Midwest Solar Market: Hot or Not?

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As much as 67 gigawatts of distributed solar power could be installed in the Midwest at prices competitive with utility retail rates by 2022, without subsidies. It’s enough solar to meet 5-10% or more of the region’s electricity demand. But the growth of solar energy in the Midwest has lagged other parts of the country.

Is solar ready to boom in the Midwest, or does poor policy still stand in the way?

This presentation (shown below) explores the potential, the economics, and the policies needed to help advance distributed solar power the Midwest and unlock the opportunity.

Download the presentation or scroll down to click through the slides

Huge Potential

Most Midwestern states could get 20% of their electricity from rooftop solar alone.

With retail electricity prices rising by 4-5% per year, solar will be able to compete (without subsidies) to serve 10% or more of electricity demand in Wisconsin, Michigan and Kansas by 2022.  It could compete economically with 5-10% of energy sales in most other Midwestern states, including Minnesota, Iowa, Illinois, Missouri, Indiana, Ohio, Nebraska, and South Dakota. (note: I assumed annual cost reductions of 7% for solar installations for this analysis, but evidence from Lawrence Berkeley National Labs suggests it’s twice that pace).

Big Value

Thanks to Minnesota’s value of solar formula, it’s clear that solar energy provides big value to the grid system. A study in Missouri suggests that the economic value is also big. And few things motivate residents and businesses to invest more in clean energy than owning it themselves, as illustrated most vividly in Germany’s massive shift toward clean energy driven by 50% local ownership.

Hot or Not?

Unfortunately, few Midwestern states have the full suite of policies in place to grasp the enormous solar opportunity as the costs continue to fall. The Dakotas, Nebraska, Kansas, and Iowa in particular have little solar installed and a policy framework that’s done little to drive new installations. The other states have done more, although rollbacks to renewable energy policy in Ohio and loopholes in Illinois have hampered both state markets. A major battle with utilities in Missouri has threatened to shut down one of the bright spots in the Midwest.

The rising star is likely Minnesota. With a 1.5% by 2020 solar standard for investor-owned utilities, powerful evidence of the value of solar, an increased net metering cap, and robust performance-based solar incentives, the state should easily reach its 400 megawatt solar goal well ahead of the 2020 deadline.

This presentation was provided by Institute for Local Self-Reliance Director of Democratic Energy John Farrell to the Midwest Solar Expo on May 16, 2014. For an explanation of the data in the maps, see ILSR’s Rooftop Revolution resources.

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.


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John Farrell

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

John Farrell has 518 posts and counting. See all posts by John Farrell