My dogs came in immediately when I called them tonight. The cookies I’ve recently begun serving up upon their return seem be making an impression. At last they see a reason to leave behind all the fun things to chase in the woods.

Yes, I’ve been slow to understand – or at least enact – the basic principle of reward as incentive. The same problem exists in the utility industry when it comes to energy efficiency. For years investor-owned utilities have resisted energy efficiency, seeing themselves as dragged into it for no good reason, at least no good reason from the perspective of an entity charged with earning a return for shareholders.

Utilities earn profit based on energy sales. Efficiency reduces sales. Why come when called?
Policymakers, however, in many states are recognizing this inherent disincentive to utility investment in energy efficiency. They are beginning to institute “decoupling” programs, which delink revenue from sales. Regulators in these states set up mechanisms to ensure the utilities earn fair revenue despite decreased energy sales.

But this is not enough to really get the dogs to come running home, according to a recent report issued by the American Council for an Energy Efficiency Economy, called “Carrots for utilities: Providing financial returns for utility investments in energy efficiency.”

Decoupling only takes away the disincentive to energy efficiency; it does not create incentives, according to the report.
“This arguably leaves an IOU agnostic or neutral to energy efficiency as a resource option; while it will no longer lose revenues from improved customer energy efficiency, it also will not earn a positive return,” the report says.

When utilities build power plants or transmission, they receive a return on their investment. This encourages them to build more power plants and transmission. Efficiency needs the same type of reward, according to ACEEE.

To that end, the organization recently looked at experiments in 18 states where utilities can earn financial rewards for shareholders by saving energy. While ACEEE says more research is necessary, the initial findings indicate a strong willingness by utilities to invest in efficiency, if they can earn a return on that investment.

In interviews with utilities, the organization found that the “ability to assign a dollar value to efficiency investments significantly contributed to ‘buy in’ by corporate management” and “levelled the playing field between efficiency investments and investment in new energy supply capacity.”

Even more striking, ACEEE found the pace of utility investment in energy efficiency grew twice as fast in states with shareholder incentives than those that used other types of policies to encourage efficiency. As of 2009, utilities with shareholder incentives spent $14.63/person on efficiency, while utilities with other incentive policies spent $8.48.

That’s not to say shareholder incentives are not without their problems; nor are they the Holy Grail of energy efficiency (or the only kind of cookie). But they appear to work, based on the ACEEE findings, which are detailed here.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

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When will the maturation process take hold for the global Home Energy Management market? The answer to this question and more will be answered in an upcoming report published by Pike Research, “Home Energy Management.” Some initial thoughts are as follows:

First, the major categories of EIDs [energy information displays] are:

Of course, many vendors will provide a melding of the three major categories. For example, a vendor providing an in-home display will also enable the end-user to check energy consumption remotely (either through an internet-enabled user interface), or a mobile phone app, or both. What is very interesting, and what the upcoming report will research extensively, is what path to market will be exercised by vendors.

One prevailing theory is that the HEM [home energy management] market will be driven primarily by the actions of utilities. Here, the utility will subsidize, or even provide at no-cost, an EID to the end-user. This idea pivots on residential DR [demand response] and other enabling DSM [demand side management] applications that will assist the utility in reducing peak demand, adhering to potential energy efficiency mandates, and to provide energy information to an increasingly sophisticated energy consumer in a competitive energy market.

Another path to market for EID vendors is through commercial retail outlets (e.g. Best Buy and Amazon). Here, the end-user is responsible for purchasing an EID on their own. This consumer-led adoption will present numerous hurdles to the industry, yet if the devices are priced right, many believe an increased sense of energy efficiency and management in the residential sector will be a strong driver. Additionally, with entrants like Google and Microsoft spurring the market along, customer motivations will be increased by massive marketing campaigns from the vendors who can afford it. These campaigns will highlight the use cases for EIDs in the home, including increased energy usage awareness, DR opportunities, and budgeting applications.

The upcoming HEM report will quantify the different business models of HEM vendors and dive into the HEM application within the home area network (HAN) structure and technology framework.

Jevan Fox is a research analyst contributing to Pike Research’s smart energy practice.

Article appearing courtesy Matter Network.

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Microgrids may be a hot topic among those forecasting key future trends shaping the world’s energy infrastructure, but few significant state-of-the-art commercial microgrids are actually up and running in North America, the world’s leading market for microgrids. One leading domestic developer claims that not a single microgrid is providing energy services today in the U.S., but that firm uses a very narrow definition of what a microgrid is, excluding remote, off-grid microgrids within its qualifications, for example.

At present, regulations governing energy have not kept pace with emerging microgrid islanding technology, frustrating immediate progress. Most of the public and private investment dollars pouring into modernization of the globe’s electric grid have been soaked up by utility smart grid deployments, with very little funding filtering down to the microgrid level of design and deployment.

Academics from the University of Wisconsin-Madison – an institution often credited with the birthing of the microgrid concept (at least in engineering terms) – predict it could take 30 years for the microgrid to become ubiquitous. Yet current trends appear to make microgrids an inevitable augmentation of today’s centralized grid infrastructure. Aggregation platforms similar to microgrids will be absolutely necessary if our energy infrastructure follows in the footsteps of telecomm and the evolution of today’s Internet. No doubt the existing radial transmission grid will still provide the majority of power supplies to the industrialized world. But renewable distributed energy generation (RDEG) will also play a larger role in providing energy supply, reliability, security and emergency care services.

Given consumer pushback on smart meters — the very underpinning of the utility-dominated “smart grid” — in California, Texas, Colorado and elsewhere, the microgrid represents an alternative business model for boosting the quality of grid services. It is becoming self-evident that the hype behind the Obama Administration’s stimulus spending on smart grid upgrades raised expectations to unrealistic heights. Furthermore, utilities focused too much on the benefits meter data might bring to their own operations – and forgot to connect the dots with consumers, many of which only saw higher bills, and no coordinated programs and tools to respond to real-time price signals with more efficient consumption patterns and protocols. And then there were the concerns about data security.

The goals of both the smart grid and the microgrid are the same: to maximize generation assets through embedded intelligence while dramatically boosting efficiencies, thereby minimizing costs. However, they appear to offer two potentially different paths forward.

Both “supergrid” and “microgrid” will need to get smarter, though it is the distribution system that is currently the prime source of outages and unreliability. Today’s distribution grid network is clearly inadequate to support the type of innovation now occurring with distributed resources, including devices such as plug-in hybrid electric vehicles (PHEV) serving as distributed storage batteries. The question is: Do we need bottom-up or top-down innovation?

Microgrids installed in developing nations or rural regions of the United States may be quite simple, even “dumb” if compared to the hyperbole often attached to descriptions of the smart grid. The Consortium for Electric Reliability Solutions’ (CERTS) demonstration projects show that microgrids do not necessarily need to rely on all of the sensors and fast, real-time communication protocols that are hallmarks of the smart grid.

Among the current microgrid control options are centralized management systems requiring high-bandwidth links between the inverters and central controller. Other prototype microgrids rely upon distributed on-board control that reduces the bandwidth needed — but at the cost of synchronization difficulties. More recent work has investigated a hybrid control scheme where proximate inverters operate in a master-slave arrangement. Still others are focused on remote or smaller microgrids are sticking with common frequency droop method, commercialized through the CERTS work, which greatly reduces the need for any high-bandwidth communications over large distances.

Control systems fall into two major camps. The purists – epitomized by the CERTS software – believe that microgrids should operate without any central command and control system, with generators and loads harmonizing autonomously based on local information. This is the view espoused by leading academics and localization advocates and the rationale is compelling. This system will work for the majority of smaller microgrids with a single owner and whose top priority is reliability and sustainability during emergencies. These are the “dumb” microgrids, if you will.

In the other camp are what you might call the pragmatists. They lean toward systems that can be described as “master/slave,” (whereas the CERTS approach has been described as being “like a commune.”) These operating systems are much more focused on optimization of services outside the microgrid. The benefits of reliability may come second to generating new revenue streams from excess generation (or even demand reductions.)

There are also those systems that can straddle these two views. There are few clear cut direct competitors in the space since no standards exist and microgrids are so modular, diverse and optimize such a broad array of energy-related services. It is these control systems – still literally being defined – where the fiercest competition may reign within the microgrid space. This is the guts of the microgrid, if you will, and the focus of current software innovation.

Peter Asmus is an analyst at Pike Research specializing in renewable energy. Article appearing courtesy Matter Network.

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The consumer face of the Smart Grid looks like you and me.  It is tall and short, conservative and liberal, lazy and driven.  In short, it is everyone, which means that it can be both random and ordered depending on changing conditions, geographic realities, and discordant behavioral patterns.

Capitalizing on Smart Grid opportunities in the residential consumer market means finding order and predictability across a wide range of variables: different ecosystems, temperature variation, number of people living under one roof, behavioral patterns, etc.  Currently, data is measured home-to-home, which means that fine-grained details under the roof are usually unaccounted for.

As a result, the Smart Grid ushers in many unknowns related to consuming electricity.  In doing so, it simultaneously offers the potential for substantial gains in efficiency, distributed generation, and reduced costs as well as the threat of widespread, financial-shock-inducing grid failure.

If the failure part of the equation – i.e. blackouts — weren’t so dangerous, it would be easy to test technologies and systems aggressively in order to build a new infrastructure, well…intelligently.

In addition to losing money, the risk of grid failure is a big reason why utilities are scared of the residential market.  As a result, bringing lab-tested technologies to the consumer market has many utilities putting on the brakes.  It is exactly this uncertainty and variability that raises the stakes for utilities, who must proceed cautiously when implementing consumer-facing smart grid programs to maintain grid reliability while also keeping costs low for their customers.

At ConnectivityWeek last month in Santa Clara, CA, which is the largest gathering of Smart Grid experts on the West Coast, industry insiders, utilities, and consumer advocacy groups came together to discuss the importance of engaging the consumer and best practices for doing so.

One Size Does Not Fit All

Understanding the consumer is the key to making the Smart Grid intelligent as well as manageable.

While some argue that we (the consumer) have too many interests, limited time, and limited capacity to interact with the myriad of technologies that are invented and commercialized, consumer-facing smart grid companies are exploring new frontiers in the area of behavioral psychology, marketing, and technology in spite of these assumptions.

Operating somewhere between the supply and demand endpoints in the residential market, companies like OPOWER seek to make sense of consumer-related behavioral data so consuming energy makes sense for the consumer, but also in a way that works for the utilities.

The reality today is that the average consumer spends six minutes or less per year on their energy bill.  While some might see this as a barrier to bringing control technologies to the consumer energy market, opportunists like Seth Frader-Thompson, CEO at EnergyHub, contend that the key to engaging the consumer is simplicity.  While there will be a steep learning curve for consumers once they’re given adequate information, the goal must be to enable consumers to understand the information before they can be expected to engage with it.

The consumer energy space, ultimately, is about trying different things, seeing what works and what doesn‘t, then tweaking, explains Frader-Thompson.  There is no silver bullet solution as demand response (DR) and behavioral trials producing variable results across different markets have shown.

Engaging the Energy Consumer

Although engaging you and me in the Smart Grid is of paramount interest for technologists, currently, residential consumers are trapped behind a wall of utility infrastructure and one-way control solutions (e.g. programmable thermostats and cycling pool pumps).  They lack the sophisticated tools or the infrastructural and informational capacity to align their consumption patterns with emerging time-of-use (TOU) and peak pricing (CPP) utility billing structures.

But all this may be changing.  Kirk Oatman, Founder and CEO of I’m In Control, a home energy management startup, explains that the national standards process is now effectively supporting in-home decision-making as well as the old-style direct load control.  That means more opportunity for real-time “ecosystem” control in the home for residential consumers, which Oatman demonstrated to me via a mobile phone interface connected remotely to his home.

The consensus at the ConnectivityWeek is that service providers should engage consumers proactively rather than wait for opt-ins, the utility strategy so far.

Mark Ishac of Zpryme, a business research and consulting firm, noted that there is no Smart Grid brand that has penetrated the home.  In an informal survey, Zpryme found that 8 out of 10 consumers didn’t know what the Smart Grid even is; meanwhile, 9 out of 10 consumers would take measures to save money and the environment.

The branding void is aching to be filled.  Sean Harrington of OPOWER explains that bridging this discrepancy requires utilities going beyond a “green” pitch and showing consumers how they’ll save money through education.

But a proactive approach must be mindful of the fact that power is constant (always on) and real-time information is more than consumers want to deal with.  Constant prodding can lead to resistance from consumers.  Accordingly, the goal should be to capture a fraction of mindshare.

Consumer backlash

Key to engaging consumers is educating them about how they will benefit.  Frader-Thompson explains that utilities have a long history of looking at their customers as “rate payers,” or even “load.”

Consumers are ultimately concerned with costs, and when Smart Grid build-out leads to increases in their monthly bill, expect the consumers to fight back.  The takeway: utilities need to establish better relationships with their clients and it comes down to effective communication initiated by utilities.

PG&E learned this the hard way after implementing a smart meter program, which led to bill increases for Bakersfield, CA residents.  All consumers saw were higher utility bills with ineffective communication that failed to explain the smart meter program behind it (complaints ultimately led to lawsuits against the utility).

Laurence Daniels, a lawyer with the Office of the People’s Counsel in Washington, DC, emphasizes three key elements of successful engagement with the residential energy consumer:

1. Consumers most important component

2. Education/empowerment most important investment

3. Smart grid is utility company’s 2nd chance to make a first impression

To maximize the interaction with consumers, messaging to consumers must answer the following questions, Daniels explains:

* Why do we need it?

* What is it?

* What benefits are in it for me?

* How to use it?

* How will this be paid for?

Accordingly, home area networks (HAN) must be used as empowerment tools.  To do so, they need to be easy to use with default functionality.  Pricing and billing, and the corresponding information, should take the same approach.  Consumers also need to know that their data is safe and utilities need to provide privacy and security.

Tragedy of the Grid Commons

Craig Boice of Boice Dunham Group argued that the grid’s current paradigm of low cost entry and utility-centric programs will lead to system-wide failure.  He drew an analogy to Garret Hardin’s Tragedy of the Commons framework which goes something like this: herders share a pasture on which their cattle graze; each herder seeks to maximize his profits by adding an additional cow to his herd, “and another; and another,”; until ultimately, all the grass is eaten.  In short, free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation.

The problem with lower electricity prices, Boice argues, is that while more families with limited means have access to power, those with more means will just overgraze on energy.  The only answer to stress on the grid is to lower demand.  Changing consumer behavior is the most effective strategy for accomplishing this.

While Boice acknowledges that both TOU and CPP pricing mechanisms are necessary to lower demand, they remain insufficient.  Ultimately, it must be up to the Smart Grid to change the consumer‘s behavior.

Conclusion

Building out a Smart Grid is a unique challenge that can not be compared to telecommunications in the 90s.  The grid is about transformation of existing infrastructure — if you screw it up, people die.  Telecommunications, by contrast, was about building out a whole new infrastructure on top of old infrastructure.

The challenge of Smart Grid is that a multitude of players are coming into the space, which creates an ecosystem model far different from the point-to-point approach utilities are accustomed to.

This opens up the possibility of collaboration among a multitude of players, but also dependent upon an actively engaged residential consumer market.

Mackinnon is Of Counsel with Cleantech Law Partners where he specializes in smart grid, biomass, and biofuels issues.

Image: limonada

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Imagine a world where you can buy electricity from your choice of vendor (not the utility) at prices that can be negotiated with the vendor. Kind of like shopping at eBay or Amazon. Want to buy a week’s worth (1,000 kWh) of power from SebaSolar at 9 ¢/kWh? Just click here. How about switching to WindyWelly for the weekend (300 kWh) at 8.5 ¢/kWh? Click! Wait, NeoGeo just announced it has a ‘fire sale’ at 7 ¢/kWh for next Tuesday through Thursday. Click!

Well, imagine no more. This electricity world exists today. To see this new architecture of energy at work I went to Wellington, New Zealand.

Powershop is a unit of Meridian Energy, the largest electricity generator and retailer in New Zealand. “The vision of Powershop is to be like eBay for electricity,” says CEO Ari Sargent. “Any electricity generator in New Zealand, including Meridian’s competitors, can offer their own brands of electricity at different prices and different times.”

I think it’s also a bit like the iTunes Store since nothing really gets shipped. Just as iTunes moves electrons Powershop moves electricity.

Many countries require their electric utilities to buy the clean power generated by residential or commercial solar or wind installations. The utilities in turn resell this power back to other consumers. That is probably Electricity 1.5. Powershop goes beyond that. In the Powershop architecture, I could build a small 1-MW solar power plant and offer the “SebaSolar” brand on the Powershop Store. I could sell this electricity directly to consumers at prices that I set—not the utility.

This means that today New Zealand consumers probably have the most choices any electricity user has anywhere in the world.

Powershop has built a plug-and-play technology architecture. While Meridian Energy is the only one currently selling power (under different brands) on this website, anyone should be able to sell power to anyone else. Just as iTunes transformed the world of music, this could be a transformational technology in the power industry.

Powershop’s revenue model is more like an internet company than the energy industry: Take a percent of each transaction. They don’t charge “connection fees” like many utilities (cable and telephone companies included) or transaction fees. Transactions are as simple as can be.

New Zealand, a country the size of California with a population smaller than that of the San Francisco Bay Area, has created a relatively open, competitive power market that offers consumers choice and some of the lowest electricity rates in the developed world.

Welcome to Electricity 2.0!

Tony Seba is the author of Solar Trillions: 7 Market and Investment Opportunities in the Emerging Clean-Energy Economy.

photo: Atil Hardarson

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“Whiskey is for drinking; water is for fighting over.” Often attributed to Mark Twain, whoever said that seemed to have quite a bit of foresight, something the mainstream cleantech community is only recently warming up to.

The fights over water use facing utility scale solar thermal projects in the desert Southwest may have a lot to do with opening the eyes of the clean-tech community, but the sector’s challenges and opportunities are much broader than that, as scores of Californians, Middle Easterners, and Australians will attest.  So why, with the problems so immediate and demand remaining strong in the $58 billion annual market for water technologies, has water investment as a percentage of venture investment declined since 2005?

To be fair, said Michael Hanemann at last Friday’s BERC Energy Symposium at UC Berkeley, the private sector has been scratching its head about how to take advantage of business opportunities in water for years, but the opportunities are just not that easy to monetize.  He noted that nearly 90 percent of Americans receive their drinking water from public water systems.

While about half of drinking water utilities in the U.S. are privately owned, these companies provide water to just one tenth of Americans served by public water systems, and only 3 percent of Americans get wastewater services from private utilities (National Association of Water Companies).  There are some giants in the water industry – GE, Siemens and Halliburton are heavily involved, but many may have never even heard of the world’s largest water company, France-based Veolia Environnement.

But despite the lack of hype about the water industry over the last decade, there seems to be an awakening as of late as academics, nonprofits, investors, and entrepreneurs align to take a shot at breaking through the barriers to innovation in the water sector.

For those interested in catching up on the space, the Cleantech Group featured quite an interesting corps of water leaders at its February San Francisco Cleantech Forum, and UC Berkeley’s BERC Energy Symposium had an excellent panel of water experts including Steve Weismann of the California Center for Environmental Law and Policy, Matthew Heberger of the Pacific Institute, Laurie Park of Navigant Consulting, and Noah Goldstein of Lawrence Berkeley National Laboratory, in addition to world-renown professor Hanemann.

Numerous prizes have also recently been announced for water sector startups in an effort to jumpstart investor interest in the sector, and it will be interesting to track the winners’ progress.  The Cleantech Group and The Guardian’s Global Cleantech 100 included 12 water and wastewater companies, and the nonprofit Artemis Project’s annual competition highlights its top 50 water technologies.  Imagine H2O announced French-American vineyard water efficiency startup Fruition Sciences as the winner of its Water Innovators Prize just this past week.

The Water Innovators Prize was particularly focused on water efficiency, an area that has led to a massive decline in industrial water use over the past fifteen years but has had little impact on residential water use.  Let’s all hope that some of these incubators are able to nudge water technologies into the marketplace to make more of a dent in this space and others.  If they succeed, it will be an exciting year for an often-overlooked industry.

Water event tonight:
Imagine H2O is hosting a showcase on water innovations tonight. Learn about exciting new businesses that have risen to the surface. Meet the winning teams and other finalists from Imagine H2O’s recent Water Innovation Prize, the elite water experts who selected them, and Imagine H2O’s ecosystem of water leaders, including John Bohn, Chairman of the California Public Utilities Commission. Learn more…

photo: laszlo-photo

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How do you force a company that earns money by selling power to reduce its sales? This conflict of interests is what the state of California faced in the 1970s and the result was the formation of the California Public Utilities Corporation (CPUC) an agency that oversees the publicly owned utilities in the state and regulates the amount those utilities can charge. A major goal for the CPUC? Disincentivize the utilities from increasing sales.

Energy use across the United States has grown steadily both on a per capita basis and in total for the last 30 years. California is one of the few states that has been able to control its per-capita energy use over the last few decades. In fact, the per capita utility use curve in California has been almost completely flat since the late ‘70s which many find amazing considering the overwhelming increase in technology in our lives. The way California has done so is as startling as it is strange: beauracratic wisdom.

What’s more, a California utility, PG&E was named “The Greenest Public Utility in the United States” in 2009 by Newsweek magazine. How did PG&E win the award and what is California doing that every other state is not?

In the 1970s, the people in charge in California decided to institute an energy efficiency standard and implemented stricter guidelines for appliances. Equally important, the CPUC was put in charge of regulating California’s utilities but unlike most state regulatory agencies that simply determine a maximum rate increase from year to year, the CPUC set limitations on energy sold and actually incentivizes the utilities based on the amount of energy it saves. This incentive structure completely changes the way the utility is run and instead of constantly trying to increase rates and revenue like every other company, California’s public utilities actually seek to curb energy use through community education and a very important tool they call decoupling.

Decoupling?

Decoupling is the term used to describe how the utilities incentivize their user base to use less energy. For residential customers, they use a tiered rate system where everyone is charged a baseline rate for a limited amount of energy. As energy use exceeds the first tier, a higher rate is charged for the second tier. The residential rates in PG&E territory are around $0.11 per kilowatt hour (kW) in the baseline tier but after the customer exhausts her allotment of baseline energy, she begins using energy in tier two which costs closer to $0.13. After tier 2, the cost of energy jumps substantially over $0.26 for tier 3, over $0.38 for tier 4 and over $0.44 for tier 5. The result of this tiered system is that those who have the highest energy bills are typically the people who live in large homes and use energy with abandon.

I recently worked with some clients meeting that exact criteria. They are a married couple in a 3,200 square foot house located in a relatively temperate climate and could not understand why they had an average utility bill of over $700 per month. A walk through their house revealed multiple causes. In addition to over fifty canned lights throughout the house, many of which were routinely left on, the client had a Koi Pond out back that had a fountain with a 500 watt motor running continuously. Additionally, the pool motor ran for 8 hours every night and the couple illuminated their walkway and entire back yard from sunset until sunrise with over 80 lights! Other culprits that pushed this couple into the highest utility bracket included heated toilet seats, numerous flat panel televisions, an outdoor jacuzzi and an indoor sauna. Through some common sense approaches, behavior modification and energy efficiency measures, the client’s bill was reduced by more than half.

Peak demand, peak rate.

PG&E’s commercial clients also learned to amend their behavior based on what is best for the utility company and, in turn, the environment. For instance, when electricity is at its peak demand, in the summertime during the day, the price to customers is highest (peak rate) when electricity is at its lowest demand, at night, its cost to customers is the lowest (off peak). This is because the utility has the ability to create a given amount of energy at any time but once the demand for energy exceeds a certain level, more energy must be generated either by powering up standby stations which equates to high cost power, or the energy is imported from other states or regions at a higher rate. Either way, to meet peak demand, the utility has to purchase higher cost and many times dirtier energy such as that derived from coal and these costs are passed along to the users of the energy. The idea is that by charging higher prices, users will adapt their use so that a more consistent amount of energy will be needed at all times rather than radically varying amounts of energy which makes planning difficult and drives costs upward for everyone.

A major benefit to come from decoupled rates is that those who have the highest bills are those who save the most from energy efficiency measures and solar electric panels or solar hot water heaters. In residential, these are the people who can reduce their utility bills significantly by installing solar and are also typically wealthy to begin with so can afford the high upfront costs of solar. Its no wonder why California leads the US by an enormous margin in solar installations. An additional benefit is that solar provides electricity during peak time which is when the utility needs it most. However, rate decoupling is not the only reason for California’s relatively large installed solar base. The state has also adopted aggressive renewable energy standards whereby 33% of the energy in the state is mandated to come from renewable sources by the year 2020. This is a goal that could never be met unless the utility and the customers have the same incentives; use less energy per person through energy efficiency measures, install a large base of solar, wind and other renewable sources and ensure that new construction is built to very high standards.

Net-zero energy buildings.

California has had some of the highest standards for new construction over the last few decades as the regulations in Title 24 give the codes by which all contractors are supposed to adhere. Similar to contractors elsewhere, cutting corners equals less expenses and thus although the code requires very good buildings, the reality is that many structures are completed at less than optimal levels. This is leading to further regulation and stricter code compliance measures. For the state to meet its very aggressive goals of making every new home built by 2020 and every commercial structure built by 2030 net-zero energy, contractors are going to be held to more scrutiny and higher standards. To reach these goals, the costs of new construction will increase but the operating costs over the life of the structure should decrease substantially. In a state where many commercial and residential structures are owned by those who only care about the cost of building the structure and do not care about long term operating expenses, landlords of future buildings will no longer have the luxury of passing inefficient structures and costs on to their tenants. While many in the real estate industry hate the idea of anything that adds to costs which slows development, those taking a long-term view realize that the cost of construction is borne once but the environmental impact of poor construction lingers on for generations as does the higher operational costs for the tenants. High quality construction equates to happier tenants which leads to higher resale values.

Not every state has the same natural resources as California but California has shown that with the proper incentives, utilities will act in an environmentally responsible manner which benefits current and future customers. So who were those bureaucrats who were so wise back in the 1970s? Who cares? The point is that bureaucratic wisdom is possible and the hope is that other states begin making generational decisions rather than short term decisions meant to secure a win in the next election. Is your state progressive or a laggard? Click here to see recent data from the US Energy Information Administration to see the worst energy hogs across the US.

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Imperial County, tucked away in the southeastern corner of California, has long suffered from perennial unemployment rates exceeding 20 percent.

Yet Imperial County is also home to the “crown jewel” of all geothermal steam resources in the U.S., making it a prime spot to showcase how renewable energy can help spur the new green economy so enthusiastically touted by the Obama Administration.

Late December, the California Public Utilities Commission (CPUC) approved the construction of the $1.9 billion Sunrise PowerLink transmission line, which could send clean electricity from Imperial County to San Diego. However, the Center for Biological Diversity (CBD) petitioned the California Supreme Court last January to review this decision, citing San Diego Gas & Electric’s (SDG&E) refusal to guarantee that the transmission project would be reserved exclusively for renewable energy resources.

Given that SDG&E is lagging far behind in meeting state mandates to boost renewable energy supplies, the utility’s reluctance to commit itself to renewables was puzzling. Critics fear that SDG&E and its parent Sempra might have perverse motives. Among them: importing dirty power from Baja California, where Sempra co-owns a Liquefied National Gas (LNG) terminal.

Are Enviros Part of the Problem?

When talking about the big picture, environmentalists have always been strong advocates for displacing fossil fuels with renewable energy options. But they often emerge as key adversaries when specific projects are proposed near their favorite parks or other preserved habitats. In this case, they contend the Sunrise transmission line would damage precious habitat and endangered species as it traverses the Cleveland National Forest.

Being a long time environmentalist myself, I can appreciate why many environmentalists might reflexively oppose new transmission lines, even if they connect to renewable energy facilities. But I am also concerned about global climate change and the current economic crisis.

CBD has proposed to invest the $1.9 billion in ratepayer funds to install new solar photovoltaic (PV) systems in San Diego itself, obviating the need to build the Sunrise transmission line at all. Since solar PV installations generate more jobs per dollars invested than any other renewable energy source, that might not seem like a bad idea. But solar PV is also the most expensive of all current supply choices, and PV systems only produce power for 5 to 7 hours per day.

It’s All Good – Geothermal and Solar Power

The result of volcanic activity that traps hot liquids below the earth’s surface, geothermal energy’s main advantage over solar PV is that it can provide round-the-clock electricity that can directly displace that from dirty coal or natural gas power plants. Since geothermal costs less than a third of the cost of solar PV, ratepayers would be getting a better deal with development of geothermal resources in Imperial County rather than with rooftop solar PV in San Diego. As many as 20,000 jobs in Imperial County alone hang in the balance.

The key to making a green economy work is diversity: diversity of renewable supply, diversity in the workforce, and diversity of regions tapped to deliver clean energy. A host of studies all project that California would rank No. 1 in the country in the creation of jobs under a federal program to respond to climate change by expanding reliance upon renewable energy.

But lately, bureaucratic complexity, foot-dragging utilities and the NIMBY syndrome have given California a black eye. Not only did we lose our national lead on wind power to Texas in 2006, but Iowa passed us last year.

Microgrids: The Ultimate Solution?

Ultimately, our power delivery system needs to shift to the local level. A key concept is the “microgrid,” mini-islands of power fueled by distributed solar, wind and Combined Heat & Power (CHP) plants. There are some who say that transmission lines should be our least priority, and in many ways, I side with that argument. I recently spoke with a former San Diego Gas & Electric renewables expert who jumped ship to a new firm focused on microgrids. He argues that microgrids, which can pool smaller distributed resources into a bundle that can be “islanded” during times of grid outages, is a hedging strategy to move forward with renewables while waiting and seeing if any of the proposed transmission lines on the drawing boards ever get built.

While I think the microgrid will be the wave of the future – since they allow us to rely on our own solar PV, small wind turbines, fuel cells and CHP units when the larger grid goes down – this model faces its own resistance from utilities. At present, there is no coherent strategy or program to foster this sort of innovation at the distribution level.

Pushing Forward On All Fronts

The challenges facing us on the energy front are so grave, I think we need to push forward with all options, since politics, economics and unforeseen circumstances tend to derail even the best intentions.

If transmission lines similar to the Sunrise PowerLink are not built soon, California will never meet its global climate change goals or deliver on the promise of green jobs. The CBD lawsuit could put Sunrise on hold for years to come. But it also serves as a reminder that the only way to get buy-in from environmentalists for new transmission lines is to guarantee that these ratepayer investments serve the green economy, and not the vested interests of utilities perhaps looking to line their own pockets.

[photo credit: Flickr]

Related posts:

• Transmission Upgrades in LA Take Five Years…
• How Many Jobs are Truly Created in a “Green Economy?”
• War Against Climate Change: There Will Be Some Collateral Damage
• Will U.S. Utilities Develop Microgrid Models for the Developing World?
• US-Canadian HVDC Transmission

First Solar, a maker of thin-film solar cells, has signed an agreement with Southern California Edison to sell the utility 550 megawatts of electricity produced by two massive photovoltaic solar farms in the Mojave Desert.

The plants, expected to go online by 2015 and produce enough electricity to power 170,000 homes, would be built on federal land set aside for such solar projects.

Analysts say that the First Solar deal is a sign that large arrays of solar photovoltaic panels can produce electricity competitively with so-called solar-thermal plants, which generate electricity by using mirrors to focus sunlight on liquid-filled boilers to produce steam. Southern California Edison said that Nevada-based First Solar’s solar farms also will produce electricity at a price competitive with natural gas.

“This is the very largest photovoltaic project we have done, demonstrating that at a utility scale, the time has come for such projects,” said a Southern California Edison executive.

Appearing courtesy of Yale Environment 360.

Related posts:

• Mojave Desert Tortoises Relocated for Ivanpah Solar Project
• Riverside 550 Megawatt Solar Project
• Rise And Shine: Solar Power Gets Bigger In The U.S.
• One Up One Down in Solar?
• CEC Approves First Utility Solar Project in 20 Years

“We will have solar energy as soon as the utility companies solve one technical problem – how to run a sunbeam through a meter” — anonymous

There is a lot of buzz going on these days about the role solar will play in the current clean tech revolution occurring around the world. Many people find solar interesting but don’t know how it works, why it is gaining so much popularity and how they can get involved. Below are some of the resources I have used to make the world of solar easier to understand.

First question to answer: What is solar? For this you should read the wiki description of solar power.

Now that you understand some of the history of solar power, you may want to understand one of the most common ways that solar power is converted into electricity, for this you should read about photovoltaics or PV.

If you are like me and don’t have a science/engineering background, it may be easier to understand what all the wiki information means after the concepts are explained in an instructional video. Luckily PG&E, a giant utility company in California, has made a wonderful video available that explains PV, how to determine whether PV makes sense and a great financial breakdown for the cost of PV. The instructor also touches on thin-film and solar hot water heaters. I like the 1h47m version on PG&E’s website, but check out the video below if you only have 7 minutes.

To learn a bit more about solar hot water systems, the US Dept of Energy site provides a pretty clear explanation.

The knowledge you just received about solar and its associated costs/benefits can now be put to use as you peruse an innovative website, sf solarmap, that uses mapping technology to show the potential costs and savings for every roof in the city of San Francisco.

What are some of the other things happening in solar? A simple to follow talk on solar trends held by NPR provides some good information.

In the NPR talk, they cite solar thermal as having huge future potential. If you want to see a bit about how solar thermal works, check out one of my favorite sites; Ted.com. This is a talk by the founder of idealab on what his company has been working on.

Also, don’t forget to check out the CleanTechies Blog for articles on solar energy written by professionals working in this industry. For example, Levent Bas compares photovoltaics with solar thermal in his article, and Ceylan Oney analyzes differences between solar energy in Germany and California.

To learn more about typical roles in the solar industry and what kind of skills and experiences solar companies expect you to have, I suggest you read the Solar Job Guide by Frank Marquardt. You can get 20% off the original price when you order the book through CleanTechies.

Watching videos and reading about solar is great but how do you get hands on experience with solar? One fantastic way is as a volunteer. There is an exciting non-profit company out of Oakland, California named GRID Alternatives that trains volunteers on how solar works so that they may help install solar on the home of a low income family. GRID Alternatives works only with PV but that may change in the future. Below is a video showing some background on the company and how they do a PV installation. If you are outside the bay area consider getting in touch with your local utility or solar installation company to see how you can get involved.

Obviously the resources I’ve listed are by no means exhaustive so if you have some sites/resources you have found particularly useful in your solar research, please leave a comment so that we may all benefit from your knowledge.

Related posts:

• New PV Mounting System To Prevent Solar Panel Theft
• DC Solar on the Move
• Solarthon 2009 — Want to Learn How to Install Solar?
• Ahura Energy: A Breakthrough in Solar Thermal
• Want to blog for us?