Renewable Energy Markets Face a Bevy of Surmountable Challenges
Creative Commons: user Lucas Braun
As I write this, the first day of the World Renewable Energy Forum is coming to a close and my mind is swimming with a plethora of information on the status of renewable energy (RE). One thing has been already made clear – clean techies around the world still have much work to do to ensure RE markets continue to thrive. If we would like to see more renewables adopted on a utility-scale or on the distributed generation level, then we as renewable energy (RE) professionals need to focus on changing perceptions and making RE financially feasible through policy and the free market. Highlights from some of the Ignite presentations are as follows:
- Dr. Ken Swift, An End User Perspective on the Cost of Solar PV Installed by Commercial Organizations: Mr. Swift studied whether it made economic sense to do solar PV in commercial settings in four cities across the U.S. Some of the factors impacting return on investment (ROI) for commercial PV include levels of solar radiation, electricity costs, and state or utility RE incentives. Bottom line on cost effectiveness? Location, location, location.
- Dr. Varun Rai, Decision-Making and Behavior Change in Residential Adopters of PV: Dr. Rai completed a survey of 365 PV owners in Texas to find out the reasons why they chose to adopt PV. Environmental impact and financial attractiveness are the biggest reasons for adopting PV. However, Dr. Rai found that solar adopters had “information overload” with respect to residential PV. This information overload was mitigated when prospective PV buyers spoke with other PV owners. In addition, people are more likely to adopt PV when there is at least one PV owner in their own neighborhood that they can talk to. Also, one interesting aspect of the study was that solar PV adopters are more sensitive to energy conservation. Bottom line? Get existing PV owners to talk to their neighbors.
- Kristen Brown, Incorporating Climate and Air Quality Externalities in the U.S. Electric System: Ms. Brown studied what would happen if there were fees placed on “externalities” like the damages that electricity generation provides through greenhouse gas (GHG) pollutants. Ms. Brown’s study found that fees would cause changes in the electricity mix by decreasing the amount of fossil fuels and increasing solar and wind generation. When we begin to consider the damages that electricity causes it begins to affect our electricity decisions. Bottom line? If we put a cost on electricity damages, it makes clean technologies more attractive.
- Sean Ong, PV Grid Parity in the U.S.: Mr. Ong mentioned that surveys have shown that 90% of Americans want solar PV, but the prices are too high at this moment. Once PV prices come down and are competitive with traditional utility fuels, also known as “grid-parity“, people will begin to adopt it. Grid-parity is affected by many things such as location in the U.S. and time of use. PV is more attractive to consumers in the Southwest and the Northeast U.S. because those locations are closer to grid-parity. Bottom line? Once grid-parity happens there will be a solar gold rush.
These challenges to the RE markets are surely not insurmountable. Armed with data from these presenters we can increase renewable adoption rates in the near future.