Colorado Policy and Solar Power

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In 1916, the relatively young American oil industry received a helpful boost from the federal government. Spurred on by a need for more domestic oil and gas production, representatives introduced legislation that allowed companies to fully deduct “intangible drilling costs”, or IDCs, greatly reducing the expenses of drilling.

Today, the oil and gas industries still receive these same benefits, despite having grown to become leading energy producers in the country. In 2010, the International Energy Agency reported that oil company subsidies totaled $4.5 billion for the year.

So, despite claims from outside interest groups that solar energy must stand on its own in the free market to succeed, the fact is that government subsidies are not new ideas created solely for the benefit of renewable energy development.

Many Colorado legislators and their constituents understand the positive effects that strong policies have on the solar energy industry, helping it to grow and expand. By creating a favorable business climate in the state, Colorado politicians are helping to even the playing field, allowing solar to compete with coal, oil, and natural gas.

Leading the country toward a brighter future

In 2004, Colorado became the first state to create a Renewable Portfolio Standard (RPS) by ballot initiative. An RPS essentially requires utilities to provide a certain percentage of their energy from renewable sources – like solar power.

Initially, the RPS required that utilities serving over 40,000 people provide just 10% of their sales from renewable energy by 2015, but that figure has since been raised three times. Today, utilities must reach 30% of their retail sales from renewable energy by 2020.

Does that seem like an unrealistic number to reach? Consider that Xcel Energy, the largest electricity provider in Colorado, is on track to reach that goal in 2013 – seven years ahead of schedule.

Potential of Renewable Portfolio Standard Policies

According to the Solar Energy Industries Association, RPS policies are some of the largest drivers of solar growth in the country. Consider some of the following facts:

  • In mid-Atlantic states and New York, 23% of new solar installations have been attributed to RPS policies.
  • If full RPS compliance is achieved in 2035, there will be 93 GW of new renewable energy online throughout the country.
  • Solar installation prices have steadily fallen since the introduction of RPS policies, with Colorado reaching costs of $4.00/watt.
  • From 2005 to 2009, 60%-81% of grid-connected solar systems in the US, excluding California, were installed in states with RPS policies.

Source: Solar Energy Industries Association

Many criticisms of the RPS have yet to materialize. Oil and gas producers initially cried foul, claiming that forcing utilities to provide renewable energy would raise electricity rates on consumers. However, more affordable solar energy technologies and greater conversion efficiencies mean the costs of solar are lower than ever before.

According to a study from IHS Emerging Energy Research, state RPS programs are the most critical drivers of renewable energy growth in the country. Renewable portfolio standards not only increase demand by encouraging the use of renewable technologies, but also spur investment in the field, ultimately driving down costs.

IHS Emerging Energy Research examined 31 states that have enacted RPS policies, and found that demand for renewable energy sources has grown exponentially thanks to these policies. Researchers note that demand for renewable energy throughout these states will likely grow to 471 TWh by 2025 – a 300% increase from 2009.

Colorado’s renewable energy policies – particularly the RPS – have enabled it to become a solar energy leader in the country. According to the Solar Energy Industries Association, of the 3,313 MW of solar installed in 2012, Colorado contributed 69.9 MW – bringing its total to 270 MW.

In part, this accelerated growth also involves the many financial incentives for solar that typically form in the political arena. For example, Colorado’s popular Net Metering program was voted on by the Colorado legislature in 2008, and has seen several popular revisions.

Despite the popularity of such programs, some would rather see coal, oil, and gas industries continue to dominate the energy landscape. In 2011, members of the Colorado House voted to deny a simple, privately funded study of a Feed-in Tariff policy’s potential effects on the state. Feed-in Tariff policies are somewhat similar to net metering policies, but have had huge impacts in countries like Germany, which has since led the world in solar installations.

Opposition to Solar Policies in Colorado

Some of Colorado’s politicians and special interest groups don’t share the promising vision of a bright solar energy future – and fight progress each step of the way.

In April of 2013, the Colorado state senate and house passed a bill that would increase RPS requirements for electricity coops to 20%. Before this push, standards for these groups were locked in at the 10% level established by the first bill’s passing in 2004.

Almost immediately upon its introduction, lawmakers and utilities like Tri-State spoke out against it, claiming billions in costs would be pushed on consumers. However, specific wording in the bill limits consumer rate hikes to pay for renewables to 2%, meaning any increase in rates would be minor.

Jean Basset, senior associate for Environment Colorado, notes that when initial RPS policies were put into place for electricity coops in 2004, many of the same claims were made.

“Tri-State is saying the exact same thing they said in 2004, which is that it would cost billions of dollars and they can’t do it,” Bassett said. “So, they’re just reading from the same playbook of 10 years ago.”

Those policies failed to raise electricity prices for consumers by a noticeable amount in 2004, suggesting other reasons why some lawmakers and companies are against the measure.

When examining the opposition to these policies, it’s important to understand that many lawmakers have monetary backing from organizations that would be hurt by renewable energy use.

For example, District 8 Senator Randy Baumgarder of Cowdrey, CO voiced strong opposition to the new bill. According to records from the National Institute on Money in State Politics, Cowdrey received more money from Oil and Gas industry sources than from any other industry during his campaigns.

Such industries would hardly benefit from more stringent renewable energy standards, compelling them to donate money to politicians who would oppose them.

The state’s RPS policy puts Colorado on track to become a leading green job creator and energy producer in the United States. By supporting politicians who understand this reality – and opposing the ones who don’t -- Colorado residents can continue to ensure that the costs of solar energy drop while use increases.

Tackling solar opposition in Colorado

Even in the face of opposition, the solar energy industry is making strides thanks to grassroots activism and supportive politicians. These groups ensure policies that drive the costs of solar down remain in place, increasing access to solar technologies.

However, despite decreasing costs, many do not yet have the resources to install solar panels on their homes or businesses. While solar technologies are more affordable than ever, speculation about the stability of solar policies makes many people cautious when considering solar energy.

One way to ensure solar policies in Colorado remain stable for the foreseeable future is to get involved with the many statewide organizations advocating for solar. Such organizations carry a louder voice in the solar conversation, allowing you to more easily communicate causes to politicians.

Consider that much of Colorado’s current solar policy began from grassroots campaigning. The state’s much lauded RPS policy – then known as Prop 37 -- gained traction when campaigners at Environment Colorado collected enough signatures to put the measure on the 2004 state ballot.

Even if you decide that now isn’t the right time to install solar panels, it’s important to understand the wide range of positive effects that solar energy has on the Colorado economy and environment. By contacting local solar advocates and keeping up-to-date on political discussions, you can make a difference for the solar energy industry through smart voting and public demand.

Most recently, the Colorado Solar Energy Industries Association and Environment Colorado have undertaken the “Million Solar Roofs Campaign” designed to pressure Governor John Hickenlooper to support more positive solar policies.

If you’re interested in helping solar energy policies remain strong, contact some of the following organizations currently campaigning for solar in Colorado.

Without citizen support, politicians will increasingly favor special interest groups who reap monetary rewards from drilling and other damaging practices. Take action to protect Colorado’s environment and help the fledgling solar industry transform into one of Colorado’s leading economic powerhouses.

Becoming a solar advocate

Solar energy policies in Colorado have helped drive down costs, meaning solar panels are less expensive than ever to install. If you’re interested in learning more about how policies can benefit you, contact solar installers in your area to receive a quote.

Furthermore, if you’re interested in ensuring that Colorado remains a solar leader in the United States, contact your representative and inform him or her about your support for solar policies in the state.