Photovoltaic technology for sustainability: An investigation of the distributed utility concept as a policy framework

The U.S. electric utility sector in its current configuration is unsustainable. The majority of electricity in the United States is produced using finite fossil fuels. In addition, significant potential exists to improve the nation's efficient use of energy. A sustainable electric utility sector will be characterized by increased use of renewable energy sources and high levels of end-use efficiency.;This dissertation analyzes two alternative policy approaches designed to move the U.S. electric utility sector toward sustainability. One approach is labeled incremental which involves maintaining the centralized structure of the electric utility sector but facilitating the introduction of renewable energy and efficiency into the electrical system through the pricing mechanism. A second policy approach was described in which structural changes are encouraged based on the emerging distributed utility (DU) concept. A structural policy orientation attempts to capture the unique localized benefits that distributed renewable resources and energy efficiency offer to electric utility companies and their customers.;A market penetration analysis of PV in centralized energy supply and distributed peak-shaving applications is conducted for a case-study electric utility company. Sensitivity analysis was performed based on incremental and structural policy orientations. The analysis provides compelling evidence which suggests that policies designed to bring about structural change in the electric utility sector are needed to move the industry toward sustainability. Specifically, the analysis demonstrates that PV technology, a key renewable energy option likely to play an important role in a renewable energy future, will begin to penetrate the electrical system in distributed peak-shaving applications long before the technology is introduced as a centralized energy supply option. Most policies to date, which I term incremental, attempt to encourage energy efficiency and renewables through the pricing system. Based on past policy experience, it is unlikely that such an approach would allow PV to compete in Delaware as an energy supply option in the next ten to twenty years. Alternatively, a market-based, or green pricing, approach will not create significant market opportunities for PV as a centralized energy supply option. However, structural policies designed to encourage the explicit recognition of the localized benefits of distributed resources could result in PV being introduced into the electrical system early in the next century.