NEWS IN THE WORLD OF POWER AND INTEGRATED BUILDING SYSTEMS
Planning Methods Could Help Utilities Bring Distributed Energy to the Grid
Drop in Solar PV Installed Prices Bodes Well for Contractors
> CREDI T DOES NOT necessarily go to
utilities for the expanding role of green
power. Some states, including Arizona
and Oklahoma, have made it less cost-effective for homeowners to install their
own solar panels.
Green power proponents argue
that these kinds of policies are a step
backward. A recent study makes a strong
case for new methods.
Solar provider SolarCity’s white
paper, “Integrated Distribution
Planning,” outlines several strategies
utilities can employ to encourage and
take advantage of the growing resource of
nontraditional power generation.
The paper defines integrated
distribution planning as a “holistic
approach” to meeting the grid’s
distribution needs, and it expands
customer choice and unlocks the
benefits of distributed-energy resources.
In addition to renewable sources,
distributed-energy resources include
energy efficiency, demand-response
programs, advanced inverters, energy
storage and electric vehicles.
The paper first recommends that
utilities streamline the interconnection
process. By simplifying the four critical
inspection and permission to operate—
utilities will make it much easier for
distributed generation to come online and
contribute to the grid.
Second, the paper encourages utilities
to consider the growth in distributed-energy resources in their long-range
forecast of needs, something they currently
don’t do. It recommends that utilities
consider the procurement of distributed-energy resources as a viable alternative
to traditional “steel in the ground”
infrastructure in meeting the grid’s needs.
The paper also suggests that utilities
adopt an approach to procurement that it
refers to as “distribution loading order.”
This approach weights procurement
options by cost-effectiveness, placing
low-cost options, such as distributed
energy, ahead of more costly investments
in conventional infrastructure when
considering procurement options.
Finally, the paper asserts that utilities,
which possess most of the existing grid
data, must commit to making that data
transparent and available to encourage
> BASIC ECONOMICS SUGGESTS THAT,
when prices go down, more people make
purchases. As such, recent declines in
the installed costs associated with
residential and nonresidential solar
photovoltaics (PVs) bode well for
Each year, Lawrence Berkeley
National Laboratory publishes
its “Tracking the Sun” report,
which identifies trends in solar PV.
In past years, such reports included
residential, nonresidential and utility-scale PV trends. This
year, however, utility-scale PV trends have been spun off into a
separate report, “Tracking the Sun VIII—The Installed Price of
Residential and Non-Residential Photovoltaic Systems in the
According to the report, the trend is that “installed prices”
continue a rapid decline. The national median installed price for
residential systems in 2014 declined year-over-year by 40 cents
per watt, a 9 percent decline.
The national median installed price for nonresidential
systems under 500 kilowatts (k W) declined year-over-year by
40 cents per watt, a 10 percent decline. The national median
installed price for nonresidential systems over 500 k W declined
year-over-year by 70 cents per watt, a 21 percent decline.
The report adds, “Preliminary data for the first half of 2015
indicate that installed price declines have persisted into 2015
and are on pace to match those witnessed in recent years.”
One reason for price declines has been the fall in “soft costs.”
While installed price reductions from 2008 to 2012 resulted
from steep drops in global PV module prices, they have flattened
since then, and continued declines are the result of other factors.
However, installed prices vary widely. The report found that,
while the 20 percent lowest cost systems were priced at below
$3.50 per watt, the 20 percent highest cost systems were priced
at above $5.30 per watt.
The report explains: “The potential underlying causes for
this variability are numerous, including differences in project
characteristics, installer characteristics, and local market or
Another reason for price variations relates to economies of
scale. For residential systems, median prices for systems in the
8- to 10-k W range were roughly 15 percent lower than for smaller
2- to 4-k W systems. For nonresidential systems, median prices
for systems 1,000 k W or larger were 36 percent lower than for
systems under 10 k W.