Making Solar Power Mainstream
California has some of the greatest potential in the world to benefit from solar power due to high levels of sunlight. We also have some of the greatest need. By reducing our dependence on fossil fuels and nuclear power, clean renewable energy such as solar power can protect our environment while diversifying our energy resources and helping to lower prices. Solar power can also reduce strain on the electric grid by generating electricity where it is used and hedging against rate spikes by generating electricity when demand is the highest, on hot summer afternoons when air conditioners are running.
The good news is that solar photovoltaic technologies have moved rapidly from serving off-grid niche markets like remote locations, emergency signs and calculators to becoming a mainstream electricity source. This has been accompanied by a boom in grid-connected distributed uses like residential and commercial systems, from 5 percent of the U.S. market for PV in 1994 to 31 percent in 2003, while the overall U.S. market for PV grew from 26 MW to 103 MW.1 The largest potential market – installations on homes – is blossoming worldwide, especially in Japan.
Yet, despite this progress, the cost of a home or commercial solar system in California has not fallen to the level where it makes long-term financial sense for a homeowner or business to install a system without government incentives.
It has often been said that it is not a question of if, but when solar power becomes cost-competitive with traditional electricity sources. With the right programs and policies today, California can have a great deal of control over how rapidly solar power becomes cost-competitive. And, by getting in on the ground floor of this new market, California can also benefit economically.
The experience over the last 10 years shows that if we invest now in creating the demand, the solar industry will meet it and, in doing so, will be able to manufacture and install solar PV systems more cheaply. And as they learn how to build solar PV systems more cheaply, demand will increase, creating a “virtuous cycle” that will give solar power a tremendous boost in becoming a major source of California’s power.
While government incentives can increase California’s installed solar capacity, an even better reason for them is that they can push down the cost of solar in the long run, to the point where incentives are no longer needed. To achieve this goal, new incentive program needs to include both commercial and residential PV markets, be sustained over a long period of time, include cost reduction controls such as mandatory incentive declines each year, and encourage efficient design and installation.
Getting there: Bringing Solar Power to Main Street
To create a mainstream market for solar power, we recommend the following steps:
The Million Solar Roofs Initiative is one of
Implementing California’s Million Solar Roofs Initiative
California has already begun down the path toward creating a mainstream solar energy market. On January 1, 2007, the California Solar Initiative will officially take effect at the Public Utilities Commission. This initiative, along with the Million Solar Roofs bill (SB 1) established in 2006, set up a statewide program to build a million solar roofs within ten years with the goal of making solar power cost-competitive with fossil fuel-generated electricity. To read more about this initiative and the key steps needed to ensure its success, click here.
Building With Solar: The Common Sense ApproachBuilding with solar power makes a lot of sense. To begin with, it saves money. It is a lot cheaper—some estimate 25-33 percent cheaper—to install a solar system before rather than after a building or home has been wired and constructed. In addition, some solar systems actually look and act just like roofing material, saving money there as well. Secondly, building with solar allows the architect to design the building appropriately. By taking such simple steps as orienting the home or building in the right direction and landscaping to shade the home but not the solar system, designers can help maximize the solar system's output.
According to the California Building Industry Association, more than 150,000 homes are built in California each year.2 Over the next 10 years, more than one million new homes will be built throughout the state, with the greatest growth happening in outlying areas that will require new infrastructure such as power plants and transmission lines as well as shopping centers, big-box stores, auto dealerships, etc. With only a few exceptions such as developments in Orange County, Palo Alto, and Sacramento, less than one percent of California's homes and businesses are constructed with solar power.3
View a listing of solar home developments around the state.
Notes
[1] Paul Maycock, “PV Market Update,” Renewable
Energy World, Vol. 7 (4), July-August 2004.
[3] According to industry leaders, up to 1,000 new homes were built with solar PV in 2003, a significant increase to previous years.
