In the near future, solar energy will become remarkably cost effective relative to its value to the electric grid and particularly to the retail energy prices paid by consumers. Will existing distributed generation policy still work in an era of cost-effective solar?

1. FROM SMALL-TIME AND SUBSIDIZED
TO ECONOMICAL MAINSTAY OF A DEMOCRATIC GRID
THE FUTURE OF SOLAR
John Farrell
Director of Democratic Energy
October 2014

2. $0.30
$0.20
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE COST OF SOLAR FAR
EXCEEDS ITS VALUE AND
THE RETAIL ENERGY
PRICE
THE PAST
Value of solar energy (MN, 2014)
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

3. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE PAST
Value of solar energy (MN, 2014)
THE COST OF SOLAR FAR
EXCEEDS ITS VALUE AND
THE RETAIL ENERGY
PRICE
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

4. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE COST OF SOLAR FAR
EXCEEDS ITS VALUE AND
THE RETAIL ENERGY
SOLAR CUSTOMERS
PROVIDED MORE
VALUE TO GRID THAN
THEY GOT PAID FOR
THE PAST
Value of solar energy (MN, 2014)
PRICE
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

5. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE COST OF SOLAR,
VALUE OF SOLAR,
AND RETAIL ENERGY
PRICE ARE ALL
SIMILAR
SOLAR CUSTOMERS
PROVIDED MORE
VALUE TO GRID THAN
THEY GOT PAID FOR
PRESENT
THE PAST
Value of solar energy (MN, 2014)
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

6. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE COST OF SOLAR,
VALUE OF SOLAR,
AND RETAIL ENERGY
PRICE ARE ALL
SIMILAR
MINIMAL
SUBSIDIES
SOLAR CUS TOME R S NE EDED
PROVIDED MORE
VALUE TO GRID THAN
THEY GOT PAID FOR
PRESENT
THE PAST
Value of solar energy (MN, 2014)
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

7. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE RETAIL ENERGY
PRICE IS HIGHER THAN
THE VALUE OF SOLAR,
ITSELF HIGHER THAN
THE COST OF SOLAR
Value of solar energy (MN, 2014)
THE FUTURE
SOLAR CUSTOMERS
PROVIDED MORE
VALUE TO GRID THAN
THEY GOT PAID FOR
MINIMAL
SUBSIDIES
NEEDED
PRESENT
THE PAST
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

8. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
THE RETAIL ENERGY
PRICE IS HIGHER THAN
THE VALUE OF SOLAR,
ITSELF HIGHER THAN
THE COST OF SOLAR
RETAIL RATE
COMPENSATION (NET
METERING) EXCEEDS
VALUE OF SOLAR
Value of solar energy (MN, 2014)
THE FUTURE
SOLAR CUSTOMERS
PROVIDED MORE
VALUE TO GRID THAN
THEY GOT PAID FOR
MINIMAL
SUBSIDIES
NEEDED
PRESENT
THE PAST
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

9. $0.30
$0.20
TAXPAYER-FUNDED
SUBSIDIES MADE
SOLAR ECONOMICAL
$0.10
$0.00
Value of solar energy
Retail (net metering) rate
Cost of solar energy
RETAIL RATE
COMPENSATION (NET
METERING) EXCEEDS
VALUE OF SOLAR
Value of solar energy (MN, 2014)
VALUE OF SOLAR ALONE
IS SUFFICIENT TO
COMPENSATE SOLAR
PRODUCERS
THE RETAIL ENERGY
PRICE IS HIGHER THAN
THE VALUE OF SOLAR,
ITSELF HIGHER THAN
THE COST OF SOLAR
THE FUTURE
SOLAR CUSTOMERS
PROVIDED MORE
VALUE TO GRID THAN
THEY GOT PAID FOR
MINIMAL
SUBSIDIES
NEEDED
PRESENT
THE PAST
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

10. FUTURE POLICY PRINCIPLES
• Democracy: energy policy should encourage broad
ownership of energy production.
• Equity: subsidies should be accessible (not tax-based)
but progressive (funded from non-regressive sources),
and phased out over time. Producing local renewable
energy should be reasonably profitable.
• Local: policy should encourage communities to maximize
capture of their energy dollars with conservation, energy
efficiency, and local power generation.

11. FURTHER READING
• Report: Minnesota’s Value of Solar (ILSR, 2014):
www.ilsr.org/minnesotas-value-of-solar/
• An Enormous Question for ‘Solar Choice’:
www.ilsr.org/enormous-question-solar-choice
• Advantage Local: Why Local Energy Ownership
Matters: http://bit.ly/AdvLocal