Distributed Renewable Energy
| Author | K.K. DuVivier |
| Pages | 489-526 |
Page 489
I. Introduction
is chapter will cover “distributed generation” (DG), the
generation and use of energy either on-site or within only
the lower voltage distribution-level grid infrastructure,
usual ly below 35 kilovolts.1 DG need not be connected
to the traditional grid, and there are se veral reasons why
owners of DG sources may choose not to be connected.
Some are drawn by the lure of simplicity and less regula-
tion. Others might point to the $20 to $50 billion per year
lost because of current disruptions in the power grid2 as
well as fears that e xtreme weather from climate change will
Author’s Note: e author wishes to thank the following for their
valuable input on the drafts of this chapter: Rebecca Cantwell,
Joe DuVivier, Rick Gilliam, David Hurlbut, Dirk and Katherine
Jordan, Norbert Klebl, Laurent Meillon, Richard McAllister,
Whitney Painter, Emmett Perl, Karl Rabago, Timothy Schoechle,
Bart Sheldrake, Jessica Shipley, Martin Voelker, and Lance Wright.
She also wishes to thank Alice Hansen, Amy Jones, Laura Martinez,
Erica Montague, Dana Showalter, and Connor Wilden for their
valuable research and citation assistance.
1. Another commonly used term is “distributed energy resources” (DER), but
because the legal denition for this acronym varies across jurisdictions, we
will instead use the more general DG designation. E.g., New York denes
DER narrowly as generation, storage, and demand response, while California
also includes energy eciency and electric vehicles.
2. T W H, U S M-C S D
D 50 (2016) [hereinafter M-C S], avail-
increase these disruptions.3 Yet others might cite cyberse-
curity issues: for example, “a targeted cyberattack could
leave 15 states and 93 million people from New York City
to Washington, D.C. without power . . . [impacting] the
U.S. economy at between $243 billion and $1 trillion.”4
Finally, commentators have concluded that the right of
individuals to self-generate o-grid is protected by law and
should be preserved if exercising it contributes to decar-
bonization goals.5
is chapter recommends policies that support grid-
connected DG instead of policies that encourage “system
able at https://unfccc.int/les/focus/long-term_strategies/application/pdf/
mid_century_strategy_report-nal_red.pdf.
3. R J. C, C R S, W-
R P O E S R (2012).
4. Blackout! Are We Prepared to Manage the Aftermath of a Cyberattack or Other
Failure of the Electrical Grid?: Hearing Before the Subcomm. on Economic
Development, Public Buildings, and Emergency Management of the House
Comm. on Transportation and Infrastructure, 114th Cong. 65-71 (2016)
(statement of Richard Campbell, Specialist in Energy Policy, Congressional
Research Service).
5. Jon Wellingho & Steven Weissman, e Right to Self-Generate as a Grid-
Connected Customer, 36 E L.J. 305 (2015); see also R M
I ., T E G D: W
W D S G P S C W
T U S (2014), available at https://www.rmi.org/
wp-content/uploads/2017/04/RMIGridDefectionFull_2014-05-1-1.pdf.
But see M L. Z, I G D L C (2016)
(concluding that going o-grid is not legal in California), http://www.cailaw.
org/media/les/IEL/Publications/2016/grid-detection-vol10no1.pdf.
Chapter 19
Distributed Renewable Energy
by K.K. DuVivier
Summary
For individuals, the heating and cooling of buildings is the second largest source of U.S. CO2 emissions after
transportation. is chapter suggests pathways to help deploy the two most promising categories of U.S. distrib-
uted renewable energy resources to reduce these emissions—photovoltaic solar matched with storage and ther-
mal sources for hot water and for heating and cooling buildings. Distributed generation is probably the energy
source most impacted by dierent levels of government and nongovernmental actors. However, distributed
generation is also most immediate to consumers, especially with new technologies or rate structures that give
them feedback about their own individual generation and consumption patterns. is, along with exciting new
leaps in distributed generation technologies, suggests there are opportunities for distributed generation to play
an increasing role in signicantly decarbonizing U.S. energy.
Page 490 Legal Pathways to Deep Decarbonization in the United States
exodus”6 or “grid defection”—such as through indepen-
dent solar-plus-storage sy stems wit hout grid-con nected
external generation and transmission. O-grid systems
could result in wasteful duplication or overbuilding of suf-
cient storage to carry an on-site system through winter
or occasional periods of low sun that are not necessary for
average load periods during most of the year. In addition,
utilities would not be able to benet from the customer
storage or excess electricity ha rnessed by o-grid photovol-
taic (PV) systems.7
Furthermore, there are several advanta ges in having con-
nected DG, including: (1) avoiding electricity losses dur-
ing transmission and distribution (averaging 5% or higher
during transmission8 and 27% during distribution in some
studies)9; (2) the reduced costs of not having to build addi-
tional transmission from a central plant to distribution
areas10; (3) less variability in renewable resources because
spreading them over a wider geographic area makes them
less susceptible to local weather variations11; (4) exibil-
ity for the creation of future microgrid capabilities; and
(5) more local jobs and expertise for community-based
incremental growth in comparison to large -scale construc-
tion projects often developed by a sudden and short-term
inux of outsiders. In addition, DG “solar-plus-storage,” as
discussed in Sect ion II.B below, can provide resiliency and
community energy security through backup power as well
as grid stabilization benets. A grid system that integrates
DG resources will be more complex than the current grid
in both its technical and regulatory aspects, but the ben-
ets are signicant.
For individuals, the heating and cooling of build-
ings is the second largest source of U.S. carbon dioxide
6. Steven Ferrey, Ring-Fencing the Power Envelope of History’s Second Most
Important Invention of All Time, 40 W. M E. L. P’ R.
1, 14 (2015). e article argues that production of electricity, which was
designated the second most important invention in human history behind
the wheel, is facing increasing pressure for policies that “ring-fence cash
benets for certain customers at the expense of others.” Id. at 4.
7. Although many of the recommendations contained in this chapter would
also apply to non-grid-connected DG, the main focus of this chapter will
be on grid-connected DG.
8. U.S. Energy Information Administration (EIA), Frequently Asked Ques-
tions—How Much Electricity Is Lost in Transmission and Distribution in the
United States?, https://www.eia.gov/tools/faqs/faq.php?id=105&t=3 (last
updated Feb. 16, 2017).
9. Jennifer A. Neuhauser, Allowing Utilities to Compete in the Distributed Energy
Resources Market: A Comparative Analysis, 3 LSU J. E L. R
375, 382 n.43 (2015) (citing J.D. Kueck et al., Voltage Regulation: Tapping
Distributed Energy Resources, P. U. F., Sept. 2004, at 46).
10. In 2016, Vote Solar reported that 13 transmission projects had been cancelled
due in part to energy eciency and rooftop solar, for a savings of $192 million
to California consumers. Adam Browning, Summer Update Part 3: Building
a Modern Grid, V S, Aug. 18, 2016, https://votesolar.org/about-us/
news-and-events/news/summer-update-part-3-building-modern-grid/; Bri-
ana Kobor, Rooftop Solar and Energy Eciency Just Saved Californians $192
Mil. in Transmission Cost, V S, May 20, 2016, https://votesolar.org/
usa/california/updates/rooftop-solar-saves-millions/.
11. M M ., N R E L-
(NREL), E P B E
I M W I (2013) (NREL/
TP-5500-57115).
(CO2) emissions after transportation.12 According to the
Deep Decarbonization Pathways Project (DDPP) policy
report,13 residential uses accounted for 20% of U.S. CO2
emissions in 2012. Fourteen percent of this total came
from residential electricity and 6% from residential com-
bustion of fossil fuels, such as natural gas for hot water or
space heating. According to the U.S. Energy Information
Administration, residential uses still accounted for 19.2%
of U.S. CO2 emissions in 2016, with 13% coming from
residential electricity and 6% from residential combustion
of fossil fuels.14
A strategy that addresses emissions from both elec-
tricity and combustion sources is zero net energy (ZNE)
buildings.15 While denitions may vary, under Califor-
nia’s ZNE building standard, the total energy consumed
over the year is equivalent to the amount of carbon-free
energy produced on-site.16 An important aspect of ZNE
buildings is energy eciency, as discussed in Chapters 9
through 12. is chapter focuses on the other half of the
ZNE equation: on-site carbon-free or low-carbon genera-
tion of electricity or heat to reduce residential demands
from electricity or gas pipeline infrastructure.
Fifteen percent of U.S. electricity came from renew-
able sources in 2016. At 6.5%, hydropower represents the
largest portion of this generation with wind power next at
5.6%. Despite these numbers, hydropower and wind are
not the principal generation types within t he DG category.
A November 2016 report from the National Renewable
Energy Laboratory (NR EL) concludes that the “resource
potential for distributed wind exceeds the total U.S. elec-
tricity demand,” yet that same report notes that the cumu-
lative installations of dist ributed wind in the United States
totaled only 934 megawatts (MW ) of capacity in 2015.17
Federal, state, and local policies wil l also have a signicant
impact on how much of the potential for new capacity is
realized.18 Distributed hydropower is even less prevalent,
12. U C S, C S: P S
L-C L 83 (2012).
13. J H. W ., P D D
U S, U.S. 2050 R, V 1: T R (Deep
Decarbonization Pathways Project & Energy and Environmental Economics,
Inc., 2015), available at http://usddpp.org/downloads/2014-technical-report.
pdf [hereinafter DDPP T R].
14. EIA, Frequently Asked Questions—What Are U.S. Energy-Related Carbon
Dioxide Emissions by Source and Sector?, https://www.eia.gov/tools/faqs/faq.
php?id=75&t=11 (last updated May 16, 2017).
15. See, e.g., California Residential ZNE Action Plan, Links to Resources, http://
www.californiaZNEhomes.com/links-and-resources (last visited Dec. 26,
2017).
16. See C. C R. tit. 24 (California’s building energy eciency standards).
California’s Residential New Construction Zero Energy Action Plan aims to
make all new homes ZNE starting in 2020.
17. E L ., NREL, A F D
W: O B--M P v, vi (2016)
(NREL/TP-A20-67337), available at https://www.energy.gov/sites/prod/
les/2016/11/f34/assessing-future-distributed-wind.pdf. In addition, com-
munity wind is common in Europe, but has not been similarly embraced
in the United States.
18. See id. at vii.
Distributed Renewable Energy Page 491
as new technologies, such as in-pipe hydropower, are still
in the pilot project phases.19
is chapter will address the pathways to best deploy
the two most promising categories of U.S. distributed
renewable energy resources. Section II will focus on PV
solar, and Section III will focus on therma l resources.20
Each section discusse s the characteristic s of the technol-
ogy, legal issues aecting its more widespread use, and
recommended legal pathways for addressing obstacles.
Finally, Section IV discusses additional policy issues
related to the large-scale deployment of these resources,
and Section V concludes.
II. Distributed Resources—PV Solar
PV solar is unique. In comparison to all other forms of
generation, PVs produce electricity without using a genera-
tor or any moving parts. Instead, electricity ow is created
when electrons in the panels or modules are energized by
exposure to the sun’s rays. Consequently, PVs can capture
electricity on-site, silently, without the use of water or fuel
or the release of any emissions.
In 2011, the U.S. Department of Energy (DOE)
launched the SunShot Initiative. e goals of this initiat ive
included reducing costs for solar energy to $0.06 per kWh
by 2020, and the new goal for 2030 is $0.03 per kWh.
Although solar power met less than 1% of U.S. electricity
demand in 2010, the expectation was that price declines
would increase U.S. solar generation to approximately 14%
by 2030 and 27% by 2050.21
Solar power is well on its way to meeting these price
decline goals. e cost of solar installations “dropped by
more than 70%” since 2010,22 and is expected to drop by
another 66% by 2040.23 In 2014, generating electricity
from one’s own PV panels was less expensive than purchas-
ing it from the local utility in 42 of the 50 largest cities in
the United States,24 and by 2016, DG solar was at grid par-
19. See, e.g., Terry Slavin, From Oregon to Johannesburg, Micro-Hydro Oers
Solution to Drought Hit Cities, G, Sept. 18, 2015, https://www.
theguardian.com/sustainable-business/2015/sep/18/portland-oregon-
drought-microhydro-electricity-from-water-pipes-lucid-energy-california.
20. Although small turbines exist for wind power, the potential for this resource
is too small for discussion here. In addition, community wind is common
in Europe, but has not been similarly embraced in the United States.
21. DOE, SS V S (2012) (DOE/GO-102012-3037), available
at http://energy.gov/sites/prod/les/2014/01/f7/47927.pdf.
22. Solar Energy Industries Association (SEIA), Solar Industry Data, https://
www.seia.org/solar-industry-data (last visited Dec. 26, 2017).
23. Executive Summary, in N E O 2017, at 2 (Bloomberg Finance
L.P. 2017) [hereinafter N E O 2017], available at https://
data.bloomberglp.com/bnef/sites/14/2017/06/BNEF_NEO2017_Ex-
ecutiveSummary.pdf; see also Kevin Brehm, Distributed Solar Provides Real
Savings to Customers, RMI O, July 12, 2017, https://rmi.org/news/
distributed-solar-provides-real-savings-customers/.
24. J K A P, NC C E T
C, G S A: R S’ V C-
A’ L C, available at https://nccleantech.ncsu.
edu/wp-content/uploads/Going-Solar-in-America-Ranking-Solars-Value-
to-Customers_FINAL1.pdf.
ity in 20 states.25 is is e xpected to increase to 42 states by
2020.26 In 2015, new solar PV systems were being installed
at a rate of one every 1.6 minutes.27
Solar PV installations grew from 0.1 gigawatts (GW)
in 2006 to installations of 14.8 GW in 2016. With 5,096
MW, California alone accounted for more than a third
of the 2016 installations. Utah, Georgia, Nevada, and
North Carolina came in at second, third, fourth, and fth
place, each with approximately 1,000 MW of solar PV
installations that same year. Utility solar PV insta llations
increased the most, but residential and nonresidential solar
PV also grew steadily.28
In the context of deep decarbonization goals, a 2016
report by NREL found that “solar [both utility and DG]
plays a major role [resulting] in ensuring environmental
and health benets; [and] that the existing eet of solar
power plants is already oering a down-payment towards
those benets. . . .”29 e prospect of helping the world
signicantly reduce greenhouse gas (GHG) emissions, as
well as ongoing price and technology improvements, led
the International Energy Agency (IEA) to project that
solar will become the dominant electricity source globally
within two decades.30 Financial and investment banking
groups, including Bank of America, Barclays, Citigroup,
Fitch Ratings, Goldman Sachs, Morga n Stanley, Deutsche
Bank, Abu Dhabi National Bank, a nd UBS, joined in this
assessment, and Deutsche Bank specically noted that
“solar-plus-storage is the next killer app.”31
Section II.A provides background about the potential
capacity for solar PV, while Section II.B explains solar-plus-
storage technologies, before Section II.C lays out the legal
issues and pathways for promoting solar PV installation.
25. Cory Honeyman, U.S. Residential Solar Economic Outlook 2016-2020:
Grid Parity, Rate Design, and Net Metering Risk, GTM R., Feb. 2016,
https://www.greentechmedia.com/research/report/us-residential-solar-
economic-outlook-2016-2020.
26. Id.
27. Justin Baca, New Solar System Activated Every 1.6 Minutes in Q3, SEIA,
Dec. 9, 2015, http://www.seia.org/blog/new-solar-system-activated-every-
16-minutes-q3. In 2014, there was an installation every 2.5 minutes.
Stephen Lacey, A Solar System Is Installed in America Every 2.5 Minutes,
G M, Jan. 12, 2015, https://www.greentechmedia.com/
articles/read/a-solar-system-is-installed-in-america-every-2.5-minutes.
28. R M ., NREL, Q4 2016/Q1 2017 S I
U 29 (2017) (NREL/PR-A-), https://www.nrel.gov/docs/
fy17osti/68425.pdf.
29. R W ., L B N L NREL,
O P SS: T E P H
B A H P S E
U S vii (2016) (NREL/TP-A20-65628), available at https://
www.nrel.gov/docs/fy16osti/65628.pdf.
30. Press Release, IEA, How Solar Energy Could Be the Largest Source of Elec-
tricity by Mid-Century (Sept. 29, 2014), http://www.iea.org/newsroom/
news/2014/september/how-solar-energy-could-be-the-largest-source-of-
electricity-by-mid-century.html.
31. Deutsche Bank Market Research concluded that “[s]olar plus storage is the
next killer app.” V S J B-P, D
B M R, C C: S G P
L O P E 4 (2015), available at https://www.db.com/cr/en/
docs/solar_report_full_length.pdf.
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