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The irresistible advance of solar energy — and utilities

By K Kaufmann

Close to 100 energy leaders from across the country gathered in San Diego April 26-27 for the Solar Electric Power Association’s (SEPA’s) 51st State Summit  an event focused on creating new visions of a future energy sector with a robust, affordable and sustainable market in solar and other distributed energy resources.

SEPA launched the 51st State Initiative in October 2014 as a challenge to individuals and groups representing a range of interests in the energy sector to re-imagine the industry from the ground up, as if for a hypothetical 51st state with no existing policies, regulations or market structures. The educational nonprofit based in Washington, D.C. received 12 concept papers describing a range of possible energy futures, and an Innovation Rev iew Panel composed of five energy experts and thought leaders chose three for discussion at the summit.

Full information on the 51st State and the papers submitted to SEPA are available at

Ron Binz, a review panel member and former chairman of the Colorado Public Utilities Commission, gave a brief talk at the summit’s an opening dinner April 26, to provide background and context for the summit. Excerpts from his speech follow:

Ron Binz speaking at the opening dinner of the 51st State Summit April 26 in San Diego.

When I read the description of the 51st State Initiative, it took about 14 seconds for me to know this was really a good idea.

Victor Hugo once said, “One resists the invasion of armies; one does not resist the invasion of ideas.” Sometimes that is translated  One cannot resist an idea whose time has come. We are here tonight because the idea of solar energy is an idea whose time has come and cannot be resisted.

The National Renewable Energy Laboratory has done a study that shows you could get to 80 percent renewables in this country with no breakthroughs in technology and no real acceleration of cost reduction  something we.know is going to happen.

The utility in Hawaii is proposing to go to 67 percent renewable energy by 2030; not some environmental group, this is the Hawaiian Electric Company.

Southern Company is pushing 1 gigawatt of solar in Georgia. Georgia will probably this year have the fifth highest production of solar of any state in the country.

Xcel Energy is adding solar in Colorado not because of a renewable portfolio standard but  becase it’s the economic thing to do.  It turns out if you’re building a gas plant in Colorado, it’s cheaper to build a gas plant plus a wind farm plus a solar field than a gas plant alone. These are remarkable economics, really an endorsement. . . .

What’s going on in solar in the other 50 states? Check out the new upgrade of SEPA’s Utility Solar Database at

Where is the discussion about centralized versus distributed generation going to end up? You have people who think utilities are no longer needed, that everything will be distributed. I’m not one of those. You also have some people who are thinking that this solar rooftop stuff is a passing fad that will go by the by just like it did in the ’70s when we first started trying this thing.

Clearly both of those positions are off base. Where the actual shares end up, I don’t think we know. Our duty is to figure out the grid that will accept any of those kinds of formations eventually.

You hear a lot of talk these days about utility business models and what happens to them. I’ve been doing this stuff for 35 years or so. I’m of the absolute conviction that the secret to utility business models is utility regulation and market models. Utilities will figure it out. You don’t need to tell them how to organize their businesses.

Utilities are going to be here for a very long time. They are huge aggregators of capital; they are owners of huge amounts of assets — and as much as your philosophy might tell you they are going to melt away, they are not going to.

I interviewed a dozen utility CEOs over the past couple of years for a project that was funded by the Energy Foundation, called Utilities 2020. They said things like  “Why would I want to spend money improving the efficiency of the system when my upside is I get my costs back from regulation?”

Another one said, “Why would I save money by employing certain new technologies or systems because they take it away from me in the next rate case?”

For those of you not familiar with regulation, those statements are approximately true. Until and unless we change the system under which utilities are compensated so they are treated more like businesses that have an upside for their investments, which actually push on them the decision about whether to put iron in the ground or spend the money on labor in order to get certain outcomes, until we turn those decisions over to them and incentivize them, we’re not going to see new business models. . . .

The Internet is coming to the power sector. The grid will be enabled by the same sorts of things that changed every other industry that we deal with.  . . . Without saying how it’s going to evolve, our power sector is going to have a similar transformation.

I’m of the view that every device we use today will have a web presence, will be addressable. Your refrigerator will essentially be the balancing market. We’re going to have a web of energy services in which solar is going to be one of the star players.

K Kaufmann is SEPA’s Communications Manager. She can be reached at [email protected].