We’re witnessing the dawn of a new age of electricity in which solar and wind energy have become cost-effective, says Tyler Huebner, executive director of RENEW Wisconsin, a non-profit dedicated to accelerating the future of renewable energy in Wisconsin.
In its infancy, solar energy was viewed as a green but expensive alternative to burning carbon-emitting fossil fuels. Now, a decade later, while the environmental benefits of renewable energy remain enormous, the primary rationale for using more solar energy has become economic. Solar energy is less expensive to produce than energy produced by fossil fuel plants, which require enormous infrastructure investments upfront and ongoing purchases of fuel.
“The cost of solar has come down 75-85% in the last decade,” Huebner says. “We hear now of many homeowners getting their payback in seven to 10 years, especially in southeastern Wisconsin based on the electric rates that people pay to We Energies.” He says businesses have additional tax advantages and often get four- to seven-year paybacks. “It’s becoming quite a quick payback and a very good investment for many businesses and homeowners.”
While more home and business owners are installing solar panels, utility companies are still the biggest energy producers. They are trying to jump on the renewable train but are constrained by the large investments they have already made in coal and natural gas power plants and are trying to figure out how to pivot from higher-cost and carbon-emitting energy to low-cost renewable energy, such as solar, Huebner says.
He explains that solar and wind technologies are much less expensive to operate than fossil fuel-burning plants. For one, the utility does not have to buy coal or natural gas and facilities maintenance is much lower. Some maintenance is required on wind turbines, which have moving parts, but solar panels require much less maintenance than fossil-fuel power plants, thus less labor is involved in operating renewable energy technologies.
New Approaches Needed
Elizabeth Katt Reinders, senior campaign representative of the Sierra Club’s Beyond Coal Campaign, believes that new approaches are needed to speed utilities to transition more rapidly to solar and other forms of renewable energy.
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“We need to recognize that there is now clean energy that is cheaper, more cost-effective and is going to be the better deal for customers,” Reinders says. “We’re going to need a creative approach in this different environment and market than we had five or 10 years ago. We can’t bring the same solutions and same approach to new circumstances.”
Huebner explains that when a utility wants to build a coal plant or a natural gas plant, it has to get permission from the state Public Service Commission. Part of that process is determining how long that plant will run before recouping the cost. Some of the plants still have 20 years to go before the utility can recoup their costs. With the advent of cost-effective solar and wind energy, however, the economics of energy production have fundamentally shifted.
“I think the biggest, hardest issue is how does the utility make this transition,” Huebner says. “They’ve got to continue paying for the old plant or figure out some way to substitute or refinance old investment so that they can create the opportunity to get into new ones.”
Because they are monopolies regulated by the Public Service Commission, the utilities have to balance taking losses that hurt shareholders and also keep rates low for the customers. “We’re trying to find some creative solutions around that to make sure rates don’t go up and that investors are able to earn an expected return,” Huebner says. “We Energies and its parent company are committed to 80% carbon reduction by 2050.”
“To do it quicker than that means we have to figure out how to pay for, or refinance, existing coal plants, so that we can bring more wind and solar online faster,” Huebner says. “Building a coal plant costs one or two billion dollars.”
Amy Jahns, senior communications specialist at We Energies, says We Energies has more than 300 small commercial and industrial customers and more than 1000 residential customers with private solar systems and that the numbers increase year after year. While We Energies closed its coal-burning Pleasant Prairie plant in 2017, its coal-burning Oak Creek power plant has come under criticism by neighbors who complain about coal dust blowing through residential neighborhoods. “We are retiring a lot of our older, less efficient coal-fueled plants and looking for ways to invest in more advanced-technology natural gas units,” including zero carbon-renewable generation, Jahns says. We Energies built its coal-fueled Elm Road Generating Plant in Oak Creek in 2011. Just 5% of We Energies energy production in 2017 came from renewable sources.
For some, like Elizabeth Katt Reinders, the utilities are not moving fast enough. “There is momentum,” Reinders says. “It is very exciting to see both private and utility-scale investment and commitment to clean energy development. But we are just scratching the surface of clean energy potential in Wisconsin.”
She says that we need to work proactively as a state and as communities within a state to drive a clean-energy development and anticipate the transition from a fossil-fuel economy to a clean-energy economy.
Wisconsin Has Fallen Behind
“We have a very low renewable portfolio standard in Wisconsin,” Reinders says. “We were once leaders, but we have fallen way behind.” She does not believe, however, that state mandates are a silver bullet; she thinks they are one component in bringing about change. “We have a lack of leadership at the state level, but we are seeing local leadership from cities and counties across the state, because it makes economic sense for the communities.” she says. “The local leadership is not waiting for state or federal leadership.”
Nationwide, solar employment since 2010 has grown by 168%, from slightly more than 93,000 jobs to more than 250,000 nationwide, according to The Solar Foundation. According to the U.S. Department of Energy, the electric power generation sector employed 10,182 workers in Wisconsin in 2017. Solar makes up the largest segment with 4,029 jobs, with traditional fossil fuel generation at 3,422 jobs.
In the City of Milwaukee, the residents, businesses and local government spend $1.4 billion on fossil fuels annually, says the Environmental Collaboration Office of the City of Milwaukee. Quickly-evolving technology has put solar energy solidly on the map as the preferred alternative—environmentally and economically—to fossil-fuel energy generation. Transitioning away from fossil fuels is not as big a leap as it once seemed, but barriers still exist.
With climate change being a growing, multi-fanged menace, the emergence of green and economical solar energy would seem to have come of age at an opportune moment. Renewable energy production continues to grow. Its growth, however, may not be rapid enough to sway global climate change, according to the International Energy Agency’s World Energy Outlook 2018 report. “Government policies and preferences will play a crucial role in shaping where we go from here,” the report concludes.
