Solar Electrical Power Association

In 2007, the U.S. installed approximately 150 megawatts of solar photovoltaic power—a 45 percent increase compared with 2006 and a testament to the power of green-building rating systems, tax credits and other renewable-energy incentives. In the same year, however, Germany far outpaced the U.S. in terms of solar production, installing more than 1,000 MW of solar PV despite having only one-quarter of our country’s population. Last summer, representatives from more than 30 U.S. utilities traveled to Germany to learn the secret to the country’s success and, more importantly, how those lessons could be applied in the U.S. Sponsored by the Washington, D.C.-based Solar Electric Power Association, the U.S. utility managers spent a week last June meeting with German utilities and manufacturers. They visited several solar installations, including a 1.8 MW rooftop system, and attended the Intersolar trade show. According to SEPA Executive Director Julia Hamm, the goal of the mission, which was cosponsored by the Northwest Solar Center, Shoreline, Wash., and the Hamburg, Germany-based World Futures Council, was to enlighten a diverse group of utility managers, some of whom had embraced solar energy and some of whom were skeptical of it. “All of our participants really got value from seeing how far ahead the German market is, interacting with German utilities and discussing the perceived and real technical issues with implementing large-scale solar power,” Hamm says. Participants were calling and texting their colleagues back home, she says, before the trip was even over.

Solar Electrical Power Association

THE FEED-IN TARIFF SEPA’s primary mission, according to Hamm, is not to lobby for new policies and regulations but to find ways to increase collaboration and integration between electrical utilities and the solar industry. To this end, the association held a competitive application process for the Germany trip, ultimately choosing 31 utilities that could send delegates. The utilities represent a broad cross-section of the U.S. in terms of geography and access to solar power. “Every utility representative was on a different place on the learning curve,” Hamm explains. “Our goal was that, no matter where they were on that curve, we wanted to move them up. The people who knew nothing going into the experience had their eyes opened to the fact that it’s not just some rinky-dink industry with guys building things in their garage but rather that the solar industry is becoming very mature. For the utilities that already had a lot of experience, the trip was much more specific in terms of learning about program requirements and technologies.” Germany is a leader in renewable energy among its European neighbors and around the world, generating about 14 percent of its electricity from renewable sources, such as solar and wind power, and creating more than 200,000 new jobs in the renewables industry, according to SEPA. The underpinning of Germany’s success is its feed-in tariff, which was implemented through a law requiring all German utilities to interconnect PV systems, meaning that utilities are required to allow all PV systems to connect to the distribution system and sell power into the grid. The systems themselves are owned by customers or their investors, not the utilities.

Solar Electrical Power Association

Through this program, any customer generating electricity from solar PV, wind or hydro power receives a guaranteed payment of four times the market rate—currently between 45 and 60 euro cents per kilowatt-hour—for a guaranteed 20-year period. The cost is spread among all users, who see only a nominal increase in their electricity bills for the benefit of tapping into solar-powered electricity. Tariff rates decrease each year for new customers entering the program. Critics of feed-in tariffs have concerns, however, about raising electric rates for customers and the high relative price of solar PV technology versus other renewables, such as wind power. “Coming into the trip, most of the utility reps had a fairly negative assessment of feed-in tariffs,” Hamm says. “After the trip, while some said, ‘I still don’t like it,’ most wanted to learn more about it.” One of those people was Ed Regan, assistant general manager for strategic planning for Gainesville Regional Utilities in Florida. The municipality long had been committed to promoting solar power through net metering, a common practice in which PV consumers sell their excess solar power back to the utility. Yet, the utility was running into logistical and institutional roadblocks to boosting its solar integration. After attending the SEPA meeting, Regan was convinced that feed-in tariffs would promote more solar energy production in an efficient and seamless way while increasing a renewable source of domestic power. “In Germany, it hit me like a ton of bricks,” Regan recalls. “I realized this is not just about replacement energy; this is about energy security and economic development.” The Gainesville City Commission was quickly convinced, as well, and at press time, the city was set to launch the nation’s first municipalitywide solar PV feed-in-tariff program on March 1. Under the Gainesville ordinance, GRU purchases solar energy from participating customers who are locked into a 20-year contract at 32 cents per kilowatt-hour, a rate much higher than the cost of power from the grid. GRU reports that its customers should expect an average increase of 42 cents per bill in 2009. To protect itself against a surge in new solar production that might make the payout for producers too costly for the utility, the Gainesville city commissioners voted to include a provision that would stop the program when the surcharges on electric bills reach 1 percent.

Solar Electrical Power Association


Another important aspect of the Germany trip, according to SEPA, was to examine any logistical and regulatory issues related to integrating PV into the existing power grid. More than 90 percent of solar PV operations in Germany are tied into the grid (the U.S. enjoys a similar percentage of existing PV operations tied into the grid but has far less existing systems). Meetings with investor-owned and municipal utilities in Germany revealed that even with a high percentage of solar in the power grid—usually 20 percent but as high as 30 percent in some parts of the country— grid-integration issues have not been a problem. Part of the reason for this is that Germany has clear nationwide rules about what is required of the utilities. These rules eliminate potential roadblocks that exist in the U.S., such as complex and varied interconnection agreements. During the trip, the participants toured a 1.8 MW PV display; thin-film solar technology from Tempe, Ariz.-based First Solar is installed on the roof of a tire distribution center. According to SEPA, the U.S. representatives quickly realized that a nearly 2-MW rooftop system is doable, as long as the roof space is available, and that it is not always necessary to penetrate the roof structure to install a PV system. In this case, the system was held down with concrete blocks. Currently, dozens of states and municipalities are considering feed-in tariffs or other similar programs to enhance solar production and PV installation, a trend that will have far-reaching impacts in the green-building industry. The Los Angeles Department of Water and Power, for example, has been charged by the office of Mayor Antonio Villaraigosa with building or purchasing 1,300 MW of solar energy by 2020, including a plan for a feed-in tariff for 150 MW of solar PV by 2016. SEPA, for its part, is already planning another trip this summer to Spain, where a feed-in tariff has boosted that nation’s solar production. “I’d like to think that the individuals who went on the Germany trip have become ambassadors for solar energy,” Hamm says. “Although every industry is slowing down right now, we think it’s a shortterm issue and this industry is going to continue to grow. There’s no doubt about that.”


Solar Electric Power Association, Washington, D.C.,

Northwest Solar Center, Shoreline, Wash.,

World Future Council, Hamburg, Germany,

KIM A. O’CONNELL writes about architecture and sustainability from Arlington, Va.