Advanced Energy Perspectives

NEWS: Clean Diesel’s Identity Crisis; Solar’s Ongoing Tug-of-War

Posted by Lexie Briggs

Sep 16, 2016 11:58:24 AM



This week, the news is all about the complicated nature of industry. Neither good news nor bad in the advanced vehicles industry as electric vehicles continue to grow and the Dieselgate controversy continues to be, well, controversial. We’ll also check in with several states as they grapple with how to exactly to regulate (i.e., credit and/or charge customers for) distributed resources like rooftop solar.

Dieselgate, which is apparently what we’re calling last year’s VW emissions-cheating scandal, is brewing trouble for the German automotive giant, and might have lasting implications for advanced vehicles. First, in the United States, a VW engineer pled guilty of conspiracy to cheat governmental regulations. The Department of Justice says that the engineer, James Robert Liang, admitted to being part of a larger conspiracy to “defraud U.S. regulators and VW customers.” He could face up to five years in prison.

Over in Europe, Elżbieta Bieńkowska, EU commissioner for industry and international markets, is calling on the Europe to shift gears, as it were, and focus on electric vehicles. Bieńkowska testified before the European Parliament’s Dieselgate Committee on Monday. One parliamentarian, Pablo Zalba Biedegain, a Spanish Christian Democrat, noted that the issue is “an opportunity to adapt the European automotive market to the 21st century.” (As an aside, I find it astonishing that an official European body is using the –gate suffix in the name of an official governmental committee. William Safire must be doing whatever the opposite of spinning in his grave is. Shimmying?)

Volkswagen, for its part, is already transitioning. The company announced earlier this year that it will introduce more than 30 new electric vehicles in the next 10 years.

While we at AEE are glad to see EVs getting more attention, clean diesel is itself an advanced energy technology, VW emissions scandal notwithstanding. Clean diesel technology has made vast improvements in heavy duty vehicles, and there’s still no reason to think the failings of clean diesel go beyond VW’s version. 

That said, as we noted in Advanced Energy Now 2016 Market Report, the clean diesel industry is facing an identity challenge, even as 2015 was a very strong year, with revenue up 18% globally to $288.1 billion. What will VW Dieselgate mean for the clean diesel market overall? We will be tracking it for next year’s Advanced Energy Now 2017 Market Report. Watch for it in March.

Meanwhile, in the world of solar energy, the price of generating power with solar panels continues to fall. According to SEIA and GTM Research, the falling prices (see graph below) are encouraging more consumers to go solar, which is raising issues for utilities and regulators.


Hawaii, a state with perpetual sunshine and high electricity prices, is a prime candidate for distributed generation. Last October, the Hawaii PUC ended its original net metering program for all new rooftop solar customers, replacing it with two new tariffs, called the “grid-supply” and “self-supply” options (further explanation of those terms here, but in short, “self-supply” requires a home energy storage system to capture, rather than feed to the grid, excess generation). These new programs may have led to a “squeeze,” according to Utility Dive: solar installers began downsizing, causing a backlog of interconnection applications, and consumers began to bump into caps of the more popular “grid-supply” option as early as May. In August, it was official. The caps had been hit, and solar companies began to pressure regulators to raise the limits.  

So what’s next for Hawaii? Right now, several options are on the table. Regulators could raise caps, the solar installers could face a not-so-sunny future, or home-based energy storage units could become more popular… pronto. In the meantime, Hawaii is turning to demand response to help manage its already robust advanced energy portfolio.

All the way north and all the way east, Maine is also considering changing the way it treats rooftop solar. The Maine PUC is looking into phasing out the state’s net metering policy over the next 15 years. This is a kinder and gentler version of the Gov. LePage’s plan, proposed this summer, which would end the program with a three-year grandfathering period (as opposed to the current proposal’s 10-year timeframe). In May, the Governor also vetoed a bill that would have replaced retail rate net metering with a market-based incentive program.

And then back south and west, Nevada continues to try to find a solution to their net metering issues. As we mentioned in yesterday’s Top 10 Utility Commission Issues of 2016 (So Far), on Thursday a Carson City district judge overturned the new net metering rates for existing customers, which made no provision for grandfathering, saying the charges were a “denial of fairness and due process through inadequate notice.” The court decision may be appealed to the state Supreme Court, but a Commission decision on the settlement (arriving as soon as the end of the month; a hearing is set for September 19) may ultimately put the issue to rest.

The net-metering issue seems tailor-made to set utilities against solar installers, but it doesn’t have to be that way. In New York, as part of the ongoing REV proceeding, AEE Institute was instrumental in facilitating a compromise proposal filed jointly by the state’s utilities and three AEE member solar companies, which is now being considered as part of a successor-to-net-metering proceeding. Read more about that here.

There’s no question that the solar industry itself is at a transition point. Setting aside the issue of net-metering, better mapping, better panel efficiency, and better data are changing an industry that, to be fair, is no stranger to change.

Fortune Magazine’s Katie Fehrenbacher reports that software and, more specifically, machine learning and big data, are more and more becoming the driving force of lowering the cost of solar. As you can see in the graph above, the cost of solar, while still dropping, isn’t falling at quite the same rate it once was, as economies of scale reach an equilibrium and supply chains get firmed up. If big data can kick start another drop in prices, and we get all this policy stuff figured out here on earth, the future of energy from the sun could be so bright, well, we’ll have to wear shades.

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