Forward and backward: Solar power struggles to expand in Montana – Bozeman Daily Chronicle, Nov. 9, 2014

November 10, 2014

Categories: Clean Energy, Legislature, Member news, News

http://www.bozemandailychronicle.com/news/environment/forward-and-backward-solar-power-struggles-to-expand-in-montana/article_f6625a6e-66dc-11e4-85f2-0b5020d2302c.html?utm_medium=desktop&utm_source=block_649307&utm_campaign=blox

By Laura Lundquist

On a cold, clear day last winter, Jeff Wongstrom drove back into the Gallatin Valley after snowshoeing with friends in the Hyalite area.

The late afternoon sun was low in the southwest as Wongstrom looked out across the large homes filling former alfalfa fields along South 19th Avenue.

“Look at all those empty roofs waiting to be filled,” Wongstrom said.

As owner of Thirsty Lake Solar in Bozeman, Wongstrom could probably imagine all those roofs covered in solar panels glinting black in the setting sun.

He might also imagine the sun’s rays morphing into enough electricity to power each house and maybe a little more.

Some claim such a scenario could only be found in more affluent parts of town because only the well-off can afford solar power systems.

But that’s changing. Fast.

Where once solar panels and their wiring systems were fairly expensive, recent advances have improved panel efficiency and reduced the cost.

Since 2008, the cost of solar panels has dropped by two-thirds, and the number of solar systems in Montana has tripled to more than 1,000.

On Oct. 26, a Deutsche Bank report concluded that by 2016, solar energy will be as cheap or cheaper than average electricity bill prices in 47 states, including Montana.

“Ten years ago, a 2- to 3-kilowatt system was standard for homes. Now I’m putting in a lot of 6-kW systems because they’re more affordable,” Wongstrom said. “They can afford to put in bigger systems that are more likely to cover a majority of their electrical usage.”

As more people are able to take advantage of the free energy coming from the sun, they can save money, diminish the demand on aging power plants and transmission systems, and reduce the carbon emissions that are contributing to climate change.

That’s even more important as the Environmental Protection Agency is enacting changes to reduce U.S. dependency on coal, one of the worst sources of carbon emissions.

But those overarching benefits are hindered by corporations or electrical co-ops with older transmission systems that resist adding more renewable power.

“It wasn’t a big issue for us until a few years ago when solar became much more affordable and more easy to obtain,” said NorthWestern Energy spokeswoman Claudia Rapkoch.

Some of the energy companies’ objections are just a defense of their bottom line, while others highlight legitimate challenges of integrating new and old technology.

But some energy companies’ claims fall flat when smaller countries such as Japan, Italy and Germany are incorporating up to three times the solar energy produced in the U.S., according to the International Energy Agency.

The overall effect in Montana is to squelch the efforts of individuals, organizations and businesses to extend the benefits of renewable energy to more people.

In Montana, and in several other states, a main bone of contention is net metering, a kind of electricity accounting system.

Normally, a meter measures the amount of electricity a building pulls from the electric grid each month. The user is billed for that energy, along with fees and taxes based on a percentage of that usage. Part of one of the fees goes into a pool of money used as grants for solar projects.

A structure with an approved renewable energy system will cycle between periods when the system produces excess electricity and when it can’t meet energy demands.

The meter runs forward when the grid provides energy and backward when the solar system can send excess energy back to the grid.

At the end of the month, if the meter ran backward more than forward, the customer’s bill is zeroed out for the month. Plus, he gets a credit for the electricity provided to the grid.

The credit has to be used within the year but is more than the value of the electricity alone – it’s the retail price with the tax and fees added in.

So for example, NorthWestern Energy sells electricity at the retail rate of about 11 cents a kilowatt-hour when all the fees are added in. But the wholesale cost of the electricity alone is between 2 and 3 cents.

So a homeowner can save quite a bit on his electric bill.

Some bigger projects benefit more than just one family.

In Red Lodge, 370 solar panels save the city more than $5,000 each year by powering blowers that bubble air through sewage lagoons to speed treatment.

The Townsend School District installed more than 130 panels to provide 28 kW for the school and to educate students about renewable energy. The net metering program saves the district about $3,200 a year.

And now, in the Emerson Center for Arts and Culture, artists who depend on good light to blend subtle hues on canvases have lights powered by 110 solar panels angled on the roof.

“It’s a small installation relative to the size of the roof,” said donor Tim Crawford. “Part of my thing was to set an example or raise consciousness about the viability of solar. Not just for the individual or public buildings, although it would be nice to see on City Hall or the new Law and Justice Center.”

For larger projects, cost and available space can be limiting factors.

For example, next month, the Livingston Food Pantry will be moving into a new 5,000-square-foot Livingston Food Resource Center, and the Yellowstone Bend Citizens Council is trying to raise enough money for a 10-kW system to be installed next spring.

“It’s not big enough to meet all their energy requirements. But we’re waiting on a grant and there’s a space limitation since we weren’t involved in the design process,” said YBCC member Catherine Logan.

But the biggest factor is a Montana law that caps renewable project capacity at 50 kW.

The 1999 Montana Legislature unanimously passed a bill adopting net metering, but set the limit at 50 kW.

Since then, systems have improved and more than 50 Montana businesses have moved in to sell renewable energy products and services. So now, the 50 kW cap is starting to hold some projects back, said Henry Dykema of Sundance Solar Systems.

“(The Red Lodge project) was not a cheap project. There was plenty of space to go bigger. But it’s 49.25 kW, just under the cap,” Dykema said. “The fact that there was a cap got any further discussion off the table altogether, so it’s hard to know what might have happened.”

Dykema said he has started installing 50kW systems for individual farmers who need to power both homes and outbuildings.

Ben Brouwer, Montana Renewable Energy Association policy director, said only a dozen projects in Montana hit the 50 kW mark because the cap has driven market decisions.

That’s why renewable energy advocates and legislators will make another try at raising the cap during the 2015 Legislature.

They tried once before during the 2013 Legislature.

Sen. Mike Phillips, D-Bozeman, introduced a bill raising the cap to 100 kW.

Several other states have a net-metering cap of 100 kW or more, including Washington, North Dakota, Hawaii and Kansas.

But the bill failed in the Senate by a vote of 24-26, which raised questions for Phillips.

“They weren’t voting against the cap because they found some fundamental flaw in the logic – there was monkey-works behind the scenes,” Phillips said.

A dozen renewable energy advocates and business owners testified in favor, but two lobbyists from NorthWestern Energy and the electrical union staunchly opposed the bill.

NorthWestern Energy and other energy companies say customers with solar setups aren’t paying the extra fees for upkeep of the electric grid, even though they still use it to get electricity when their systems aren’t generating energy.

If too many renewable systems come online, customers with no renewable energy will have to pay more of the cost, companies say.

The companies also claim that a credit at the retail rate of 11 cents a kW-hour is a subsidy and perhaps the credit should only reflect the wholesale energy cost.

Solar energy supporters point out that the energy companies turn around and sell the excess energy to other customers at the retail rate.

Plus, NorthWestern Energy can claim the lost revenue and is reimbursed by the Public Service Commission.

But Wongstrom acknowledged some of NorthWestern Energy’s concerns about what could happen a few decades into the future.

“There’s a legitimate argument that if there’s too much distributed energy generation, they won’t have enough revenue, so why should they encourage that? But if there wasn’t a net metering policy, the whole industry in this state would pretty much go away,” Wongstrom said.

Bill supporters tried to find a Republican to carry the 2013 bill but were unsuccessful.

They found their man this year: Sen. Art Wittich, R-Bozeman, who will move over to the House in January.

Wittich voted against the bill in 2013 but recently said that he would be willing to co-sponsor a similar bill this time around.

“I don’t remember voting on it,” Wittich said. “But these rooftop solar projects are making more sense technologically and economically, and the idea of having some arbitrary cutoff has been overtaken by these technological and economic changes. So it makes sense to update the law.”

NorthWestern Energy doesn’t agree.

Rapkoch said lobbyists will again testify against the bill but not because NorthWestern Energy opposes raising the cap per se.

“It’s not the cap and it’s not net metering that’s the problem; it’s the way it’s structured. And until such time that we can develop a better policy that takes into account the value of the grid and makes something that is more sustainable, we’re not going to support the cap. We’re not going to support anything until the policy is adjusted,” Rapkoch said.

Wittich knows NorthWestern has a powerful lobby but said he’s not swayed by powerful lobbies or special interests when trying to pursue good policy.

“Their interests aren’t as important to me as ratepayers’ interests and what this bill would do would provide ratepayers with some equal footing vis a vis the company,” Wittich said.

It may be a few more decades before Bozeman’s rooftops are covered with solar panels, but solar systems are only going to get cheaper with more technological advances.

Just this week, a team of Stanford engineers found a cheaper method for water electrolysis, a process that could be used to store excess solar energy. If the energy-storage problem can be cracked, solar users could leave the grid altogether.

That could leave energy companies in an equally bad position if they can’t adapt.

“I don’t profess to know what NorthWestern Energy’s business model is,” Phillips said. “But if I was on their board of directors and they continued to advocate for more wooden poles in the ground, I’d say, ‘Wait a minute. The world is moving in the direction of distributed generation and how can NorthWestern be part of it?’”

 

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