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Audi, APS and utilities’ role in getting more solar on the grid

If anyone still doubts the inevitability of solar power’s integration into the United States’ power supply, the Aug. 5 announcement of Audi’s plans to partner with SunPower to provide clean energy for the German automaker’s new plug-in hybrid provides strong, evidence, if not all the proof needed.

The SunPower partnership is part of a green package of standard and optional features that will come with Audi’s new A3 Sportback e-tron, a compact, luxury hatchback hybrid scheduled to hit roads in the U.S. in the second half of 2015. (Photo courtesy of Audi.)

Audi Etron

The standard features of the Audi energy package include a 240-volt Bosch home charging station — a Level 2 charger in industry jargon; installation extra — as well as enough carbon offsets to cover each car’s final assembly, shipping and first 50,000 miles. The offsets will come from Audi investments in carbon reduction projects in the U.S. and Africa, set up with 3Degrees, a well-established carbon offset and renewable energy credit (REC) provider in San Francisco.

The SunPower part of the package is an optional rooftop solar system, including a backup energy storage battery the company is rolling out next year, to allow for anytime home charging of the car and off-grid power for emergencies. While pricing is not mentioned, the announcement released by both Audi and SunPower talks about the various financing options the solar company can offer.

Now obviously, both the car and green package are pitched at high-end, eco-conscious customers who can afford the hybrid and rooftop solar price tags. But Audi’s move to take the guilt and carbon emissions out of driving could be the beginning of new auto industry initiatives to further reduce the sector’s carbon emissions — with such standard and optional features becoming more common and affordable over time.

It’s all part of the ongoing disruption and transformation of traditional utility business models and markets that renewable energy, and particularly solar, is pushing forward, steadily but unevenly, not only in the U.S. but around the world.

Utilities often seem caught in a paradoxical position amid the many and, at times, sudden changes. They may be criticized for either resisting solar expansion or favoring large-scale projects over rooftop installations, or when they stand up solar programs of their own, trying to control solar generation or undercut local installers.

Such has been the case with Arizona Public Service (APS), Arizona’s largest investor-owned utility, which recently rolled out a proposal to lease customer rooftops for solar installations, in return for a $30 monthly bill credit to be paid for 20 years.

Some solar advocates immediately decried the plan as unfair competition, while other critics suggested it would not be a real leasing plan that would save customers money. APS has said, the proposal was developed in response to customer demand and to test out the use of solar and advanced inverter technology for improving grid stability and reliability.

For an article reviewing the arguments pro and con, click here.

The APS proposal will undoubtedly get a thorough public vetting before the Arizona Corporation Commission, the state’s public utility regulator, where all voices and views will be heard.

But looking at the Audi and APS initiatives, the reactions they have triggered might seem to indicate different assumptions at work. The integration of the solar and electric vehicle (EV) markets is largely seen as inevitable and smart; whereas the relations between solar and utilities are endemically adversarial.

A recent report on the global solar market from Morgan Stanley sees enormous potential in the EV-solar trend, specifically looking at Tesla’s expanding move into battery storage with its planned Gigafactory, location to be determined. But the lower-cost lithium ion batteries the massive factory could produce, coupled with the possibility of rising fixed utility fees, could create momentum for more solar customers to go off grid, the report predicts, further cutting into utilities’ profits.

The reality, of course. is more complex and hopeful.

Utilities are putting solar on the grid at increasing rates. The Solar Electric Power Association’s most recent quarterly market report showed that in the first quarter of 2014, utility-scale projects of 5 megawatts and up outpaced the residential solar sector for the first time.

But, the progress is uneven, as documented in a recent report from Ceres, a nonprofit focused on sustainable business leadership, rating the 32 largest investor-owned utilities in the U.S. on their renewable energy and energy efficiency performance.

Based on the amount of renewable energy the utilities actually generated, as opposed to capacity, the report found that only five utilities — generally located in states with mandated renewable energy targets — accounted for 54 percent of the group’s renewable power on the grid. With rates of renewable generation ranging from 21.8 percent to zero, the average among the 32 utilities was 5.29 percent.

Raising those figures will involve many technological and regulatory challenges, and SEPA sees an emerging trend of utility-solar industry collaboration as part of the way forward.

In Massachusetts, utilities, solar industry representatives and regulators worked together earlier this year to find a compromise to reform the state’s solar incentives while advancing programs to put 1,600 megawatts on the grid. The full compromise did not pass muster with the state’s legislature, but solar advocates said the watered down version approved is still a small step forward.

Updates on the Massachusetts legislation can be found here and here.

Utilities are also looking for new and innovative service options to respond to their customers growing demand for clean energy, whether rooftop, community solar or other green power initiatives. SEPA’s own advisory services were launched in response to utility requests for help in evaluating and developing solar offerings.

The common thread here is the recognition that utilities have an ongoing and integral role in putting more solar on the grid to provide reliable, cost-effective power to their customers. But to achieve that goal, leveraging utility expertise and resources will be essential.

We are in new and ever-shifting territory and, learning curves being what they are, we should expect that some efforts will be more successful than others — that’s part of the process.