Image Source: https://ilsr.org/
In late 2020, the Minnesota Public Utilities Commission asked the state’s electric and gas utilities to discuss what infrastructure projects they had in queue that could be accelerated to support the COVID-battered economy. Tucked into a proposal from Xcel Energy, the state’s largest electric company, was a comparison of two proposed solar projects: one, a giant solar array on the site of a closing coal plant; the other, a small collection of rooftop solar projects to serve low-income residents. In a nondescript table was a bombshell revelation about the relative economic benefits of solar at small scale: for every million the utility proposed spending on rooftop solar, it would create 30 times more jobs than $1 million spent on utility-scale solar.
For every million the utility proposed spending on rooftop solar, it would create 30 times more jobs than $1 million spent on utility-scale solar.
Utilities often and erroneously compare the costs of large and small solar to generate electricity, leaving out the delivery costs not including the the cost of large projects (and that small projects don’t pay). Rather, large-scale solar competes with other large-scale power production, and small-scale with other sources that deliver right to the door (or meter) of our homes and businesses. Both types of solar are competitive. As Minnesota’s value of solar calculation shows, the value of locally-produced power is actually very similar to the retail electricity price. And as shown in a recent grid model from Vibrant Clean Energy, large-scale wind and solar are the most cost-effective new electricity sources compared to other big power generation just about anywhere.
If it’s not the price that matters in choosing large or small, then the economic impacts matter much more. This tidbit suggests that the more money we invest in small-scale solar, the much larger economic multipliers we’ll see across the economy. It squares with the 30 Million Solar Homes campaign that ILSR co-leads, which has (preliminarily) found that an investment in solar for 1 in 4 American households could great $30 billion per year in energy bill savings, create over 1.7 million jobs, and shift more than 5 percent of total electricity use to the sun.
We discuss other factors for public regulators to consider in the utility’s pandemic filing in our full comments below, but it’s clear that a focus on distributed solar can deliver a much bigger economic boost than letting the utility centralized power production, and at a competitive price as well.