ILSR Senior Researcher John Farrell is giving this presentation to a collaborative meeting of the Federal Energy Regulatory Commission (FERC) and the National Association of Regulatory Commissioners (NARUC) this weekend. It highlights the proven value of distributed solar to utility grid systems and the urgent need for regulators and utilities to incorporate this value into their long-term plans, because distributed and unsubsidized solar is poised to explode as it reaches retail price parity.

1. Finding DG Value
Before it Finds You
John Farrell, Senior Researcher
Presentation 11/11/12
to FERC/NARUC Smart Response Collaborative

2. Disconnect
Res. and Comm. solar at retail price
parity by 2022
4400 MW
20 MW
Minnesota IOU solar plan for 2025

3. 10¢
•prevent blackouts
5¢ •reduce pollution
•create jobs
0¢
0¢
$4/Watt •on-site/near demand
•lower transmission losses
•reduce dist. system stress
“levelized cost” over 25 yrs.
-5¢
•hedge against fuel prices
•avoided cost traditionally
-10¢
-15¢ 4¢
How the utility ^
values distributed
-20¢
-20¢
Cost of solar Energy value
generation
Grid benefits Social benefits
Solar Power Generation in the US:Too expensive, or a bargain? - http://tinyurl.com/3tqmerh

4. 10¢
•prevent blackouts
5¢ •reduce pollution
•create jobs
0¢
0¢
•on-site/near demand
•lower transmission losses
-5¢
•reduce dist. system stress
•hedge against fuel prices
•avoided cost
-10¢
8.5¢ But it’s
-15¢ 4¢ worth
-20¢
-20¢
more
Cost of solar Energy value Grid benefits Social benefits
Solar Power Generation in the US:Too expensive, or a bargain? - http://tinyurl.com/3tqmerh

5. 10¢
and more
•prevent blackouts
5¢ •reduce pollution
•create jobs
0¢ •on-site/near demand
0¢
•lower transmission losses 12.4¢
-5¢
•reduce dist. system stress
•hedge against fuel prices
•avoided cost
-10¢
8.5¢
-15¢ 4¢
-20¢
-20¢
Cost of solar Energy value Grid benefits Social benefits
Solar Power Generation in the US:Too expensive, or a bargain? - http://tinyurl.com/3tqmerh

6. 3¢
Transmission Access Costs
l
U sua
s
es sA
B usin
2¢
$80 billion
Savings if utilities embrace DG or stranded costs if utilities persist
in large-scale transmission build-out while DG happens anyway.
1¢
Cur
rent
TAC
Dep
recia
ti on +
O&M
0¢
1 3 5 7 9 11 13 15 17 19 21 23 25
Years

7. 12¢
10.8¢ Austin Energy
Value of Solar Tariff
(per kWh)
9¢
Disaster Recovery
6¢ Loss Savings
T&D Deferral
Environment
Gen. capacity
3¢
Energy
Utilities value DG
0¢
Source:The Value of Distributed Photovoltaics to Austin Energy and the City of Austin

8. 18¢
15¢
12.8¢
12¢
(per kWh)
9¢
6¢
3¢
Austin Energy
Utilities value DG Value of Solar Tariff
0¢
2006 2007 2008 2009 2010 2011
Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin

9. Palo Alto, CA, CLEAN Program
$0.15
$0.12
$0.09
$0.06
} 6¢ per kWh
in addition to
electricity
Local capacity value
Avoided transmission access
Environmental (RPS compliance)
$0.03
7¢ Avoided transmission losses
Brown energy replacement
Utilities value DG
$0
Feed-In Tariff for PV in Palo Alto, Calif. Imminent: http://tinyurl.com/72sxgsb

10. Total Ratepayer Cost of Solar
per kWh
15¢
DG solar sweet spot
12¢
9¢
6¢
T&D costs
Required contract price
3¢
0¢
100kW 500kW 1 MW 1 MW 5 MW 50 MW
roof roof roof ground ground ground
Distribution Grid T-Grid
Sources: CAISO, CEC, and Clean Coalition, July 2011; see full analysis at www.clean-coalition.org/studies

11. Distributed solar is
happening by big
companies and
thousands of
homeowners

12. 30%
It’s launching
distributed storage
too - 30% of San
Diego EV owners
have solar

13. Distributed Solar Potential at Parity by 2022
(residential and commercial MW)
360 1140
700 20
1200 580
2600 4400
1100 7200 4000
970 12,000
800 11,000
780
2900 11,000 72001800
2400 2300
5500 10,000 5100
1400
26,000 4800 11,000 990
19008200
4100 6800 3600
12,000
11,000
7300 5000 2800
1800 7000
Ge 5100 8500 16,000
tR
7100
32,000
ead Percent of Sales
590 y! 1-5% 30,000
5-10%
750 10% or more