MIT Report: Uniform Nationwide RPS Program Needed
An interdisciplinary study led by the Massachusetts Institute of Technology (MIT) Energy Initiative concludes, among other things, that “state renewable portfolio standard (RPS) requirements should be replaced by a uniform nationwide program.”
The report—released on May 5—focuses on the future of solar energy, suggesting that a massive expansion in solar capacity to “multi-terawatt scale” is needed to mitigate climate change risk. Reforming the many mandates and subsidies adopted by state and local governments could “yield greater results for the resources devoted to promoting solar energy,” it says.
Three challenges are highlighted in the report: reducing the cost of installed solar capacity, ensuring the availability of technologies that can support expansion to very large scale at low cost, and easing the integration of solar generation into existing electric systems.
It notes that photovoltaic (PV) capacity has increased from less than 1 GW to more than 18 GW during the past six years. At least part of that growth has been spurred by a 50% to 70% reduction in the cost of PV systems, even without federal subsidies. “A national or regional effort to establish common rules and procedures for permitting, interconnection, and inspection” could reduce installed system costs even more, the report says.
The report notes that the third-party ownership model has been a game-changer for the residential solar market. Currently, third-party ownership is only allowed in about half of the country, but the report suggests “residential solar would expand more rapidly if third-party ownership were allowed in more states.”
Utilities have been challenged by the trend toward rooftop solar, however. Arizona Public Service and Salt River Project (SRP)—the two largest electricity suppliers in Arizona—began levying additional charges on customers with rooftop solar panels because the company’s feel net metering programs do not adequately recoup infrastructure costs from customers with the systems. The MIT study generally agreed that traditional rate structures and net metering programs “result in a subsidy to residential and other distributed solar generators that is paid by other customers on the network.”
But not everyone agrees that net metering programs are a problem. A study conducted for the Nevada Public Utilities Commission last year by San Francisco–based Energy and Environmental Economics (E3) suggests that a carefully designed net metering program can support self-generation without creating a burden on non-participants. SolarCity, the largest installer and financier of rooftop solar in the U.S., filed an antitrust suit in March seeking to overturn the new SRP rate structure.
The MIT study evaluated the economics of utility-scale solar projects, but it finds that natural gas combined cycle plants generally offer a lower levelized cost of electricity than PV projects, even in sunny regions, such as southern California. It finds that concentrating solar power (CSP) generation—using mirrors to concentrate the energy from the sun to drive traditional steam turbines—is even less competitive.
It says utility-scale PV generation is 25% cheaper than CSP in sunny regions, and up to 50% cheaper in cloudy or hazy areas. The reason is that PV uses all incident solar radiation, while CSP only uses direct irradiance, making it more sensitive to the scattering effects of clouds, haze, and dust.
Although wafer-based crystalline silicon technology is mature and large-scale manufacturing facilities are in place, the MIT report suggests that inherent technical limitations support continuing research on new technology. It strongly recommended that “a large fraction of federal resources available for solar research and development focus on environmentally benign, emerging thin-film technologies that are based on Earth-abundant materials.”
—Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)