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Utilities Fight Back Against Solar Energy

Posted by timothy on from the this-again dept.

JoeyRox writes "The exponential growth of rooftop solar adoption has utilities concerned about their financial future. Efficiency gains and cost reductions has brought the price of solar energy to within parity of traditional power generation in states like California and Hawaii. HECO, an electric utility in Hawaii, has started notifying new solar adopters that they will not be allowed to connect to the utility's power grid, citing safety concerns of electric circuits becoming oversaturated from the rapid adoption of solar power on the island. Residents claim it's not about safety but about the utility fighting to protect its profits." We mentioned earlier the connection fee recently approved in Arizona. Do you have a solar system? If not (or if so, for that matter), does this make you think twice about it?

24 of 579 comments (clear)

  1. There must be a very good reason... by benjfowler · · Score: 5, Insightful

    I don't understand why the utilities simply don't build out their grids to accept feed-in from customers' solar rigs, and then split their pricing structure into 1) grid access, and 2) net power supplied? Or is this too simple?

    1. Re:There must be a very good reason... by thesupraman · · Score: 5, Informative

      Because they are usually required to pay customers a lot more for feed-in power than they can generate it for, with no allowance for their internal cost overheads, etc.

      Basically they become a free power storage and backup facility only paid for any extra usage) for the customers, which is great for adoption, but means that non solar customers are adding further subsidy to the solar customers (over and above the common subside via taxation/government grants).

      Not that I am against private solar - I have it myself, but using the grid as backup/storage is somewhat unfair in the big picture.

      Some pricing plans are a bit more in line with reality, but regulators push hard to make it 'simple for the consumer' which really tends to end up meaning
      'subsidize the solar users'.

    2. Re:There must be a very good reason... by ChumpusRex2003 · · Score: 5, Informative

      Because it is exceedingly expensive to do so.

      The issue is that of voltage tolerance. The grid is designed to supply power form central to peripheral. The central voltage is held higher than peripheral, so that the expected voltage drop through supply impedance will result in a voltage at the customer premises which is within tolerance.

      If current flow is reversed through the high impedance "last mile", then you can get severe voltage elevation at the point of connection of the generation. This can result in equipment damage (usually the customers) and legal problems for the electricity network operator.

      The only way to deal with this problem is to increase the "prospective fault current" of the customer circuit by reducing the system impedance. This isn't something simple like replacing transformers, it is extremely expensive and requires repalcement of cabling with heavier gauge wire, upgrade of safety equipment to withstand the higher fault currents, and may require uprating of transformers and switchgear to handle the magnetic and thermal forces of a fault on the now upgraded circuit.

      There are other issues too. Grid transformers are often not designed to operate in reverse power - the tappings are designed for voltage drop in the direction of HV to LV. Under reverse power, there may be insufficient tap range to get satisfactory voltages. Only way around this is to replace the transformer.

      Finally, there are second order effects, such as reduced efficiency of transformers when operated in reverse power, due to higher levels of flux leakage from the secondary (primary windings usually go nearest the core, so that stray flux cuts through the secondary and transfers power).

    3. Re:There must be a very good reason... by Mashiki · · Score: 4, Informative

      Because they are usually required to pay customers a lot more for feed-in power than they can generate it for, with no allowance for their internal cost overheads, etc.

      Of course, and this in turn is offset by higher electricity prices. Surprise, and welcome to Ontario, Canada. Where electricity prices will jump 33% in the next 3 years thanks to "green energy." This will make it one of the most expensive places in North America to buy electricity. And what's funny? These "green energy retrofits and FiT programs" account for under 14% of generation.

      --
      Om, nomnomnom...
    4. Re:There must be a very good reason... by alexander_686 · · Score: 5, Interesting

      Mod parent up – and Hawaii has some specific issues.

      Hawaii has basically hit the saturation point of renewable energy until a decent storage system is developed. Renewables output tends to be erratic. If the wind is up or the sun is out the utilities has to bring down their gas generators, wind dies down or the sun sets and they have to bring on the generators. In other parts of the world they could export the electricity but that’s not an option here. Basically they have hit the saturation point. If you added more renewables the utilities would leave the power plants because they could not bring them up fast enough.

      Fun fact – Germany this summer charged customers who exported renewable energy onto the grid. They mainly have coal plants which take hours to take off / bring online. A few days of good wind and low demand meant there was nowhere for the electric to go. I think Germany is trying to fix that with more transmission line but it gives you an idea of the problem.

    5. Re:There must be a very good reason... by rahvin112 · · Score: 5, Interesting

      That's not an entirely fair assessment. Solar feed-in is during peak power rates and the owner is at best reimbursed at the fixed residential rate which is frequently 1/4 to 1/8 of the peak rate. I agree that solar users are going to need to contribute to the grid but the power companies are being very short sided here.

      Without the feed-in of peak solar output and the credits that generates there is no reason not to install the batteries needed to go fully off grid where the homeowner won't be contributing anything to the grid. There is a very fine line here where battery storage becomes viable and we are approaching it rapidly. Solar continues to fall in cost, it's already approaching price parity with nuclear power without subsidies. If it continues to fall to $0.50 a watt it's going to reach cost the amortized cost of coal generation. It's beginning to hit critical mass, the more demand the steeper costs will drop which lowers costs and increases demand more. After years of subsidies priming the pump solar is finally gaining momentum and it scares these power companies to death because they are invested almost entirely in hydrocarbons. They are fighting solar because of these investments.

      The scary thing here is that if they don't turn things around and realize the potential of solar and embrace it they are going to get displaced by battery storage and then the power company is out of business. There is a very real possibility that by 2030 solar is going to be THE source of power.

    6. Re:There must be a very good reason... by Mike_EE_U_of_I · · Score: 5, Informative

      Because they are usually required to pay customers a lot more for feed-in power than they can generate it for, with no allowance for their internal cost overheads, etc.

      Basically they become a free power storage and backup facility only paid for any extra usage) for the customers, which is great for adoption, but means that non solar customers are adding further subsidy to the solar customers (over and above the common subside via taxation/government grants).

      You cite factors that fall against solar, but miss all the ones that fall in solar's favor. The biggest is peak shaving. In many areas, usage peaks coincide with when the sun is shining. Peak power is the most expensive power. Imagine building a power plant and running it seven hours a year. Welcome to peaker plants. That's some hellishly expensive electricity. In places like Hawaii, Texas, Arizona, and southern California, when people put more solar PV in, the utility needs fewer peaker plants. This is HUGE. You know how much credit most utilities want to give to solar for that? Zero.

          But if the utility does something to eliminate the need for a peaker plant, you can bet your entire net worth the utility will be asking the rate commission for higher rates to reward them.

          The best work on this subject (trying to figure out what price has no one subsidizing any one) is coming out of the Rocky Mountain Institute. A good starting place is their survey of existing literature (http://www.rmi.org/Knowledge-Center%2FLibrary%2F2013-13_eLabDERCostValue). Austin electric also appears to have done really good work in establishing what they call a "fair value of solar". By their measure, the fair value of solar in Austin is currently higher than the retail rate. As more solar is added, this rate will fall. The rate is assessed annually.

    7. Re:There must be a very good reason... by TrumpetPower! · · Score: 5, Informative

      Because they are usually required to pay customers a lot more for feed-in power than they can generate it for, with no allowance for their internal cost overheads, etc.

      Absolutely false -- horribly false.

      On a day-to-day and month-to-month accounting basis, my utility (Salt River Project in Arizona) gives me a kWh-for-kWh credit. If I generate 20 kWh during the day, use 15 kWh during the day, and another 5 kWh during the night, I have net zero usage.

      Surpluses are carried over day-to-day and month-to-month. If I have a net debit at the end of the month, I'm charged the regular rate for that electricity. If I have a surplus, it's carried over to the next month.

      Once a year, in the spring, if I have a net surplus, SRP credits my account and resets the surplus to zero. And I generate about half again as much as I consume -- enough to power my not-yet-purchased electric vehicle -- so they credit me a fair amount every year. It's enough to pay the basic connection fee for about half the year, in fact, so I only even pay that for about six months per year.

      But.

      Rather than crediting me at the $0.12 / kWh typical residential retail rate, or the $0.25+ / kWh they purchase peak summer power (which is when I'm generating most of my surplus electricity), they pay me about $0.02 / kWh.

      By my rough back-of-the-envelope calculations, they're now profiting from me almost as much as I used to pay them in total. As in, what used to be their gross receipts from me is now their net.

      What business wouldn't be thrilled with such a business model?

      So, do please stop spreading the lies of the Koch Brothers. The poor widdle utilities aren't being hurt by the solar meanies -- quite the opposite. They're making money from us, hand over fist.

      They're just a bunch of greedy sick fucks who want to roast the goose that's laying the golden eggs, is all.

      Cheers,

      b&

      --
      All but God can prove this sentence true.
    8. Re:There must be a very good reason... by Nerdfest · · Score: 5, Insightful

      More accurately, it's going up because of corrupt government and bad management.

    9. Re: There must be a very good reason... by noh8rz10 · · Score: 4, Insightful

      in CA all the utility power is "decoupled", which means that electricity is sold at cost while the utility makes all of its money of off its installed infrastructure. This way they don't give a hoot if you get your electrons from a power plant or a solar panel. in fact, every person who installs a solar panel needs a utility upgrade to connect it to the grid, and the utility makes $$ off of that in perpetuity.

    10. Re:There must be a very good reason... by Trepidity · · Score: 4, Insightful

      On a day-to-day and month-to-month accounting basis, my utility (Salt River Project in Arizona) gives me a kWh-for-kWh credit. If I generate 20 kWh during the day, use 15 kWh during the day, and another 5 kWh during the night, I have net zero usage.

      The fair price for net-zero usage is more than $0. You are deriving a service from the grid, which is presumably why you're connected to it. In this case, you're using it to time-shift your energy usage, rather than buying your own batteries and going off-grid. So if you draw 20 kWh from the grid at some point, and feed 20 kWh back into it at another point, and are paying $0 for that, you are being subsidized.

      The correct accounting would be that you should be charged retail rates for what you draw out of the grid, but reimbursed only at wholesale rates for what you feed into the grid, like any other power producer who feeds into the grid is paid.

      --
      10 PRINT CHR$(205.5+RND(1)); : GOTO 10
    11. Re: There must be a very good reason... by Dr+Max · · Score: 5, Insightful

      We do that in australia by letting anyone with solar generation jack up the network voltage in order to backfeed. It's causing massive problems (mostly around retirement homes) because the network is operating at around 270v in the middle of the day, in a suburb with lots of solar (should be about 240v). Thats the other thing, we don't need all this extra power in the middle of the day, we need it at 6 oclock at night when everyone turns on the big screens and ovens. It's not a good soloution, and thats a big part of why you cant get a good price on solar generation any more (used to be 44cents per kwh, now its 8cents per kwh). We need a new long life battery technology to use solar properly if you ask me.

      --
      Rocket Surgeon.
    12. Re: There must be a very good reason... by currently_awake · · Score: 4, Insightful

      hydro-electric works rather well for that. You pump water into the upper reservoir during the day and use that to run the generators at night.

    13. Re: There must be a very good reason... by LWATCDR · · Score: 4, Informative

      No they are really not. Maybe from a business standpoint but not from a reality standpoint. Solar goes from zero to max out put from dawn to solar noon back to zero at sunset. Actually it is zero for a good while after dawn and before sunset but you get what I mean. Once you get a lot of that on a grid it can become a nightmare to keep stable. Batteries are not an option yet so storage is just not practical. You need a huge amount of peaking plants to keep the grid stable. You do not want large voltage and or frequencies swings.

      --
      See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
    14. Re: There must be a very good reason... by Ungrounded+Lightning · · Score: 4, Insightful

      Solar goes from zero to max out put from dawn to solar noon back to zero at sunset. ... You need a huge amount of peaking plants to keep the grid stable. You do not want large voltage and or frequencies swings.

      Except that renewable energy largely feeds during the peaks, REDUCING the need for peaking generation. Solar generates more during sunny times, closely tracking air conditioning requirements. Wind peaks in afternoon/evening, along with classical peak load, due to "lake effect" wind at good sites (i.e. Altamont pass, with the Pacific for the "lake" and California's central valley for the "land") and also tracks heating requirements, due both to lower temperatures during stormy times and greater thermal transfer through walls during windy times. A mix of solar and wind is normally a close match to the grid's peak cycle.

      Meanwhile, generation-affecting weather phenomena, like storm shadows and weather-related winds and gusting, make output vary quickly at any given site, but with both solar and wind generation spread out over many square miles and grid-connected these variations are smoothed out. They're also predictable days in advance.

      So solar and wind DECREASE the need for peaking generation.

      --
      Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
    15. Re: There must be a very good reason... by ultranova · · Score: 4, Interesting

      You don't need giant indoor dam, you just need a giant outdoor tank higher than the surrounding region. The problem is, big tanks like that are kinda expensive. Millions of dollars.

      Expensive and, more importantly, dangerous - storing large amounts of power would risk a rather large flood. It would make more sense to excavate an underground cavern and pump water out of it to store power. This is (likely) cheaper, safer and allows far more height difference, thus more power per same amount of water and storage space. And of course you get a huge cistern out of the deal, too.

      Let's assume we excavate our cistern so we get a water head of 100m for our turbine. Also, let's assume the turbine+generator is 80% efficient. A single cubic meter of water weights one metric ton, so we'll get 1000kg*100m*9.8m/s^2 * 0.8 = 784 kJ = 217.8 kWh out of it.

      According to Reuters, New York State's electricity usage peaked last summer at 33,955MW, so if we'd want to provide every single watt for, say, two weeks from our reservoir when fully loaded (completely empty of water) at maximum power draw, we'd ned to excavate 24h/d*14d*33955MW/217.8kWh/m^3= 53 million cubic meters of rock. This works out to a square 10 meters high and 2.3 kilometers on each direction (plus enough to compensate for support pillars). Expensive, yes, but also ridiculously oversized and perfectly doable with today's technology. Also, doubling the depth doubles the power contained in every cubic foot of water, leading to smaller cistern required.

      --

      Forget magic. Any technology distinguishable from divine power is insufficiently advanced.

  2. One sided analysis by OFnow · · Score: 4, Insightful

    The utilities appear to be doing a one-sided analysis from what I have noticed. They complain about their lines being loaded by customers generating power and don't count the reduction in line use from the local power a home solar instatllation is helping to power the local neighborhood. Yes, we have a rooftop solar installation. Currently around 90,000 of them in California. Increasing fast. Local solar company is hiring 10-15 new installers *every day* according to local paper.

  3. Does this make me think twice about it? by rmdingler · · Score: 5, Interesting

    Why yes indeed... I imagine there exists some real progress if the utilities have begun to fear it.

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

  4. Re:Solar power is subsidy of rich by blue+trane · · Score: 4, Insightful

    Why not fund research into energy storage technologies so when the grid is overloaded, the energy can be saved and used later?

  5. Ridiculous situation, all the way around.... by King_TJ · · Score: 4, Interesting

    If we had truly privatized power companies, I'd expect this behavior. After all, it would only make sense. You invested a bunch of money to build a whole infrastructure for power generation, doing all of your cost calculations based on people relying on it for 100% of their electricity needs. You have no provisions in place to store incoming electricity for future resale to users. What upside would you have if your customers start to generate their own power?

    But we don't. We have government regulated monopolies. I'm not trying to argue the merits for or against the arrangement right now, except to say this means to me, they should be required to comply with whatever the government believes is the best way forward. If government is going to issue tax breaks and incentives for installing solar power? Then it's clear it thinks this type of energy generation on an individual basis should be encouraged. So how can it sit by and tolerate the power companies imposing rules that run counter to that goal?

    Personally, I think as a homeowner, my ideal solar installation would be one where I don't need to be tied to the grid at all. Tesla is working on battery packs for homes that look a lot like refrigerators, which you'd couple to a solar panel installation to provide power at night or during bad weather conditions when the panels aren't capturing energy. I've heard that currently, they make the cost of the installation a bit prohibitive, but there's a good chance they'll become successful as part of a mainstream installation in the next 3 years or so. From what I've heard, reviewers of the setup said it was possible to run the entire home for as long as 48 hours or so on nothing but the battery pack, as long as power was used somewhat sensibly (not just leaving all the lights on in the house for no reason, etc.).
     

  6. HECO is not denying Solar installations. by Anonymous Coward · · Score: 5, Informative

    I work for Maui Electric which is a subsidirary of HECO. I am posting AC for this reason. I am copying part of a news release that we gave to these customers to help them understand. "On Sept. 6, the Hawaiian Electric Companies announced they were enabling more small PV systems (10 kW and under) to be added without a potentially time-consuming interconnection study and possible safety upgrades. The new threshold for a possible study was set at the point at which the PV on the circuit reached 100% of that circuit’s daytime minimum load, increased from 75%. At the same time, with a growing number of circuits with high amounts of PV, Hawaiian Electric also announced that customers who want to add PV on circuits that have reached the more liberal 100% threshold would need to await the results of an interconnection study to ensure their PV system can be safely interconnected into the grid. Previously, when PV levels were lower, O‘ahu customers had been allowed to interconnect their systems while they were awaiting final Hawaiian Electric approval of their net energy metering contract. Some customers with loans and/or contractual obligations for a PV system at the time of the announcement were caught in the transition, facing the possibility of being unable to get the benefits of a PV system they had committed to buy or had already installed" We are not denying any customers Solar, Hawaii leads the nation in KW generated per customer. (Solar Electric Power association Rankings). Hope that clears up some questions people may have.

  7. Our Utility Admits It is about Money by pubwvj · · Score: 4, Insightful

    Our utility has also put a ban on "Net Metering Connects" as they call it here. They fully admit it is all about money but still try and look green. It is all a sham and a scam.

    The way net metering works here is during the summer months when you generate excess power you build up a credit on your account. Then come January 1st take all that extra credit that you have built up and donate it to themselves such that you start the new year with no credit during the darkest, cloudiest time of the year. Now you have to buy power from them until you get to late summer when you've finally got a net metered credit again. Very lucrative for the power company.

    So, why don't they want more connections? Because they say the people who are net metering aren't having to pay the cost of power delivery and they are protesting this by demanding a new fee and higher rates.

    Pure greed.

  8. First they ignore you, by Maxo-Texas · · Score: 4, Interesting

    First they ignore you, then they laugh at you, then they fight you, then you win.

    Mahatma Gandhi

    ---

    Solar power continues to get cheaper. I'm interested in the implications for the broader energy market. Even a 5% drop in demand for coal, natural gas, and oil could have a tremendous impact on the boarder market.

    --
    She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
  9. Re:Solar power is subsidy of rich by Required+Snark · · Score: 4, Interesting
    You have it 100% backwards. The current fossil fuel based energy economy is built on a foundation of taxpayer subsidies. Here are some of the tax breaks that oil companies get. http://money.cnn.com/2011/04/26/news/economy/oil_tax_breaks_obama/

    The percentage depletion allowance: This lets oil companies deduct about 15% of the money generated from a well from its taxes. Eliminating it would save about $1 billion a year.

    The deduction essentially lets oil companies treat oil in the ground as capital equipment. For any industry, the value of that equipment can be written down each year.

    But critics say oil in the ground is not capital equipment, but a national resource that the oil companies are simply using for their own profit.

    The foreign tax credit: This provision gives companies a credit for any taxes they pay to other countries. Altering this tax credit would save about $850 million a year.

    Foreign governments can collect money from oil companies through royalties -- fees for depleting their national resources -- and income taxes.

    A royalty would be deducted as a cost of doing business, and would likely shave about 30% off a company's tax bill. Categorized as income tax, it is 100% deductible.

    Foreign governments long ago grew wise to the U.S. tax code. To reduce costs for everyone involved and attract business, they agreed to call some royalties income taxes, allowing oil companies to take the 100% deduction on a bigger slice of their bill.

    Intangible drilling costs: This lets the industry write off about $780 million a year for things like wages, fuel, repairs and hauling costs.

    All industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.

    Here's the practical outcome of these policies: http://www.americanprogress.org/issues/green/news/2013/12/20/81497/baucus-tax-reform-cuts-46-billion-in-oil-breaks/

    The oil industry has prospered over the past decade, thanks to high oil and gasoline prices. The five largest companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—earned more than $1 trillion. In the first nine months of 2013, these five companies earned a combined $71 billion in profits. Certainly, these companies and other large oil companies will prosper without $40 billion in special tax breaks over the next decade.

    The tax subsidies for renewable energy are dwarfed by the tax subsidies for oil and gas. The oil and gas production industry is hugely profitable. When an industry has the top five companies making a trillion dollars profit over ten years why do they need any tax breaks that other businesses don't get?

    The real rich bastards are the oil company executives. You know how they spend that vast profit? Stock buybacks. About 25% of big oil company profit is going into stock buy back programs, which is more then they spend on exploration and acquisitions. Because of way that executive compensation is structured with stock options and deferred payouts, this ends up being a huge multiplier payout multiplier for the executives. They get their stock at a ridiculous discount, pump up the value and realize vast personal wealth.

    All the investors are happy because they see their valuation go up as well so they don't complain. It's short term gain over long term profit. According to this 2007 Bloomberg article, the big oil companies are effectively liquidating themselves over the longer term.

    If Chevron Corp. keeps buying back its stock at the current rate, the com

    --
    Why is Snark Required?