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The future looks bright for distributed PV.

Fortnightly Magazine - September 2009

Lawmakers, regulators and even public power utilities and cooperatives might be more apt to follow big-picture environmental or efficiency principles, but IOUs look primarily to the bottom line. For them, the most significant impetus toward distributed solar stations is a lot simpler, and more compelling. It’s the stark logic inherent in Moore’s Law.

“Eventually, producing your own electricity will literally cost less than having it produced by somebody else off-site, and having it shipped to you—at which point, why would you opt for centralized power?” says Borbely-Bartis.

“There’s actually an enormous business opportunity built into this, if utilities were interested in seeing it as something other than a threat,” she says. “Why shouldn’t utilities be the owner-operators of these rooftops? They would be responsible for replacing them, for any maintenance that might be required. It actually becomes a capital asset built into the rate base, as though it were a central power plant.”

A handful of utilities are doing just that.

Just Like Nuke

To comply with North Carolina’s ramping renewable energy regulations, Duke Energy formulated a two-pronged strategy. One side is a third-party-owned solar farm—traditional central generation. The other is close to the model Borbely-Bartis describes.“We think of these installations truly as mini-power plants,” says Duke spokesman Dave Scanzoni. “By that I mean, these will be Duke Energy-owned, Duke Energy-maintained, and Duke Energy-installed. It’s just like a regular coal or nuclear plant in terms of the ownership and maintenance.”

The difference is location: Duke’s solar plants will be sited on the property of utility customers. Duke will pay customers a monthly rental fee based on the size of the installation and the amount of energy generated.

The $50 million, 8-MW project was approved by the North Carolina Utilities Commission in May, and the utility currently is selecting sites. Duke will begin installing between 100 and 400 distributed solar plants on the roofs and grounds of schools, homes, shopping centers and factories this fall. The total number of plants ultimately depends on the size and location of the sites chosen.

It’s a relatively small first step, but it might be just the beginning of a long-term program: Duke expects the solar infrastructure to last 25 years.

“We think distributed generation will be a growing sector of the renewable world,” Scanzoni says. “It won’t replace base-load power plants, but it gives us another option for power production. During peak periods—when it’s in the upper 90s on summer days—that’s when the sun is most available. It complements our generation mix to have solar panels generating electricity during those hours.”

A key aspect of the program is that it doesn’t involve any net-metering relationship with site owners, which make the installations particularly attractive for Duke from a business perspective. “The power goes back into the grid just like the regular base-load model,” Scanzoni says.

Additionally, with Duke and other utilities facing the prospect of federal renewable electricity standards, distributed solar generation offers a fast way to meet regulatory requirements. However, Scanzoni says Duke sees value in the business model beyond compliance, and plans to seek