An emerging battle in the renewable-energy wars is between “big solar” and “little solar,” between utility-scale arrays and panels on a family’s rooftop.
While both sides pay deference to the other, many utilities increasingly have promoted large solar installations as more cost-effective and efficient than small residential units.
Between 2010 and 2014 the amount of utility-scale arrays soared to 9,646 megawatts from just 109 megawatts, according to the Solar Energy Industries Association.
“The utility industry has embraced utility-scale solar,” said Galen Barbose, a researcher at the Lawrence Berkeley National Laboratory.
Xcel Energy, Colorado’s largest electricity utility, has agreed to buy power from a $200 million, 120-megawatt facility being built near Pueblo by Radnor, Pa.-based Community Energy.
That one unit is the equivalent of 24,000 average rooftop arrays.
But solar advocates and executives in the rooftop solar business say the comparison is false.
“Comparing utility-scale solar to rooftop solar is like comparing the price of wheat to a box of Cheerios,” said Bryan Miller, co-chairman of The Alliance for Solar Choice, a solar leasing industry advocacy group.
Utility-scale solar is wholesale power that needs to be put on high-voltage transmission lines to get to customers, while rooftop solar power is made and used right in the home.
Still, studies by the Lawrence Berkeley lab and Lazard, the international investment firm, point to lower costs for bigger arrays.
A study by the Cambridge, Mass.-based Brattle Group looked at the cost of adding 300 megawatts of solar in Xcel’s Denver area by 2019 and concluded building 300 megawatts in utility-scale plants was half as expensive as adding 60,000 rooftop units.
“Utility-scale solar is overall cheaper to build, generates more power and reduces power plant emissions more on a per-dollar basis,” said Peter Fox-Penner, one of the study’s authors.
The study calculated the 2014 cost of building and operating a utility-scale unit was 11.7 cents a kilowatt-hour, compared with 19.3 cents per kwh for rooftop solar.
Xcel’s retail electricity charge in Colorado is about 12 cents per kwh.
Projecting to 2019, depending on the inflation rate and what tax incentives are available, utility-scale solar drops to as low as 6.6 cents a kwh, while rooftop solar drops to 12.3 cents a kwh. The cost savings come from economies of scale in building the units and higher output because of better siting and maintenance and the use of mechanical devices that move panels to track the sun, the study said.
The study calculated that 300 megawatts of utility-scale solar energy would generate 597,000 megawatt-hours a year, compared with 400,000 megawatt-hours for an equal number of rooftop megawatts.
The Brattle Group study was done for First Solar Inc., an installer of utility-scale projects, and the Edison Electric Institute, the utility industry’s trade group.
The Solar Alliance’s Miller charged the two with waging a “solar vs. solar war.”
The Brattle study was based on “Enron-style accounting,” Miller said, referring to the Houston energy company that went bankrupt in 2001 amid an accounting scandal.
The forces supporting rooftop solar, including solar leasing companies, installers and solar advocates have come out with their own studies.
An analysis by Berkeley, Calif.-based Crossborder Energy found the benefits of utility-scale solar and rooftop about equal. This was based on savings from things such as transmission costs, project financing, improved reliability and reduced “line loss” — the power lost sending electricity long distances.
The study was paid for by the nonprofit, solar advocacy group Vote Solar.
The Brattle study did take into account that 300 megawatts on rooftops would save $564,000 a year in line losses over utility-scale.
Reliability, however, may be overvalued because rooftop units typically lack backup storage and are located where home owners want them, not for optimal performance, Fox-Penner said.
“There is no doubt that utility is cheaper, but that isn’t the only consideration,” said Blake Jones, president of Namaste Solar, a Boulder-based installer of rooftop and commercial arrays.
“Utility-scale is wholesale power, and rooftop is retail power being used where it is produced,” Jones said.
Big solar arrays give utilities more control over generating and selling the electricity, and rooftop units give customers more control, Jones said.
Another big difference is that 300 megawatts of utility-scale solar energy requires a large investment by a developer or utility that must be recouped from all customers, while homeowners and leasing companies pay for the rooftop units.
“It is adding solar power at no cost to the rest of the customers,” Jones said.
Residential solar homes do get to sell their excess electricity onto the grid at Xcel’s retail rate. This is the “net metering” credit.
Many utilities, including Xcel, have raised objections to net metering, arguing that the credit is higher than the benefit rooftop solar contributes, with nonresidential customers paying the difference.
The Colorado Public Utilities Commission is r eviewing the state’s net metering policies.
“Utilities weren’t very interested in solar until their customers started putting panels on their roofs,” said Adam Browning, executive director of Vote Solar. “It’s the customers who are still pushing the issue.”
And just because utility-scale is less expensive now doesn’t mean that it will remain so, said Severin Borenstein, a professor at the University of California’s Haas School of Business.
“Improvement in material systems may make home solar more efficient,” Borenstein said. Similarly, improved storage would also make residential systems more competitive.
“We shouldn’t pick winners right now,” Borenstein said.
Mark Jaffe: 303-954-1912, mjaffe@denverpost.com or twitter.com/bymarkjaffe
