The State of the Solar Industry: Page 2 of 9

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    The State of the Solar Industry
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    While Tesla created a lot of buzz with its Solar Roof announcement, it remains to be seen whether the company can succeed where so many others have failed—not to mention what firefighters will make...
  • The State of the Solar Industry
  • Green Power EMC won SEPA’s 2016 Cooperative Utility of the Year award
  • Signs of mainstreaming
  • Solar roof tiles

Smart Electric Power Alliance (SEPA at sepapower.org)
Julia Hamm, president and CEO

Created in 1992, SEPA is an educational nonprofit founded to help utilities deploy and integrate solar, storage, demand response and other distributed energy resources. Its current 1,000 members include utilities, independent system operators, large energy users, corporations and nonprofits. As the president and CEO of SEPA since 2004, Julia Hamm has 15 years’ experience advising and collaborating with utilities, manufacturers and government agencies on renewable energy and energy efficiency strategies and programs.

What recent developments have had positive or negative impacts on the US solar industry?

Certainly, a core issue that has dominated the news and minds of many in our industry has been the ongoing state-level discussions about rate reform and net metering. On the negative side, some of these discussions continue to be framed as a basic conflict between the solar industry and utilities, and some utilities continue to be viewed as anti-solar, even as they interconnect thousands of new solar rooftops and add new utility-scale or community-shared solar projects to the grid. On the plus side, we are also seeing more negotiated settlements in these cases—for example, in Colorado, Minnesota and Montana—as a result of active efforts to engage all industry stakeholders in the process. And in some instances—most notably in Hawaii—we are seeing that, given specific market economics, a change from retail rate net metering does not automatically mean that the solar market nosedives. The fact is, solar has become a mainstream source of power generation that when smartly deployed will increasingly offer benefits to customers, utilities and the grid; prices will continue to drop; and rate reform will be part of that evolution.

As we enter 2017, what initiatives is SEPA prioritizing?

In the past year, SEPA has rebranded from the Solar Electric Power Association to the Smart Electric Power Alliance. This reflects our expanded mission to echo the evolution of the solar industry itself, from its initial focus on solar deployment and market growth, to a wider view encompassing a range of distributed energy technologies, such as storage, demand response and electric vehicles. We have also stepped up our research with our Beyond the Meter series, which focuses on the grid integration of distributed technologies. In the coming months, we will release reports on microgrids, distributed resource planning and electric vehicle charging. Our 51st State Initiative has produced strategies and a recognized, effective process for market transformation. In the coming year, we hope to see one or more states adopt this model as the foundation for their own market evolution.

How has SEPA’s mission evolved over time?

Our most recent rebranding is not our first. We were originally called the Utility Photovoltaic Group, or UPVG. Our new name, Smart Electric Power Alliance, allows us to build on a brand with wide recognition in the industry and continue to grow. We are proud of our history and remain dedicated to helping utilities make smart solar decisions. We want to become a platform for all industry stakeholders, a place where they can share diverse views and ideas, and find the collaborative new solutions that are needed to reframe the narrative of our industry. The expanded scope of our mission directly addresses the challenges of solar integration on the grid and the role of distributed technologies in ensuring that solar continues to thrive.

The growth of community solar is in part a result of the industry’s customer-centric focus, and SEPA continues to play an active role in helping utilities design these shared solar programs. However, the process of change is uneven and uncomfortable; both utility and solar industry business models will likely continue to evolve. The research, collaborative processes and market transformation models SEPA has developed and supports are all aimed at ensuring that even as these important and necessary changes unfold, our energy markets remain vital and provide real benefit— economic, environmental and social—for all.

Many of your members are utilities. How would you compare utility perspectives on energy storage versus solar assets?

In the bigger picture, utilities are increasingly seeing solar, storage and other distributed technologies as potential grid assets. We are seeing many utilities launching solar-plus-storage pilots to test out how to optimize these technologies to provide both customer and grid benefits. At the other end of the spectrum, rooftop solar has been a challenge for some utilities primarily because they cannot see or control behind-the-meter assets and the impacts these technologies may have on local distribution systems. Cross-industry collaboration and partnerships are beginning to offer potential solutions to this challenge. For example, SEPA recently partnered with Nexant on a report laying out a practical model for calculating the locational value of solar and other distributed technologies, which is a critical need for integrating distributed energy resources in utilities’ distribution resource planning processes.

As the industry scales, how would SEPA like to see rate design and market opportunities for DERs evolve? What changes might best align our policies to ensure maximum stakeholder benefit?

As an educational nonprofit, SEPA does not promote or endorse any one approach or strategy for rate design, but we have laid out basic doctrines, structures and concepts for market transformation that actively involves all stakeholders. As detailed in our recent report, Blueprints for Electricity Market Reform, the four basic doctrines are: promote efficiencies; clearly define roles; identify principles of rate making; and foster customer choice. The four concepts that grow out of those doctrines are flexibility, incrementality, affordability and transparency, or FIAT. FIAT can be an extremely effective tool in helping ensure that stakeholders are focusing on real, actionable and meaningful transitions for the industry.

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