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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?

11 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 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.

    4. 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.

    5. 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.

    6. 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.
    7. 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.

    8. 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.
  2. 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

  3. 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.