There Goes the Sun

Will a new study cause the sun to set on Austin's solar program?

Shell Solar Industries and DDE/NREL
Shell Solar Industries and DDE/NREL

The city's solar ambitions have long been predicated on an Austin Energy-commissioned "Value of Solar Study," designed to determine what decentralized, solar energy is worth to Austin. But ever since the study was released publicly in May, it has been criticized by members of Austin's environmental community, who believe the 119-page document undervalues solar energy.

"The study's number one flaw is that it doesn't appropriately value conserving fuel like natural gas," said Andrew Donoho, a member of the city's Resource Management Commission, which advises the city on renewable energy issues as well as energy and water conservation. Since natural gas cost was such a major factor in the study's calculations, critics erupted, calling the research's figures specious when the utility refused to make its cost-projection models public. Donoho said that while solar's long-term costs are apparent, the uncertainty of gas' cost and largely imported supply should have added more value to solar. The study's numbers, he said, might as well be based on "voodoo and chicken entrails." Michael Kuhn, president of Imagine Solar Int'l., and one of five consultants who worked on the study, said, "Given the inability of the industry to forecast natural gas prices in the past and the required major industry transformation to liquefied natural gas terminals," which are causing controversy in coastal communities nationwide, natural gas' value "could be much higher than what was used in the study."

Critics also complain that solar gets no credit for its air quality, climate change, and energy security benefits. And they fear that because sun-made power is undervalued in the study, Austin Energy will be unwilling to install significant amounts of solar-generating capacity anytime soon and will miss the opportunity to lay the groundwork for a local solar industry.

AE was dragging its solar heels long before the study was released, say local renewable energy advocates, who balked last year at the utility's slow progress toward its own goal of 15 megawatts of solar energy by 2007 (100 by 2020) – given that not even one whole MW was online last year. (Now we have 1.15MW online.) The response from AE's Deputy General Manager Roger Duncan was that everything depended on the study's results.

Duncan, a respected, veteran environmentalist, has publicly stated his preference to hold off on major solar investment until new, "second-generation" solar technology hits the market. He says so-called "thin-film" photovoltaics, which are expected to be integrated into roof tiles, windows, and siding, will be "substantially cheaper than what we're putting on roofs now." John Langdon, marketing VP for local startup HelioVolt Corporation, said current PV production is like carving tablets in stone while his firm's rapid thin film manufacturing method is more like a printing press, reducing costs with faster, more efficient production. He expects the technology to be commercially available by 2008. Today, Duncan puts the cost of conventional solar at $6 per watt – a cost of $84 million to meet AE's 2007 goal immediately, a figure he can't justify. As for gas prices, Duncan said that beyond trusted New York Mercantile Exchange five-year gas futures, prices are anyone's guess, though he did add that "our natural gas supply is one of my principal concerns for the future of the utility." But he also said the utility plans to move forward, rather than argue over the study's contents, by putting out a request for proposals to meet the utility's solar goal. "I'm optimistic we'll receive bids within the [price] range of the study," Duncan said.

Jane Pulaski, spokeswoman for Solar Austin, a nonprofit whose members include the heads of virtually all of Austin's enviro groups, is markedly less optimistic. She said AE "was narrow in its hunt for answers" and was "looking for every reason not to come up with a favorable value for solar. … Until we change our attitudes about how we consume energy, [solar] will always be too expensive." Donoho, a Solar Austin member, said solar's high capital investment is too often stressed, while fossil fuel generation's high, long-term operating expenses are overlooked, and that climate change-related carbon taxes are an inevitable future cost. He noted that under questioning, the study's main author agreed that by changing environmental, safety, and gas cost assumptions, solar's value could double from the study's 11 cents per kilowatt hour to 21 cents.

And while the study highlighted solar's unrealized capabilities in disaster recovery situations (even stating that such applications could increase its value by up to 50%), and in cooperation with the AE-initiated plug-in hybrid vehicle campaign – using the experimental vehicles' beefed-up batteries to store solar energy – those factors didn't actually impact solar's value. A second, smaller study, conducted to analyze the "Economic Development Benefits of Solar Manufacturing & Installation" in Austin was also commissioned by AE and released in May. It detailed how installing solar locally would create jobs and encourage local manufacturing. Under questioning at the Resource Management Commission, this study's author told commissioners that economic factors could boost solar's value up to 41 cents per kWh, double its current market price.

In May, the RMC passed a resolution asking that future city energy acquisitions (including power from coal, natural gas, and nukes) be subjected to the "Value of Solar Study's" rigors. Said Donoho, "let's get all the economic justifications on the table to help the citizens of Austin make good economic decisions." And they passed another resolution last Tuesday advising City Council to monetarily weigh the environmental and energy security values the study left out, while considering all types of solar – including concentrating solar plants (which use reflective troughs in the desert to heat gas or liquids that propel turbines) – when AE brings its requests for solar purchase proposals to the dais. And Donoho joined a handful of others in recommending that the city immediately establish a plan to reach the 100 MWs needed for AE's 2020 goal, including yearly solar budget items of about $17 million.

Excluding more nuclear energy and considering the state's less-than-urgent development of its wind-power infrastructure (not to mention an increasing difficulty in reconciling coal's toxic and heat-trapping emissions with its cheapness), natural gas-generated energy is the cleanest energy option AE has on tap, next to solar. But while the sun will remain, radiating unlimited power, reasonably priced supplies of the natural gas we depend on to meet our electricity and heating needs may not keep shining, given rising demand and the geopolitical mayhem of late. As Imagine Solar's Kuhn put it, "Does the city of Austin have the foresight to prepare for the future?"


The "Value of Solar" study can be downloaded here (pdf): www.austinenergy.com/About%20Us/
Newsroom/Reports/PV-ValueReport.pdf
.

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