Just 20 cities, representing just 0.1 per cent of the land area of the United States, account for 7 per cent of solar PV capacity in the country. These top 20 cities contain more solar power today than was installed in the entire U.S. just six years ago. PES investigates.
Solar power is on the rise across America. The country has more than 200 times as much solar photovoltaic capacity installed today as it did in 2002. With solar module prices coming down, increasing national awareness of solar energy, and a growing legion of solar businesses large and small, solar power is emerging as a mainstream energy solution with widespread benefits for our health, our economy and the environment.
America’s major cities are helping to lead this clean energy revolution. Forward-thinking local governments and large cities in leading states are benefiting from smart policies that encourage investment in solar PV installations and the growth of local jobs.
Portland, Oregon is not known for its sunshine. Portland’s reputation for rainy weather is only partially deserved – summers are often sunny, compensating for the frequently cloudy winters. Nonetheless, the city with the reputation for gray skies has emerged as one of the nation’s bright spots for solar energy – largely due to the creative efforts of local residents and city officials.
Portland’s path to solar leadership began in 2007 when the city was selected for the federal government’s “Solar America Cities” program. This program provided the city with funding and support for its efforts to develop local solar power. Two years later, when a neighbourhood in Portland wanted to install solar panels, they partnered with the non-profit Energy Trust of Oregon to hold workshops, select a contractor and purchase the panels collectively, cutting costs for themselves and their solar installer.
The successful collective purchasing model was quickly replicated citywide. Portland’s Bureau of Planning and Sustainability worked with Portland’s Neighbourhood Coalition network, the Energy Trust of Oregon and Solar Oregon to establish the “Solarize Portland” program. Between 2009 and 2011, six Solarize Portland campaigns empowered neighbourhood associations to work with residents.
These campaigns helped residents learn about solar incentives and provided them access to solar panels, supplied by contractors that obtained a large volume of business at low marketing costs. As a result of these campaigns, Portland added 1.7 megawatts (MW) of solar power on 560 homes in the city between 2009 and 2011. The “solarize” model has since been adopted by other cities, such as Boston and Seattle.
However, the city of Portland didn’t stop with collective purchasing. City officials are working to streamline the solar permitting process by launching online permitting in 2016 and have launched “Solar Forward,” a crowd-sourcing initiative that asks community members to donate money to fund solar projects on community facilities.
Portland’s efforts have been supported by state-level policies, including a renewable energy standard with specific requirements for solar energy, tax credits for residential and some commercial solar energy installations, and a pilot feed-in tariff program.
Overall, city action strengthened by state policy has allowed Portland to jump from less than 1 MW of installed solar PV capacity in 2007 to more than 15 MW of solar PV capacity at the end of 2013. This puts Portland in the top 15 of the 57 major cities we surveyed in this report.
Portland is not the only U.S. city to use creative and strong public policies to vault into solar leadership. Other cities in every region of the United States have experienced dramatic progress in recent years in expanding solar energy.
In July 2013, we released Lighting the Way, which identified the nation’s top states for solar energy and linked their success to the adoption of smart public policies that have fuelled the growth of solar energy. In this report, we provide the first national- scale comparison of solar photovoltaic (PV) installations in some of America’s largest cities.
The lesson of cities like Portland is clear: cities that take effective action to lower the barriers to solar energy development for their residents and businesses can make a dramatic leap toward a cleaner energy economy.
That pathway is open to any city that wishes to pursue it. For the sake of the environment, public health and the health of local economies, the time has come for all states and local governments to follow the example of the nation’s leading “solar cities” by finding new and creative ways to encourage their residents, businesses and local utilities to “go solar.”
Solar energy is evolving quickly into a mainstream energy source. That evolution has been made possible by a series of innovations that have taken place throughout the solar energy industry and economies of scale that have driven down the cost of solar equipment.
Decades of research have resulted in solar cells that are more efficient than ever at converting sunlight into energy – enabling today’s solar energy systems to generate more electricity using the same amount of surface area as those of a decade ago. Researchers continue to discover new ways to make solar panels more efficient at converting sunlight to electricity, which will make solar panels even more powerful tools for electricity generation.
Innovations in manufacturing, the creation of new financing and business models, and improvements in other areas have also helped solar energy become more accessible and less costly over time. An analysis by the National Renewable Energy Laboratory (NREL) shows that large-scale solar manufacturing operations can produce solar equipment at a lower cost, creating opportunities to develop further economies of scale and achieve greater cost reductions.
As a result of these innovations and growing economies of scale, the cost of solar energy has plummeted in recent years and continues to fall. The average cost of solar PV panels less than 10 kilowatts (kW) in size fell by 14 per cent between 2011 and 2012, and the cost of solar panels of all sizes continues to drop. In Hawaii, solar energy has already achieved “grid parity” – that is, solar electricity is cheaper than electricity from the grid, even without government incentives.
Evidence from elsewhere in the world suggests that solar energy prices still have room to fall further. The cost per watt of an installed solar energy system in Germany is roughly half that of the United States due to a variety of factors, including larger average system size, but primarily due to lower “soft costs” – costs such as those associated with attracting customers, installing the systems, completing paperwork, and paying taxes and permitting fees.
Installations in Germany had quicker project development timelines and lower overhead. Another recent analysis found that the same set of non-panel related solar project installation costs were nearly four times higher in the U.S. than in Germany, adding an additional 90 cents/watt to the cost of solar installations.
While there are still opportunities to reduce the cost of solar panels, the greatest immediate savings can be achieved by reducing these soft costs. Soft costs in the U.S. have remained relatively consistent – even while panel prices have dropped 60 per cent between 2011 and 2013 – and can make up to 64 per cent of the total cost of an installed solar energy system as of 2013.
The U.S. Department of Energy’s (DOE) SunShot Initiative, which seeks to lower the cost of installing a solar project to $1 a watt by 2020, is working with the solar industry and other stakeholders in a comprehensive effort to reduce soft costs. If successful, and the DOE recently announced they are 60 per cent of the way toward their goal for cost-competitiveness of utility-scale solar projects, solar energy will be even more cost competitive in the years to come.
America’s solar energy capacity tripled in two years
The year 2013 was a historic year for solar power. The United States passed the 10 gigawatt (GW) mark for solar electric capacity mid-year and installed 4.75 GW of solar PV in 2013 alone, which is the most solar power the United States has ever installed in a single year. The solar power installed in the U.S. in 2013 was worth $13.7 billion and was the second-largest source of new generating capacity in the U.S. that year.
The amount of solar PV capacity in the United States tripled between 2011 and 2013 and increased over 200-fold from 12 years ago to the more than 12,000 MW installed by the end of 2013.
A notable portion of America’s solar growth is happening in America’s cities. Leadership from municipal utilities, solar-friendly city policies and state-wide renewable electricity standards are allowing residents, businesses and solar developers to shift urban electricity sources to clean solar power.
While still accounting for a relatively small percentage of America’s energy needs, the recent phenomenal growth rate of solar power indicates that, with smart public policies, solar energy can continue to emerge as an important source of electricity in America’s cities.
Smart policies have fuelled growth
Those cities that have opened the door for solar energy with the adoption of strong, smart public policies are building the nation’s most successful solar markets, not necessarily the cities that receive the most sunlight.
Cities where homeowners are paid a fair price for the energy they supply to the grid, where installing solar panels is easy and hassle free, where there are attractive options for solar financing, and where there has been a strong commitment to support solar energy development, are seeing explosive growth in solar power.
Top solar cities have followed a variety of paths in developing solar energy. In some cases, city governments have played an important role in jump-starting local solar growth by setting goals for installed solar capacity, implementing solar-friendly laws, and welcoming solar businesses.
Cities with municipal utilities have had an even more direct influence on solar power adoption by establishing ambitious requirements for solar energy and implementing effective financial incentives. Some cities have taken steps to increase the use of solar energy on public facilities, while, in other cities, strong state policies are driving local solar power growth.
Cities can most effectively promote solar power when city, state and utility policies work together. This section will describe policies and practices that have encouraged solar power growth in leading solar cities.
Benefits
Furthermore America’s leading solar cities are bringing the benefits of solar power to residents. Solar power offers an array of environmental, public health and economic benefits for cities – benefits that some of the nation’s leading solar cities are working to realize. Since Hurricane Katrina, New Orleans has been a symbol of the disastrous impacts of extreme weather events. As a “Solar Star” city, New Orleans is doing its part to help mitigate the adverse impacts of global warming by generating more electricity with solar power and less with fossil-fuelled energy sources.
The solar PV capacity installed in New Orleans at the end of 2013 can produce more energy than 2,500 average homes consume in a year, and this is clearly just a start in a city of 370,000 people. In cities vulnerable to drought or prone to water shortages, solar power is also a water-saver.
In drought-stricken Texas, for example, San Antonio and Austin are avoiding millions of gallons of water waste by transitioning to solar power. In California, where more than 90 per cent of the state was experiencing severe to exceptional drought conditions as of February 2014, solar PV capacity in California cities will be an important energy solution in a state that cannot needlessly waste water on electricity generation.
Solar power can also save city governments money. In Neptune Beach, Florida, right outside the city of Jacksonville, energy bills for city hall have been dropping rapidly thanks to the 140 solar panels that have been installed on top of the city building. Harnessing solar energy has reduced electricity costs for the Neptune Beach city hall by $7,300 in 2013, as compared to 2012.
Like Neptune Beach, Jacksonville encourages sustainable city buildings; it established a “Sustainable Building Program” in 2009 that required all new city buildings to meet green building certification standards, which can include solar panel installations on buildings.
Cities and states that install a significant amount of solar power are attracting solar jobs. Los Angeles’s “100 MW Feed-in Tariff” program is expected to create more than 2,000 local jobs within the city. As California leads the country in solar capacity, it is also home to the largest number of solar jobs in the country, with more than 47,000 state-wide jobs in solar installation and solar manufacturing.
Little cities that could
57 major cities have been studied in the report, but smaller cities have taken noteworthy steps to promote the growth of solar power.
Lancaster and Sebastopol, California
Two California cities – Lancaster and Sebastopol – have adopted requirements that all newly built and renovated homes and commercial buildings incorporate solar energy.
These cities were the first in the country to enact such a requirement, and these forward-looking policies were driven by determined local officials. The Sebastopol City Council unanimously voted to pass the policy, which requires 2 watts of solar power per square foot for new buildings, or enough solar power to offset 75 per cent of the building’s annual electricity usage.
Lancaster City Council passed a similar law requiring every new housing development to install an average of 1 kilowatt (kW) of solar power per home. According to Lancaster Mayor Rex Parris, 26 per cent of the city’s electrical needs were met with solar power as of January 2014.
This includes 7.5 MW of solar power installed on 25 schools and 8 MW of solar power installed at Lancaster High School and Antelope Valley College. Lancaster’s program to buy solar power back from schools will save these schools $43 million in energy bills over the next 25 years.
Lancaster is creating a model for other cities to follow according to Mayor Parris, who said, as quoted by The Planning Report: “The goal is to create a template for other cities. Ultimately the world is going to wake up and realize that climate change threatens the very existence of the species. Once people wake up to that fact, they’ll want a template set – so this is what you do to do your part. Each city can do this to lower their carbon footprint.”
Gainesville, Florida
Officials in Gainesville, Florida, have implemented several effective policies making solar energy more accessible to its citizens. The most prominent program contributing to Gainesville’s solar success was the city’s feed-in tariff (FiT) for solar photovoltaic systems, which was offered until the end of 2013. The city was first in the nation to introduce per-kilowatt hour incentive payments for solar power.
The city’s municipal utility, Gainesville Regional Utilities (GRU), provided predetermined rate payments to owners of qualified residential and commercial photovoltaic (PV) systems based on the amount of electricity they generated. In March 2014, GRU’s total solar capacity reached 18 MW from its FiT program and 2 MW from net metering, for a total of 20 MW of installed solar capacity in GRU’s service area.
While Gainesville accounts for only 0.7 per cent of Florida’s population, the service area of the Gainesville utility (which includes some outlying areas around Gainesville) accounted for nine per cent of the state’s total installed solar energy capacity at the end of 2013.
Gainesville is no longer offering the FiT in 2014 but will continue to offer net metering to its customers; this means Gainesville solar producers can no longer receive above-retail rate FiT payments for solar power production but will receive credit for the electricity they deliver to the electric grid through net metering.
A study of Colorado’s solar industry also revealed state-wide economic benefits. Since 2007, the Colorado solar industry has created the equivalent of 10,790 full-time jobs, and solar employees have amassed over $500 million in earnings
