SOLAR TODAY - July/August 2010

SOLAR TODAY®
JULY/AUGUST 2010
VOL. 24, NO. 6

Why a federal renewable portfolio standard,
building upon the track record of state-level success,
can generate multi-partisan support and
address some of our most critical challenges.
By DAVID G. HILL, PH.D.

Copyright © 2010 by the American Solar Energy Society Inc. All rights reserved. in place cover roughly 40 percent of the total electric load in the United States. (See Renewable Energy Standard fact sheet, Solar Energy Industries Association: seia.org/galleries/Fact Sheets/Factsheet_RES.pdf). By expanding this coverage to 100 percent — or close to 100 percent, if public, co-op and smaller utilities are exempt — a national RPS will significantly boost market size and competition across renewable energy technologies. The increased market size will drive new jobs and job training needs, as well as investment in the manufacturing plants and business models required to meet national targets. With more than 30 countries — including China and many European Union countries — adopting their own national RPS standards, the United States needs to grow our domestic renewable industries so that we can compete effectively for business at home and abroad.

Second, as demonstrated by recent accidents in the coal and oil industries, energy security and safety continue to be very real concerns — even though they are not always front-page news. A national RPS will help make the United States more secure and reduces our risk from accidents, international incidents and energy-based geopolitics. These risks apply to both the nuclear and fossil fuel industries. Put simply, renewable energy is safer and more secure than other energy options. The public understands this intuitively — and it is a key reason why a national RPS will generate broad-based political support.

Third, a national RPS that meets and, ideally, exceeds President Obama’s objective for 25 percent of our electricity supply to come from renewable resources by 2025 is essential to any plan for effectively reducing our emissions of greenhouse gases. “The American Solar Energy Society’s Policy Recommendations for the 111th Congress” includes implementation of a national RPS reaching 28 percent by 2020 and 50 percent by 2030 ( ases.org/policy2009). While energy efficiency and other strategies are also required, significant progress toward reduced emissions

What Have the States Done?

Experience gained through the design and implementation of more than 29 state-level RPSs offers valuable lessons for legislators and policy advocates. In several cases where policies have been successful, state legislators and citizens have enhanced, increased or accelerated RPS goals.

For example, in California, the original RPS targets were established in 2002 under Senate Bill 1078 and then accelerated in 2006 under Senate Bill 107. California’s RPS is one of the most ambitious renewable energy standards in the country. The RPS program requires electric corporations to increase their procurement from eligible renewable energy resources by at least 1 percent of their retail sales annually, reaching 20 percent by 2010 and 33 percent by 2020. As of 2009, the California Public Utilities Commission (CPUC) reports the three largest investor-owned utilities collectively served 15 percent of their retail electricity sales with renewable power ( www.cpuc.ca.gov/PUC/energy/Renewables/ index.htm).

California’s experience illustrates the challenges and ongoing work required to meet aggressive renewable standards and to integrate these standards with long-term utility plans for energy procurement. But it also suggests that renewable resources and technologies, in both distributed and central applications, are available to serve customer needs even in some of the largest electricity markets. (More information about California’s RPS and ongoing progress is available through the CPUC’s regular reports to the legislature, e.g., tinyurl.com/2e623tw.)

Colorado provides another example of growing momentum and increasing state targets. In 2004, Colorado was the first state to have a renewable portfolio standard passed by voter initiative.

is simply impossible without rapid expansion of renewable energy at the national level. The urgency of this issue could not be more acute.

David Hill is a managing consultant at Vermont Energy Investment Corp. ( veic.org), a national energy-efficiency and renewable energy organization with headquarters in Burlington, Vt., and additional offices in New Jersey and Massachusetts. Hill is the American Solar Energy Society’s Policy Committee chair and a member of the ASES Board. Contact him at dhill@veic.org.

It initially required that by 2015, 10 percent of retail sales be met by renewable resources. Since then, the legislature has increased the standard twice, raising the requirement to 20 percent by 2020 in 2007, and then acting again this year to increase the standard for 2020 to 30 percent.

The Texas experience indicates that an RPS can garner support and succeed in red and blue states alike.

The latest legislation, which was signed into law by Colorado Gov. Bill Ritter on March 22, requires investor-owned utilities to draw on distributed generation for at least 1 percent of their retail electric sales in 2011 and 2012, ratcheting up to 3 percent by 2020. At least half of the requirement must be met with retail distributed generation. According to a press release from the governor, that requirement will spur at least 100,000 additional solar rooftops over the next decade.

But how does utility compliance with RPS requirements affect retail electricity costs? Projections, as well as results based on actual compliance from existing state markets, indicate that rate increases associated with RPS compliance have been less than 1.5 percent of retail rates.