Governor Cuomo has set the goal that in less than a decade and a half, 50% of New York State’s energy will come from renewable resources. To some, that goal seems to be a stretch, but the chatter I’m starting to hear indicates we might even do better. As Kaya Laterman wrote in the New York Times real estate section last week:
“Solar power in New York City may finally be having its moment. The number of residential projects across the five boroughs has risen to more than 5,300 this year from 186 in 2011, according to state officials, and there are another 1,900 in the pipeline. The solar boom has been prompted by a 70 percent drop in installation costs in recent years, according to the Solar Energy Industries Association, along with the streamlining of government approvals and incentives.”
Her piece explains all the obstacles to rooftop solar installation, including New York City’s rigorous fire code that requires that some rooftop space remain uncovered. Many obstacles have been overcome by creative and determined efforts by builders and government to address both red tape and important safety rules.
Solar in New York City is not as distant as some might think. In part, the image of New York City in the mass media comes from Manhattan. The density and absence of sufficient rooftop space seems to be a substantial obstacle to solar installation in New York City. However, most New Yorkers live in the outer boroughs, not Manhattan. Moreover, although most of New York’s residents live in apartment buildings, most of the land in New York City sits beneath single-family homes. This means that for many parts of the city, solar in New York is no different than solar in older suburbs throughout America.
The incentive for solar in New York City is also helped by New York’s very high electric utility rates. These rates are among the highest in the country. Solar is competitive with traditional sources of power in less expensive states, but in New York the time it takes to recoup the capital cost of a solar installation is only seven years long. There are a growing number of companies that will pay the capital cost of solar panel installation in exchange for a portion of monthly household energy savings. As solar installation comes down in price, the advantage of owning your own system increases.
What impresses me is that even the current expensive—and in some ways, clumsy—solar technology is still cost-effective in the long term. Government tax incentives have accelerated adoption of existing technologies, and solar-generated electricity and hot water already saves consumers money on their monthly energy bill. Despite the complexity of building anything in New York City’s crowded and regulated real estate market, solar power is even gaining momentum here. It’s an important and impressive development.
Imagine what might be possible if solar technology started to advance. Smaller, more efficient and less expensive solar cells along with smaller, cheaper and more efficient battery storage would be transformative. But we need more than technology: For the full potential of renewable energy to be achieved, we will need institutional change along with technological change.
The most basic problem is the one now faced in California, where occasionally more renewable energy is produced than the grid can use. As Richard Martin observed in the MIT Technology Review this past April:
“Solar and wind power are coming online at rates unforeseen only a few years ago. That’s a good thing if your goal is to decarbonize the energy sector. But if you’re a utility or independent power producer and you make your money selling electricity, it can be not such a good thing. In places with abundant wind and solar resources, like Texas and California, the price of electricity is dipping more and more frequently into negative territory. In other words, utilities that operate big fossil-fuel or nuclear plants, which are very costly to switch off and ramp up again, are running into problems when wind and solar farms are generating at their peaks. With too much energy supply to the grid, spot prices for power turn negative and utilities are forced to pay grid operators to take power off their hands. That’s happened on about a dozen days over the past year in sunny Southern California…”
The sunk capital costs in existing power plants and fossil fuel mining and transport creates a powerful economic and political force to resist decentralized, distributed generation of power and the smart grid infrastructure needed to make the grid more efficient and able to receive, as well as send, energy. Changing the energy system may require institutional and regulatory reform along with new technology. This is achievable since energy utilities are regulated monopolies that states can control if they have the will to do so.
Improved battery technology may make the grid itself irrelevant, as households find they can produce and store all the energy they need. This may be feasible for households and even service businesses, but might not be feasible for heavy energy industrial uses such as data farms and manufacturing. The energy future will involve the interaction of technology, institutional reform, and political power and will. That is the definition of unpredictable. We don’t know the form or price of new energy technology and we don’t know if the energy industry is capable of pivoting away from the current structure to a new one.
The transition to a renewable resource-based economy requires new thinking and new development of new organizational capacities. There are many examples of private companies and government organizations that have adapted with the times:
- New York City’s government delivers most of its socials services through mission driven nonprofits.
- Our Parks Department runs high-profile parks in wealthy areas through nonprofits like Friends of the High Line and the Central Park Conservancy.
- AT&T got out of the telegraph business, and even reduced its stake in landlines, and got into the cellphone business.
On the other hand, Kodak was late in figuring out the importance of digital photography (even though they largely invented it). Some fossil fuel companies have been among the leaders in denying climate science. If transformative energy technology gets developed that is cheaper and as reliable as fossil fuels, they could have their own “Kodak moment” of decline and bankruptcy.
Projections of the impact of business-as-usual indicate that the failure to reduce greenhouse gas emissions over the next half-century will result in sea level rise and damage to existing water, energy and waste infrastructure along with reduced agricultural and industrial capacity. The key to proving those projections wrong is to transition from fossil fuels to renewable energy. Despite the obstacles to that transition, a new energy base presents many opportunities for businesses, governments and individuals willing to embrace a renewable resource-based future. While the federal government remains mired in dysfunction, states like California, Oregon, Washington, and New York are moving forward.