Saturday, March 15, 2014

Minnesota Adopts First Statewide Method for Calculating the Value of Solar Power

Solar panels being installed on roof (Credit: Shutterstock) Click to enlarge.
On Wednesday, the Minnesota Public Utilities Commission voted to become the first state in the nation to come up with a methodology for calculating the value of solar power generated by consumers — and not just how much that power is worth to the utility company and its customers, but to society and the environment as a whole.

In the end, at the urging of environmental groups and the state’s Department of Commerce, the commission voted to adopt the U.S. government’s social cost of carbon figure.

Put simply, the social cost of carbon is the government’s estimate of how much carbon emissions harm the economy — such as the cost to public health, agricultural output, sea-level rise and other damaging effects that stem from carbon pollution and climate change. Clean energy advocates argue that the cost of carbon doesn’t really get accounted for in the current energy economy; even when customers are compensated for generating solar power, that calculation typically doesn’t include the larger benefit that comes from decreasing the amount of carbon pollution that’s emitted into the atmosphere.

One of the dissenting votes in Minnesota’s decision came from Commissioner David Boyd, who argued that the government’s social cost of carbon figure hadn’t been adequately vetted.  The U.S. government’s mid-range estimate for the cost of carbon in 2015 recently increased to $37 per ton of carbon dioxide, a number the Natural Resources Defense Council, Environmental Defense Fund, and the Institute for Policy Integrity argued was far too low in a report released Thursday.

As Jeff Spross explained on Climate Progress, estimates vary widely, and “the relevant science has put together studies pegging the SCC at anything from $55 per ton, to $100 per ton, to as much as $900 per ton.”

Minnesota Adopts First Statewide Method for Calculating the Value of Solar Power

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