric and hybrid cars on the road by 2020. Currently, the country has only a few thousand such vehicles. To jump-start their deployment, the government will give carmaker Renault â