by Sara Baldwin Auck
Director IREC Regulatory Program
For the average American navigating the full and busy landscape of everyday consumer decisions, bills, family life, education, job responsibilities, March Madness brackets, community engagement, and other to-dos, energy-related decisions are often relegated to the bottom of the list. For those struggling to make ends meet, other competing priorities tend to take precedence. Yet, consumers are at the epicenter of today’s energy policy conversations, and the energy choices we all make today are informing the investments, infrastructure plans, business models, and policy decisions of tomorrow.
Behind the everyday consumer energy experience, there exists a world of state- and utility- policy wonkery that is not often easily or meaningfully translated. Layer on the decisions made at the national and global levels, and the cumulative effect can be quite dizzying, not to mention extremely difficult to navigate from a consumer choice standpoint. As IREC works on clean energy policy and workforce efforts in states across the country, we keep the consumer focus front and center, bringing an important independent voice to the table. And from this vantage point, we’ve identified some key consumer-oriented trends that we expect to garner heightened attention going forward.
Consumer Confidence is Built with Tools
As consumers face a new landscape of energy options, they stand to benefit from a simple and clear set of navigational tools. A changing field of rate structures, technologies, utility and third-party program and product offerings, and new business models beckon the need for enhanced understanding of what it all means – not just for the pocket book, but for the longevity and quality of investments. With confidence and tools comes a more informed and empowered consumer.
New resources are emerging to help inform both consumers and policymakers as they navigate clean energy decisions: IREC’s newly released trio of consumer protection resources (Clean Energy Consumer Bill of Rights, Be Solar Smart Consumer Checklist and Resources links) provide a much-needed foundation to inform decision-making. SEIA’s Solar Business Code of Ethics offer complementary resources for its industry members. Balanced with the issue of consumer protections is the need to mitigate overly onerous requirements that might impose burdensome requirements and unnecessary costs.
Building a more distributed and less-centralized electricity grid will require more active and engaged consumers, and consumers calling for clean energy may need to give more proactive consideration to their role in such a future energy system.
The New York Reforming the Energy Vision (REV) proceeding has taken a deep dive to identify the various consumer roles in the grid of the future: the traditional consumer, the active consumer, and the prosumer. Through the REV, New York regulators are working to identify what economic signals and other external motivations might be necessary to ensure consumer-oriented distributed energy resources and investments can be counted upon to provide grid services and enable a more distributed energy grid. As it relates to some of the practical implications of creating new consumer categories, key questions are emerging that will impact the development of new rate structures, incentives, programs, and business models.
At a time when consumer energy choices, motivations, and investments are central to so many state regulatory discussions, the consumer perspective must be taken carefully into account.
Sharing Economy is Here to Stay – for All
Along similar trend lines, there will be a continued emphasis in state and community policy discussions on how to expand access to clean energy for all consumers, including low- to moderate-income consumers. The transformative impact of businesses like Uber, AirB&B and Kickstarter has demonstrated that the sharing economy is here to stay and is reshaping traditional business models and consumer habits. In many ways, shared renewable energy policies and programs are having a similarly transformative impact on clean energy markets. As programs and policies continue to crop up across the country, the outlook for this still-nascent market sector remains promising, with expectations for sevenfold growth in cumulative community solar installations by the end of 2016.
But, making sure these programs are designed and developed with all consumers in mind is the key to achieving the promise and huge potential of this sector to reach more people. IREC’s recent report, Shared Renewable Energy Programs for Low- to Moderate-Income Customers: Policy Guidelines and Model Provisions provides a comprehensive overview of the barriers to participation faced by LMI customers and offers recommendations to ensure shared renewable energy programs meaningfully serve these customers going forward. A complementary Low-Income Policy toolkit by Vote Solar, Grid Alternatives, and the Center for Social Inclusion provide additional helpful resources. resources. With more tools in hand, we anticipate a greater attention to programs and policies designed to serve all consumers.
Transparency is Trending
As distributed energy resources and consumer-driven investments continue to grow, enhanced grid transparency and the ease of access to distribution system information are both key to unlocking the full range of benefits of these resources. Locating distributed energy technologies more strategically on the grid requires greater visibility into the grid itself. Customers able to ascertain details about the distribution system at a particular point of interconnection can both design their systems optimally prior to beginning the interconnection process, while also avoiding locations that would likely involve costly upgrades. Utilities processing these requests can also save time, energy, and resources by appropriately limiting the execution of time-intensive studies and review of dead-end applications. Much like a Google map at rush-hour, there is tremendous value to being able to see where there are bottlenecks and avoid areas of congestion.
Leading states and utilities are attempting to better map and analyze the grid to improve planning processes, such that the deployment of higher penetrations of distributed energy resources can be integrated into system planning and investments – thus potentially yielding more cost-effective grid infrastructure investments that benefit all ratepayers. California’s Distribution Resources Plans and Integrated Distributed Energy Resources proceedings and New York’s Distributed System Implementation Plans are taking a deep dive on these concepts. As we see more states and utilities tackle similar efforts, expect the issue of grid transparency and locational benefits of distributed energy resources to be front and center. Keep an eye on Colorado, Connecticut, Hawaii, Maryland, New Hampshire, Washington DC, and Washington state, among others, as they each make moves on this front.
Data and Data Security
With discussions on transparency comes a need to address data access (and data security). The opportunity to acquire and analyze distribution system level and grid data, as well as consumer and behavior data, is the future. The internet and smart devices have paved the way, and we have tools at our fingertips to transform the way we operate our daily lives and conduct business.
The potential for a more intelligent and interactive grid (with consumers and smart technologies playing more active roles) is tremendous. However, the prospects of such a technological revolution on a centuries-old and outdated system is not without its challenges or much debate. What we’ve learned from the various ‘smart grid’ initiatives and advanced metering infrastructure investments made to date is that it really isn’t enough to have the data, we have to know how to use it. We also have to address who has access to it, who can use it, and how its availability will impact grid security and privacy issues.
Consumers will have to determine their level of comfort with utilities, renewables developers, and policymakers accessing and utilizing their energy data to develop more informed programs, rates, and policies that better reflect the realities of their habits, behaviors, tendencies and capabilities. This includes their data not just as energy consumers, but as proactive and productive energy producers. Undoubtedly a critical issue, and one we expect to see more states ruminate on in the coming years.
Mind the Gap
As we continue the transition towards more clean energy, more states will experience a jump in consumer-driven distributed energy resources. As those jumps occur, states should be sure to “mind the gap.” That is, the gap that exists between existing policies and the rate of market change.
One policy, in particular, continues to emerge as a limiting factor for streamlined growth of both distributed energy resources and renewable energy alike: interconnection standards. The reality is that the processes and protocols associated with connecting to the grid continue to prove challenging for many states. Efforts to evaluate interconnection processes in New York, Minnesota, Illinois, Iowa, California, South Carolina, North Carolina and others continue to demonstrate the need for well-established national best practices for interconnection. And, as the market for energy storage continues to grow, it too will need a glide-path to connect to the grid. Without one, the storage market will inevitably fail to meet its full potential. We look forward to a forthcoming decision in California on the interconnection of energy storage systems that will hopefully help pave the way for other states as they evaluate this important issue.
As consumers and policymakers seek to navigate the multifold issues before them, expect there to be some spirited conversations and game-changing decisions to come.
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