When the District of Columbia develops clean energy programs, it has to handle many types of buildings – including commercial and multifamily properties of various sizes. In this interview, Anmol Vanamali, director of financing strategies at District of Columbia Sustainable Energy Utility (DCSEU), outlines the approach stakeholders have taken to face this complex set of challenges.
CEFF: How would you describe the solar-energy market's current successes and challenges in the District of Columbia?
Vanamali: The solar-energy market in the District of Columbia is driven by a combination of legislative requirements and regulatory incentives.
The Renewable Portfolio Standard, along with the Alternative Compliance Payment (ACP) mechanism and the Solar Renewable Energy Certificate (SRECs), has provided the impetus for the creation of solar-energy generation – mostly photovoltaics – in the District of Columbia.
These regulatory and legislative elements, combined with the progressive bent of energy consumers in the District of Columbia – residential and otherwise – mean that the District of Columbia is poised to be one of the most successful markets for solar energy in the long term.
However, the path to long-term success is not without its challenges. For one thing, with this being a dense urban environment, all the installed capacity within the District of Columbia is behind-the-meter distributed generation that is not utility-scale. This prevents achieving economies of scale for both hard and soft costs.
The dense urban environment also means that most of the existing and potential installed capacity is limited to rooftop solar and peripheral structures like parking lots.
In addition, the District of Columbia is a very profitable real estate market for existing properties and new developments. It is experiencing high growth.
This means that real-estate owners and investors are not necessarily focused on capitalizing on the solar potential of their properties to meet their return expectations.
Thus, in spite of the fact that the economics of solar energy in the District of Columbia are some of the most attractive in the nation, that by itself has not been sufficient to mobilize many of the owners of large real estate portfolios in the area to install solar on their roofs.
Another concern that is widely shared is about equal access to affordable solar energy for building occupants that lack adequate and/or appropriate rooftop space or do not control their roofs – like renters.
This has led to a highly unequal distribution of solar-energy access both in terms of geography and demographics.
CEFF: What is your perspective on the energy efficiency market's successes and challenges at this time in the District of Columbia?
Vanamali: As with the solar market, the energy efficiency market in the District of Columbia is shaped by a combination of legislative actions, regulatory mandates, and conscious consumerism.
The DC Sustainable Energy Utility (DCSEU), which was created by the Clean and Affordable Energy Act in 2008, is the primary institutional driver of increasing energy efficiency across all buildings in the District of Columbia.
Using funding from electricity and gas ratepayers in the District of Columbia, the DCSEU uses rebates, technical assistance, and customer outreach to ensure that all energy users in the District of Columbia are maximizing their energy efficiency potential.
The DCSEU is one of the only programs in the nation that combines social-equity goals, including green-job creation, local-economy development, and low-income [programs] together with energy-performance goals.
The DCSEU also leverages in funds and resources to increase the impact of its work including providing customers access to financing, seeking out grant and corporate funding opportunities, and securing sponsorships and partnerships.
A big challenge that the DCSEU faces in further increasing the impact of the work is that it does not receive comparable funding when compared to some of its peers across the country.
The ramification of this disparity is that most of the efforts get channeled toward larger buildings where the scale of energy savings justifies a higher proportion of rebates and technical assistance to meet the DCSEU’s ambitious annual performance goals.
Consequently, there are plenty of small to mid-size buildings, residential or otherwise, that cannot access the level of financial and technical assistance that they need to become more energy-efficient.
In addition, publicly subsidized affordable multi-family buildings in the District of Columbia face regulatory impediments that prevent their owners and operators from benefiting financially by increasing efficiency.
When it comes to apartment buildings, renters typically do not pay their own energy bills and therefore do not have any incentive to make cost-saving energy efficiency improvements to their homes.
CEFF: What stakeholder decisions would catalyze forward movement in these two markets in the District of Columbia?
Vanamali: There are a few business and regulatory opportunities that can help overcome some of the barriers mentioned above and catalyze forward movement.
For instance, as shared solar business models like community solar mature, they’ll increasingly be leveraged by real estate owners who are looking to contribute to energy-justice goals by sharing the value of their energy output with the underserved market participants.
However, there are cost- and time-related uncertainties related to permitting and interconnection that have prevented the development of such models.
Stakeholders who have a say in these processes hold the key in ensuring that such impediments are removed and that the full potential of community solar in the District of Columbia is achieved.
Similarly, as the city government goes about adopting even more ambitious energy goals through legislation and regulation, striving to achieve a balance between new programs/entities and strengthening existing ones could go a long way.
Striking a balance between providing stability and growth to existing the District of Columbia programs and businesses in energy efficiency and renewable energy while also keeping an eye out for the next wave of regulatory, technological and financial innovation is important.
Note: Emma McDonald contributed research to this article.