Obama’s Renewable-Energy Plan: Let’s Raise the Roof

In his State of the Union Address, President Obama promised to use his executive authority to accelerate the construction of 10 gigawatts of renewable energy installations on public lands. Ten GW is equivalent to about 10 nuclear reactors or, according to the administration, enough capacity to power 3 million homes.

The administration’s commitment to clean energy in the State of the Union address is a good sign for renewable energy advocates everywhere. But, as encouraging as this announcement was, the administration could and should go beyond public lands by focusing on public roofs.

Under the administration’s strategy, it’s likely that much of the new capacity would come from large, utility-scale solar installations based on either photovoltaic (PV) or concentrating solar power technologies. These large facilities can provide competitively priced, zero-carbon electricity to homes and businesses in many parts of the country. Furthermore, because of the sheer size of the order, it could help push the domestic solar industry to new heights (10 GW is a big number considering that current domestic PV solar capacity is about 2.5 GW).

Precisely what Obama said he would do is to order the Department of Interior to issue permits this year to build renewable energy generation projects. That doesn’t actually get them built.

The plan faces a number of challenges before the systems actually connect to the grid:

• Much of the land in question is located far from where electricity will actually be used, entailing additional transmission and distribution costs and efficiency losses.
   
• Some of the land requires detailed environmental studies under the Endangered Species and National Environmental Policy Acts.
   
• Utility-scale solar plants must sell electricity into wholesale markets, which puts them into direct competition with low-cost plants fueled by cheap natural gas and could make construction financing hard to obtain.
   
• Nearer to RMI’s Colorado offices, residents of the San Luis Valley have raised other concerns about large, centralized plants being installed in their area.

The administration could avoid many of these issues and capture more value by shifting its focus to government-owned rooftop space.

The federal government manages a great deal of rooftop space through several entities, most notably the General Services Administration. The GSA manages 370 million rentable square feet in about 10,000 buildings that serve more than 400 civilian agencies. Not all of the rooftop space on these buildings can support solar systems and many GSA buildings are in areas with relatively poor solar energy potential. But taken as a whole, the government’s building portfolio has massive solar potential. Certain agencies are beginning to take advantage of it, including the GSA, which has approved dozens of new PV projects. SolarStrong is a 300 MW project on residential military property across the U.S. that will generate enough electricity to power 120,000 homes.

Outside of these initial projects, government-owned rooftop space is a widely underutilized public asset. This shouldn’t be the case: distributed rooftop solar projects are one of the best near-term economic opportunities for the federal government to pursue—largely because they afford a number of benefits that large, centralized projects don’t. For example:

• Rooftop systems avoid most land-use and water-related concerns.
   
• Distributed generation on “microgrids” can help reduce blackout risk and, based on RMI research detailed in Reinventing Fire, migrogrids play a key role in enabling a secure, distributed and renewable customer-centric electricity system that will power a U.S. energy future free of oil, coal and nuclear power by 2050.
   
• Perhaps most importantly, PV is increasingly cost-competitive on a retail basis in several markets and will compete across the country in the next decade. This dynamic merits further explanation: electricity sold from utility-scale solar installations must compete with very low wholesale electricity prices from mostly fossil fuel-based generators. Distributed PV projects that provide electricity to the buildings where they’re located compete with retail electricity rates that are much higher.

Given public attitudes toward government expenditures, it should also be noted that with the creation of power purchase agreements and solar leases the government no longer has to spend any additional money on such projects. Rooftop space is typically treated as a project site where outside parties finance the project and the government serves as a power purchaser (for a simple explanation of how this works in the residential market check out one solar developer’s video. For these reasons, distributed rooftop projects are one of the best near-term economic opportunities for the federal government to pursue—and one of the best long-term steps that can be taken for energy security and transformation of our aging, carbon-intensive electricity system.

To recap: as a stepping-stone toward RMI’s vision of a secure, reliable and renewable electricity future, the recent executive order directed toward public lands should be expanded to target public roofs. While some projects are already being pursued on these rooftops, the administration can make them happen faster and in more markets by mandating their construction on select sites across the country.