Value of utility scale vs. rooftop solar debated amid price decline
Over the last decade, the price of solar installations has declined significantly, but the electric utilities industry continues to debate the value and cost effectiveness of utility scale versus rooftop solar.
During a panel discussion at the 2017 National Association of Regulatory Utility Commissioners winter committee meeting on Monday, two experts highlighted the different benefits and challenges associated with utility and rooftop solar. The need to accurately determine solar prices, the role of subsidies, net metering regulations and the effects of technological advances all factor in to determining the value of solar.
“I’m pro utility scale over rooftop,” said Brian Potts, an attorney and litigator focusing on environment and natural resources and energy law, as well as a partner at Perkins Coie. “I don’t mean that people shouldn’t be allowed to put on rooftop solar. It’s a question of what is good for society and should we be subsidizing something that is essentially the same technology that costs two to three times as much.”
John Farrell, director of Democratic Energy at the Institute for Local Self-Reliance, identified several benefits specific to distributed solar. Those advantages include peak shaving, resiliency, as well as voltage and frequency support. Solar also creates reduced variability by distributing power where it is developed, Farrell said. Solar has load reduction benefits and also is able to put energy back onto the system.
Potts countered that view, arguing that utility scale solar is cheaper and offers many of the same benefits, while also having fewer operational issues.
“Rooftop solar and distributed generation (DG) has a lot of societal benefit, but there’s not a lot of societal benefit that isn’t also provided by utility scale solar,” Potts said.
DG and utility scale solar are difficult to accurately compare. “Because it doesn’t compete on the same level … that our large-scale solar does, we’ve had to come up with new ways to value it and figure out how to calculate it,” Farrell said. “That levelized cost of energy comparison we’ve been using is insufficient in order to determine what is the appropriate price of the resource.”