Saving energy and money is popular in Idaho. But distributed generation policy has been a sticking point for the state’s solar market lately. This has included controversies related to utility-scale solar and net metering costs, said Benjamin Otto, energy associate at Idaho Conservation League. Some of these negotiations have gone well, he said in this interview. Meanwhile, energy efficiency has continued to have steady support in the state.
CEFF: How would you describe the solar-energy market's current successes and challenges in Idaho?
Otto: The solar market is Idaho, particularly the populated Treasure Valley, grew rapidly in the last two years and is poised for continued expansion. The drivers of this success are Idaho’s abundant sunshine and relatively low development costs. Also, it appeals to Idahoans’ independent streak to meeting their own energy needs onsite.
The challenges for both distributed and utility-scale solar are a lack of supportive state and utility policy.
For the distributed-energy side of the market, Idaho's major utility, Idaho Power, recently got Idaho Public Utility Commission (IPUC) approval to segregate distributed-energy owners.
While this segregation did not include any changes to electric rates, the utilities’ arguments included the usual allegations of solar allowing customers to avoid paying their fair share and causing an unfair cost shift to non-solar customers.
Fortunately, the IPUC did not accept the utility allegations. It ordered stakeholders into a process to calculate the full range of costs and benefits distributed customer-owned generation brings to the system.
For the utility-scale side of the market, the major policy driver for the roughly 300 MW of installed solar in Idaho is the federal PURPA law.
Two years ago, the IPUC effectively chilled that portion of the market by limiting power-purchase agreements from the previous term of 20 years to only 2 years.
This policy change eliminated Idaho’s then-growing independent solar sector. Now, the growth of utility-scale solar will depend causing the utility to elect to build solar as part of the resource-planning process.
CEFF: What is your perspective on the energy efficiency market's successes and challenges at this time in Idaho?
Otto: Idaho has a strong track record of energy efficiency policy support and accomplishments. The IPUC approved rate riders to fund conservation in the early 2000s and a decoupling mechanism for Idaho Power in 2007.
Recently, the IPUC ordered the natural gas provider, Intermountain Gas Company, to initiate new energy conservation programs. Idaho’s utilities all have a full suite of efficiency programs and incentives that covers the range of customer types.
My observation is that the success of efficiency here is based on connecting to Idahoans values of thrift. Major energy users in the industrial and irrigation sectors recognize that conservation is cost-effective.
This support is the foundation for the IPUC’s directive for utilities to pursue all cost-effective energy efficiency.
Idaho’s utilities set annual efficiency goals as part of their long-term resource plans. They always exceed these goals in practice. The combination of values-based and cost-based policy along with a track record of success has engrained efficiency as the highlight of Idaho energy policy.
The primary challenge to efficiency in Idaho is twofold. First, with low electric rates, the potential for cost-effective energy efficiency is smaller than it is in places with more expensive energy.
Idaho’s policy framework is founded on programs and incentives being justified on a strict cost-and-benefit analysis instead of a policy goal to acquire a certain amount of energy savings.
Second, consumers do not demand efficiency as a primary attribute of their homes or products.
Solar and other renewables benefit from the “shiny-object effect” – the consumer gets an obvious thing to point to.
Efficiency, in the form of insulated walls and different light bulbs, is not obvious, so consumers don’t perceive as much value from efficiency measures.
CEFF: What stakeholder decisions would catalyze forward movement in these two markets in Idaho?
Otto: Idaho does not have a focused, statewide energy policy that identifies priority resources and polices to acquire these.
Currently, Idaho imports between 40 and 60 percent of our electricity and 100 percent of our transportation fuels.
A stakeholder decision to create a focused statewide energy policy focused on increasing Idaho’s energy independence would benefit the markets for both solar and efficiency.
Idaho’s consumers understand solar and efficiency are ways to invest locally to meet your needs – a common Idaho value. Idaho’s policymakers and utilities see solar and efficiency as a problem – independently-owned solar undercuts the utilities’ justification to build plants and efficiency causes the utility to reduce electric sales.
This disconnect between consumers and policymakers is holding back the marketplace.
By creating a common goal that investing in efficiency and solar aligns with Idaho values and therefore is a solution for utility desire to meet their customer’s expectations we can win policy changes that will unlock forth market growth.
Deciding to reduce Idaho’s 100 percent reliance on out-of-state transportation fuels would create tremendous market potential.
Idaho doesn’t have fossil fuels within our borders.
So electrifying transportation would create massive demand for new solar, an abundant resource in Idaho. And further energy savings from efficiency would free up Idaho’s low-cost generation for fueling vehicles, thereby potentially increasing the potential for cost-effective efficiency programs.
Note: Emma McDonald contributed research to this article.