Where’s all that clean solar power promised to sunny Colorado?
The solar industry, which had its annual Colorado meetup this week, says a lot of that clean power is already here, a lot more is on the way, and there’s a lot that state regulators and lawmakers could be doing to bring even more, even faster.
Colorado solar advocates are also anxiously awaiting a decision from the Biden administration on extending or ending 18% tariffs on imported solar panels. There are no solar panel manufacturers to protect in the state, so the official position of Colorado trade groups is to stop the tariffs.
The Colorado Sun held a state-of-solar conversation with David Amster-Olszewski, CEO of SunShare, which bills itself as the first and oldest community solar provider in the country. SunShare has built more than 100 megawatts of community solar “gardens,” with more projects underway. (Under Colorado’s abundant sun, a megawatt of panels produces enough electricity for just under 200 homes.)
(Early Friday, the Biden administration announced it would keep some of the tariffs, but continue to exempt so-called bi-facial panels larger utility arrays use. A larger number of regular solar panels will be allowed in before the tariff kicks in, as well. More comments from SunShare at the end of this piece.)
SunShare takes a lot of shots at the big utility monopolies, and we’ve encouraged Xcel to respond for this or future stories.
Q: Why are there tariffs on imported solar panels? And what’s your argument that they should disappear?
SunShare: I think we should look at who put them in place: the Trump administration. In the United States, we’re getting quoted for solar panels at 46 and 47 cents a watt. An average home in Colorado use about 5,000 watts of solar. Internationally, prices are around 26 to 27 cents. So you’re seeing these tariffs have this massive cost impact far above the 18% that is written on the tariff sheet.
My belief is the purpose of these tariffs was not to stimulate jobs in manufacturing in the states. I think they were targeted to solar specifically to raise the cost of solar energy so that it is less competitive than it could otherwise be with fossil fuels. And I think that was a goal of the Trump administration. I don’t think that should be the goal of the Biden administration in extending these tariffs.
Q: One of the arguments for tariffs, of course, is that it would be great to have a thriving manufacturing base in the U.S., and that China unfairly supports its manufacturing with both coal-fired power plants for the energy, and through what some people call forced labor.
A: I think they’re the wrong assumptions. Number one, these tariffs aren’t targeted to China. They’re targeted at the whole world. We at SunShare have actually been using non-Chinese products for many years. They may be from Korea, Taiwan, Southeast Asia, and Canada.
And when you look at creating manufacturing jobs in the United States, there are very few solar panel manufacturing jobs to begin with. And the tariffs didn’t change that. What you had, though, is a slowdown in tens of thousands of new hires for everything else in the solar supply chain, from finance, to solar installation, to operation and maintenance, to subscription management. So I don’t think it’s a good thing for the government to be favoring solar manufacturing to the disadvantage the tens of thousands of jobs created in the clean energy transition.
Q: Are tariffs holding back growth of solar power in the U.S. right now? And therefore the effort to combat climate change?
A: Yes. Because you’re keeping costs higher than they need to be, that’s slowing down demand. If solar is 30% less expensive, you can imagine that many more utilities and consumers can afford it.
Q: Does the solar industry still need the 26% tax credit right now for installation and will that continue?
A: I think it will continue. The solar industry can survive without tax credits. The question is, how big will it be? We’re trying to transition to 100% renewable energy as fast as possible. The more tax credits and subsidies that you have, the faster it will happen. The government can create manufacturing tax credits as well. That’s a positive way to create solar manufacturing in the United States as opposed to something that slows solar down.
Because while solar may be cost effective in Colorado, and we’ve got a great solar resource in Florida, New Mexico, Arizona — it’s not yet cost effective in Alaska, or Washington, or Maine. So these tax credits, they accelerate it. One other piece about the manufacturing side. The government can create manufacturing tax credits as well. That’s a positive way to create solar manufacturing in the United States as opposed to something that slows down everything else.
Q: SunShare installs community solar gardens. What’s your best explanation to a newbie of what those are, and how they can best help efforts for greenhouse gas reduction?
A: Community solar gardens are large arrays of solar panels. They range in size from smaller than 3 acres, up to about 40 acres. They can be built anywhere on the electric system. Customers can purchase energy from these community solar farms just like they would from the utility. Just like the average consumer doesn’t have a coal-fired power plant or natural gas power plant in their backyard to power their house, but they still get electricity. People who can’t have solar on their rooftops, people living in apartments, people who don’t have $30,000 to install a rooftop system — this gives them that flexibility. Customers pay nothing more than they would otherwise pay for power generated by fossil fuels from Xcel. So it just makes it easier for people to participate in the energy transition.
Q: Is community solar thriving right now or do you face other challenges from regulation or the established power utilities?
A: Community solar is thriving nationally. Just last week, the Department of Energy announced a goal calling for 20 gigawatts of community solar by 2025. That would support 5 million homes with community solar across the country. There’s a four-year renewable energy plan from Xcel that it just filed with the state Public Utilities Commission, and we’re going to be advocating really loudly to get a gigawatt of community solar out by 2025.
We are seeing issues with utilities pushing back on connecting those projects to the grid. These projects are competition for utilities. Every dollar of community solar that we create and sell to consumers is one dollar that is not generated by the utility. So that provides a profit motive for utilities to slow it down. There’s a four-year renewable energy standard plan from Xcel that it just filed with the state Public Utilities Commission, and we’re going to be advocating really loudly to get a gigawatt of community solar out by 2025.
Q: To be fair, SunShare is a for-profit company as well. Why do you need more refereeing from state utility regulators on the relationship with Xcel?
A: We can’t build as many projects as we like, because the legislature in Colorado requires the PUC to set an annual minimum and maximum of community solar gardens that can be installed. Xcel argues for a lower cap, the industry argues for higher, so it’s not a free market for us. That’s the first thing. The second thing is utilities still control the power lines. We don’t own them. And the utility can say, and has said, you need a lot of upgrades to your connections before we’ll approve it — very expensive upgrades that limit the installation of solar.
Our preference would be to have an open market, free competition, and the utility gets penalized if they slow down our interconnections. They get incentivized if they allow for more connections, and to drastically increase these caps.
Q: So the solar industry was meeting this week in Colorado for Solar Power and Energy Storage Mountain West, what are other major themes of this year’s gathering? Would you say the overall feeling is optimistic or pessimistic?
A: I think the feeling is optimistic. There’s a lot of growth on the horizon, a lot of political support for solar. I think the themes here are interconnection. Pushing the utilities to increase the size for all customer choice programs in the state. And I think another big theme is how Xcel does its RFPs for community solar. They get to choose the winners and losers. When they issued the last RFP in the fall, they had created incentives such that projects serving low-income communities would benefit. So developers put in bids that did that. Xcel got the bids and said, oh, this is too expensive, and only issued half of the community solar capacity the PUC allocated. So that’s a big fight brewing right now. All the low-income advocates in the state, from the Colorado Energy Office to Energy Outreach Colorado, even in the solar industry, are all up in arms because it’s so arbitrary. There are state funds set aside for this, and Xcel on its own decided that they’re not going to award all the capacity allowed. It is the first time in a decade Xcel has not awarded the full capacity. It wasn’t like they cut it by 10%. They cut it by 50%. And they received bids for over six times the capacity that was available.
Q: What steps can you take now if you feel like you’re being limited by Xcel? What tools do you have to change that?
A: A couple. The first one is, Xcel has what’s called a renewable energy standard plan that it proposed to the PUC, where it sets out targets for all distributed renewable energy for the next four years. Now the debate goes to the Public Utilities Commission. So we’re really going to be asking the PUC to work with stakeholders to try to set these targets and allowances as high as possible.
And then the other route is with the governor’s office and the legislature. We’re going to push this year to improve aspects of the program. We’d like to see the governor support the Department of Energy’s 20-gigawatt goal, and back the 1 gigawatt by 2025 goal for Colorado. There were a lot of commitments in the last election to have more renewable energy. So I think it’s a really good time to ask legislators and the governor to get behind a faster transition.
Update: We asked SunShare to comment Friday morning on the decision to ease some tariffs and continue others:
A: Biden’s extension of the solar panel tariffs walked a center line. In the end, the news was better for community solar developers like SunShare that utilize the bi-facial panels specifically exempted from the tariff extensions. Likewise, doubling the overall number of imported solar cells without tariff costs may narrow the gap in expense for U.S. solar versus the world. However, the biggest loser was our climate fight, as anything that artificially raises the cost of solar energy in the US slows a race that must move at a blistering pace.
This story was updated at 11:15 a.m. on Friday, Feb. 4, to include the federal decision on tariffs and a SunShare response.