Monday, August 30, 2010

Smart Grid City Update

Well, unfortunately, Xcel and the PUC have really bungled the potentially exciting deployment of the Smart Grid City prototype in Boulder.

The whole business model for Smart Grid in Colorado is strange because it's a monopoly trying to save it's customers money.
The PUC tries to regulate against Xcel ripping off their customers, but they have almost no directive to promote investment now if it saves money in the future. Add to that some customer resistance to smart metering because it is viewed as an invasion of privacy, and you get a difficult if not impossible implementation.

Why do we care so much about the Smart Grid? Because if TRUE electrical costs could be accurately accounted for and allocated, a residential solar photovoltaic system can be shown to be a better investment than it currently is. We are firm believers in the theory that many small investments in renewables and efficiency can make faster and more nimble improvements in the US's overall energy problems. Big ideas and large projects take much longer to implement, because they are big. The large amount of capital required slows down the process too much, even if the ROI is significantly better than small projects.

If your home-based PV system gives you a return of 5%-15% on your money, millions of homeowners will quickly enter the green energy market as investors. Even if they have zero cash, they can partner with a 3rd party such as SunRun to get a system installed.

We have lots of conservative friends who even think PV is a good investment.

Although we were hoping that the Smart Grid could reduce PV system size, PV system cost has been dropping steadily, so this good news takes the sting out of Xcel's big fumble.