The Benefits of Distributed Generation: Why Locally Produced Solar Power is Good for Communities

Posted on May 28th, 2013 by
   

When it comes to solar power generation, there are different viewpoints on which is better: “utility-scale” solar, which produces large amounts of solar energy with huge installations in remote locations, or small, local rooftop installations that produce enough energy to power the building on which they’re installed (or maybe slightly more). While debates continue about costs and benefits to ratepayers, utilities, and the grid, some authorities hesitate to include the benefits of rooftop solar to the local community on the grounds that they are “unquantifiable,” so I’d like to add those to the discussion.

I use the term “Distributed Generation” to refer to the solar energy generated by users themselves, typically on-site, whether grid-tied or locally stored. The chief benefit of distributed generation is, of course, harnessing the clean, renewable energy of the sun to supply our country’s ever-growing need for electricity at a local level.

In addition to being good for the environment, there are other benefits for communities when solar installations appear on neighborhood rooftops, parking lots and shade structures:

1.      Employing Local Tradespeople

When you create markets close to homes and businesses, the people who design and install those projects tend to live within a local radius. It’s most cost-effective to employ local solar installers and technicians to do a local job. These skilled workers include roofers, electricians and plumbers (for solar water heating projects). On the flipside, large-scale installations import technicians from all over the country to remote locations, which produces a much more short-term impact on employment.

2.      Creating Small Businesses

Local solar installations encourage the creation of small businesses and the good jobs that come with them — including presidents, CFOs, accountants, marketing and sales professionals, in addition to engineers and installers. These are quality jobs that employ taxpaying members of our communities. According to the Solar Foundation’s 2012 National Solar Jobs Census report, the U.S. solar industry enjoyed a 13.2 percent employment growth rate over the past 12 months, and more than 90 percent of solar installers in the U.S. are in the residential, commercial, and industrial markets,[1] a strong testament to the job growth that results from locally installed solar power.

3.      Supporting Local Financial Markets

With local credit unions now starting to finance solar electric installations, users gain new opportunities to put their money to work in their own communities. When a local bank is involved in local projects, the money stays nearby. When a national or international bank provides capital, this may not be the case. In addition, the deployment of small rooftop projects encourages homeowners and businesses to invest in their own communities.

4.      Reducing Energy Imports

Electricity flows on the path of least resistance: if solar panels on your rooftop create energy and the house next door needs it, that’s where it goes. It doesn’t get on the electricity superhighway and travel hundreds of miles — it’s consumed almost exactly where it’s produced. When there is a lower importation of energy into a community, that community is more self-sustaining. It lowers the impact on existing transmission lines, and may avoid the need to intrude into the environment to build additional lines. This is good for both the local landscape and a community’s bottom line. This helps communities become less dependent on imports and fossil fuels. The savings in highly populated states can amount to hundreds of millions of dollars annually.

5.      Increasing Tax Revenues

A community benefits from the uptick in sales revenue, payroll taxes and the profit taxes paid by small businesses. Taxes support local schools, roads, police and firefighters, and other crucial services. This is an added benefit to the community that is rarely discussed.

One concern expressed by utility companies and policy makers is the intermittent nature of renewable energy — especially solar energy during cloudy or rainy days. There are already solutions coming out in the market dealing with energy storage and increased energy efficiency to address this issue, including Kyocera’s new Home Energy Management System, which is already on the market in Japan, and can also function as an emergency power supply in case of natural disasters or blackouts.

The bottom line is:  rooftop solar installations create a substantial number of proven benefits and a healthy return on investment. Large “utility-scale” solar installations are often built far away from the localities where the energy will be used.  While utility-scale PV is often touted as being cheaper per kilowatt hour than small installations, there are many hidden costs, including the transmission of energy over many miles, which results in a loss of about 7% of the energy generated, according to the U.S. Energy Information Administration[2]. In addition, the local community doesn’t always benefit from the added jobs and economic development from utility-scale installations that solar rooftops can bring.

Distributed generation is becoming a hot-button topic between solar manufacturers, installers and utility companies, with each presenting different points of view. Both distributed and utility-scale solar generation have a necessary place in our energy future — and any argument suggesting that one should be pursued in place of the other is flawed.  Both are priceless.

I am not saying that only small, distributed generation should be supported, as I believe that a portfolio of technologies including wind, biomass, geothermal, and solar should be pursued in whatever scale may be feasible. Within this mix, however, the many benefits of small, distributed renewable energy must not be ignored, and should remain an important part of any policy that tries to promote clean energy and economic development at the same time.


[2] http://www.eia.gov/tools/faqs/faq.cfm?id=105&t=3

 

“The opinions expressed in this article are solely those of the author Cecilia Aguillon, Kyocera Solar, Inc. Cecilia Aguillon is director of market development and government policy for Kyocera Solar, Inc., recognized as a world-leading supplier of solar electric energy products since 1975.”

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2 People have left comments on this post



» Benefits of solar power said: { Jun 26, 2013 - 09:06:26 }

With an increase in the spread of information about the benefits of solar power , small and medium scale industries are now in favor of installing a solar power system to generate energy.

» Michal Bacia said: { Jun 27, 2013 - 10:06:32 }

Nice article. I would even say that some points are not stressed enough. Distributed generation is absolutely crucial for sustainable development. Imported energy is a permanent liability for a local and national economy. Ones we’ve estimated that LA county for example spends approx. 9 billion (!) dollars each year (!) on imported oil. This is a value produced by the local economy and does not re-circulate, does not create more local job, local wealth. Local energy means value added stays within local economy. This has a positive effect on jobs, taxes etc and provides stability. Local economy is not impacted anymore by global markets. Yes, own energy generation is essential for economic sovereignty. Go solar, drive electric! Not for the environment, do it for the money ;-)



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