Rep. Claire Levy, D-Boulder, agreed to make a couple of concessions to the local solar industry to gain its support for one of her bills, HB 1342. But she turned down others, saying the solar companies seemed more concerned about protecting their market share than expanding the use of solar energy in the state.
Solar industry representatives counter that they were simply trying to clear up areas of confusion and save jobs, and they are quick to thank Levy for compromising.
HB 1342, which was amended and passed by the House on second reading March 23, is intended to expand the use of solar energy in Colorado by extending rebates and renewable energy credits beyond just solar panels located on a single customer’s property. The bill would direct the Public Utilities Commission (PUC) to broaden the ways in which electricity is generated from renewable sources. (HB 1001, signed by Gov. Bill Ritter on March 22, increases the minimum amount of Colorado electricity that must be produced from renewable energy sources from 20 percent to 30 percent by 2020.)
Levy’s bill would require the PUC to adopt new rules extending existing rebates and renewable energy credits to “community solar gardens” — solar facilities owned by 10 or more customers, at a shared location.
Currently, the rules provide for those rebates and renewable energy credits for solar facilities at the customer’s site, leaving out many renters, residents whose homes have physical characteristics that preclude the use of solar panels, people whose houses are heavily shaded and low-income residents.
Levy’s bill would let such residents band together to set up an array of solar panels on the rented roof of an apartment complex, for instance, or at another location within the city or county.
“The purpose of solar gardens is to give more people the benefits of solar,” she tells Boulder Weekly.
The bill would allow solar gardens to generate up to 2 megawatts, or 2,000 kilowatts, of electricity. (Photovoltaic panels generate only about 5 kilowatts on average for the typical single-family home.) The legislation would also require utilities like Xcel Energy to reach out to lowincome customers as part of any plan for a solar garden.
But local solar companies, represented by the Colorado Solar Energy Industries Association (CoSEIA), questioned some of the details of the proposal. According to Levy, those concerns arose primarily from a perceived threat to the revenue stream provided by traditional residential solar projects.
For instance, she says, the bill originally defined solar gardens as “community-based projects.” By state law, each kilowatt-hour of renewable energy generated at a “community-based project” is counted as 1.5 kilowatthours. So that would have given Colorado utilities like Xcel 50 percent more toward their renewable energy quota than what they get for traditional solar projects. Some say that was seen by the solar industry as a threat, because it could give Xcel an incentive to favor solar gardens to get that additional credit to meet its quota.
But CoSEIA Executive Director Neal Lurie counters that defining solar gardens as community-based projects would have led to a net reduction in the amount of solar energy produced, because 6 megawatts would have counted as 9 megawatts on Xcel’s quota sheet, which is not accurate and would have allowed the utility to meet its minimum percentage of renewable energy without providing the full amount required otherwise. He also called it “preferential treatment” for solar gardens that could have led to job losses in the industry.
Levy agreed to remove that language from the bill, so the current version no longer defines solar gardens as community-based projects.
“I think we’ve made tremendous progress, and CoSEIA has removed its opposition to this bill,” Lurie says of the changes Levy made to the legislation. “The intent is to ultimately grow the amount of solar installed in Colorado, but we looked at the details in the bill, and we had a significant number of areas in question and areas of uncertainty.”
Levy, however, stopped short of granting another of the solar industry’s requests, related to how rebates for solar gardens would be paid by Xcel.
HB 1001, the clean-energy bill signed by Ritter this week, sets categories under which utilities must meet their quotas. There is “wholesale distributed generation” and “retail distributed generation.” The latter can be residential or nonresidential and refers to renewable energy generated at a customer’s site and primarily for the customer’s use.
Levy told Boulder Weekly that CoSEIA initially wanted solar gardens classified as “wholesale,” so that they wouldn’t compete for Xcel rebate money with traditional solar projects in the “retail” category.
Levy categorizes solar gardens as “retail” in her bill, leaving the question of “residential” or “nonresidential” up to the PUC.
“I could not agree to that,” she says of the request to make solar gardens wholesale. “It’s not consistent with what wholesale power is.”
The wholesale category is for largescale projects that give Xcel economy of scale by allowing it to fund higherefficiency projects at a lower per-watt cost, and applying solar gardens to that category would be “wasting wholesale [subsidies by] subsidizing what is essentially retail,” Levy says.
She adds that solar industry representatives seemed to be more concerned with their bottom line and less concerned about a net increase in the amount of solar energy being generated in the state.
“I thought that was bad policy and not an environmentally friendly approach,” Levy says. “It is a position motivated solely to protect their business model, not with any interest in the long-term environmental interests of solar gardens.”
But CoSEIA’s Lurie disagrees, respectfully. He says the suggestion to make solar gardens wholesale was part of earlier discussions on the bill, and that stakeholders agreed it wouldn’t be an appropriate categorization because wholesale is for massive projects that produce 10 or 20 megawatts — much more than could be produced by any solar gardens.
“We need to make sure solar gardens are classified consistent with the size of the systems that will be added,” Lurie says.
Still, he says CoSEIA is now hoping that the PUC will categorize solar gardens as nonresidential retail, not residential retail, which is the territory of traditional rooftop solar projects and a separate rebate budget line for Xcel.
“I don’t think anyone wants to replace 400 rooftop solar projects with one large solar garden,” he says, adding that it’s not about protecting market share, it’s about avoiding replacing one type of solar with another. “The intent is to increase the aggregate amount of solar.”
Levy made another concession to CoSEIA. Some in the solar industry felt threatened by the prospect of a large solar garden generating as much as 2 megawatts, which Lurie says very few Colorado solar companies could handle. Most companies that do such big projects are out-of-state, especially in California, he says.
“And those aren’t going to fit on a roof,” Lurie quips. Jacob Jenkins of Boulder’s Standard Renewable Energy agrees. “Those are enormous solar-factory farms,” he says. “Those would not fit on the roof of Boulder High. None of the local retailers could handle the installation of a 2-megawatt farm.”
So in an effort to keep the initial emphasis on small-scale solar gardens, the original bill called for a two-year introductory period in which utilities would be required to purchase a minimum amount of their solar-garden energy from gardens producing 500 kilowatts or less.
Levy has since agreed to extend that period to three years. “We thank and congratulate Rep. Levy for her support of the solar industry and for her willingness to address our concerns,” Lurie says, calling the extension to three years “more time for the market to adjust.”
Lurie also thanked Levy for strengthening language in the bill that caps solar gardens at no more than 20 percent of the “retail” category during those first three years. Originally, the bill stated that utilities “shall not be obligated to purchase the output from more than six megawatts of newly installed community solar garden generation.”
Six megawatts equals about 20 percent of that retail distributed generation, according to Xcel spokesperson Tom Henley.
Henley says Xcel had no problem with Levy’s changes to the legislation.
“We are in favor of those amendments,” he told Boulder Weekly. “We are fine with them. It was done to ensure widespread support for the bill.”
Officials at local solar companies say they are all in favor of solar gardens.
But they share some of the concerns about the original version of the bill, and say that Levy could have involved the industry earlier.
“We were left out of the bill-writing process,” Jenkins told Boulder Weekly.
“We were brought in late in the process, and so we were put on the defensive.”
Jenkins agrees that a major issue was whether the bill would displace Xcel rebates for traditional rooftop solar with funding for solar gardens.
“We wanted to make sure it didn’t cut too much into the pie,” he says. “We like solar gardens, we just want to see an even playing field. … The residentialretail is the area that all of these local companies operate in, so to have a chunk of that money suddenly pulled out for solar gardens would be problematic, as we see it.”
Geoff Manchester, general manager of Boulder’s Lighthouse Solar, says the rebate is a major driver of the recent boom in the solar industry, because it can cover about half the cost of installation. Projects of more than 10 kilowatts generate an additional monthly rebate, he says.
Manchester told Boulder Weekly that local solar companies are just trying to stay competitive, at least until the energy industry reaches “grid parity” — when the ever-decreasing cost of solar and the ever-increasing cost of electricity meet in the middle and cost the same.
“We want these incentives to stay around until, in a perfect world, we don’t need them,” Jenkins says of the pending grid parity, which some say could happen as early as 2012. “We’re getting closer to the point where those two lines intersect on the graph.”
Manchester says that one has to be flexible in the solar business. “You’ve just got to follow the ball in this industry,” he says. “If they change the game, you’ve got to be versatile.”