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Gambling State Says the Solar Gamble Is Over
New submitter mdnuclear writes: In a strange echo of the depressed oil economy SolarCity recently announced a layoff of a quarter of its workforce as the apparent result of the Nevada PUC's decision to phase solar net-metering customers down from retail to wholesale per kWh. A scathing editorial in the WSJ last December took both solar leasing companies and their financial underwriters to task, calling net metering a "regressive political income redistribution in support of a putatively progressive cause."
Wednesday the PUC fronted a possible compromise, 'grandfathering' existing net metering customers to their current rates to create a third caste of energy consumers, those who had been in the right place at the right time — for awhile. One who had paid $22k into solar lamented, "I'm not happy; my wife isn't happy, we could have done something else with that money." Like many who leave Vegas, perhaps they should have. But this begs the real question... are net-metering schemes ultimately 'right' or 'wrong' for the grid?
Wednesday the PUC fronted a possible compromise, 'grandfathering' existing net metering customers to their current rates to create a third caste of energy consumers, those who had been in the right place at the right time — for awhile. One who had paid $22k into solar lamented, "I'm not happy; my wife isn't happy, we could have done something else with that money." Like many who leave Vegas, perhaps they should have. But this begs the real question... are net-metering schemes ultimately 'right' or 'wrong' for the grid?
Why should you be paid retail for generation? That totally ignores the part the grid takes in handling your energy...
Ha ha, suck it mdsolar.
Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
That's absurd. This is a regulated monopoly. If the government wasn't regulating them, they would dramatically raise rates and prohibit solar altogether. When you have a monopoly, you have to regulate.
here in Arizona when I started seeing these ads on youtube with a bunch of old people talking about something scary, ending with a passionate plea to vote for such and such law, which turned out to be a law that let the power companies stop paying for the electricity folks with solar panels put back into the grid.
The whole "net metering" debate is just the power companies fighting solar. As time goes on it'll make electricity _too_ cheap. The reason we have public utilities is that businesses are in the business of making money; so for anything more important than a twinkie you're going to get price gouged sooner or later...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Sure, drop the rate back to wholesale for the buy-back of net metering, but then price it based on the spot market at that time, not the overall rate. The prices are highest during the day, so net metering for solar would likely pay more than the retail rate if the utilities had to pay for it based on the time.
Overall, utilities are saving money from solar--they're reducing what they have to pay to support peak demand, and now they're coming back and trying to suck more money out of their customers.
This is a money grab by the utilities, plain and simple. This has nothing to do with fairness.
If utilities don't do retail metering, consumers can get similar results by pooling their loads. Solar cogeneration is short-term steady while most domestic loads are intermittent, which means that over an hour a consumer might be a net provider to the grid but get charged amost as much as without cogeneration.
On the other hand, a buyers' co-op smooths out the load variations and approaches the effects of net retail metering. Which is appropriate, because (unlike wholesale rates) cogeneration does not put extra load on the grid.
If utilities don't adapt to these realities in a more realistic way than offering wholesale (i.e. solar plant) rates to cogeneration providers, they're likely to see a lot of pressure for cities and especially smaller towns taking over last-mile electrical distribution to get the same effect.
This last is not completely hypothetical; at least one Sunbelt town (mine) is moving in that direction.
Lacking <sarcasm> tags,
The more the utilities push towards charging decentralized solar, the more it becomes attractive to get battery banks and to completely go off the grid. Technology isn't quite there yet. Batteries are still too expensive, capacities are too low, and they need replacement too frequently. But the trend is definitely in the right direction. In a few years, it'll make sense for many current home owners to install batteries and disconnect from the grid altogether.
Why would you want to pay a monthly interconnection-fee, if you don't really need the grid and if you can't sell excess energy.
The "real question" is not whether net metering is good or bad. Of course it's good, and it will continue to become more common as solar (and even wind) micro-generation technology improves. It will get an even bigger boost if EV technology with bidirectional charging and large storage batteries become more popular, as Tesla would like them to. The dispute here isn't over net metering itself. The issue is all about the MONEY of net metering. Who pays what, and how? Before net metering, utility rates were set based on a fixed connection fee to pay for certain fixed infrastructure costs, plus an energy charge per kWh to gover generation costs. For large commercial users, the fixed fee was set as a "demand charge" based on peak consumption (since that determines how hefty the grid needs to be to serve the customer). For residential users, the demand charge is usually just a flat fee per month for the connection. In practice the demand/connection fee is not enough to actually cover the fixed costs of the system, and a lot of that expense is rolled into the energy rates. That doesn't matter in a world without net metering - it makes no difference to the utility whether they get their money per kWh or per month, as long as they get the money. Net metering screws this all up. A net-metered user may have zero net consumption in a month, while still requiring the same infrastructure as a user without net metering. As a result, the demand or connection charge needs to be greatly increased to make up for the lost kWh revenue.
The problem is that the adjustment of rates to accommodate net metering has been a hugely political process with every party trying to screw everyone else to the max. Solar companies want their customers to see huge financial benefits to justify their prices, so they lobby for net metering rates that strongly favor their customers: low monthly charges (ideally the same as for non-net-metered customers), with reimbursement for net metered power at the full retail rate (i.e. 1kWh sold back to the power company nets you the same money you would pay to buy the 1kWh from the power company). This makes solar look like a great investment. The problem is that is really does screw the power company. Since utilities are typically government-controlled monopolies, that means it actually screws the non-solar customers who will all be forced to pay for the net-meter-users' share of infrastructure. Not quite fair. On the other hand, though, we have utility companies trying to get the solar power as cheaply as possible while still collecting full reimbursement for infrastructure costs. They want to treat net-metered customers like power plants: charge them for all the infrastructure costs, and only buy their power at "wholesale" rates that are far less than what the consumer pays for power going the other direction on the same wires. This is also not fair, and screws the people who want to invest in solar by artificially depressing the value of their power. The solution must lie somewhere in-between. Utility rates and their basic method of allocating them will need to change, and it will take honest politicians not bought off by solar companies or utilities to reach a compromise that is fair for everyone. Fat chance of that happening any time soon.
I am a geek attorney, but not your geek attorney unless you've already retained me. This is not legal advice.
There is no market solution to this problem, right now. Pehaps smart grids will be able to address that someday, but right now, it's just who lobbies the regulator better. Given the reality that a monopoly grid currently in place, and is necessary, and given a monopoly, it must be regulated, and that regulation will perforce shape the market, the choice before people is what shape of market do you want? Distributed generation, as it reduces the amount of electricity that must be moved over long distances, is more efficient, and therefore cheaper, and so if we are going to fail in any direction it should be in favour of reducing costs for everyone. On that basis, a feed-in tarriff that encourages distributed generation is better for everyone except the incumbent electric generation and distribution organizations, as it reduces the amount of electricity they sell and ship.
Government should pick winners and losers when the market produces sub optimal outcomes.
Unless you replace reason with religion. In that case it could be like you said.
Someone reading the WSJ editorial might get the impression that fossil fuel subsidies don't exist. Sure, get rid of the subsidies. ALL of them.
Well your 'little more' is x4.23 as much. Instead of selling at the market price for supplying power at 2.6, they were selling it at the customer purchasing price of 11.
Now they are being dropped back down to normal supply pricing.
It was inevitable. Those kinds of premiums are only temporary to jump start an industry. Once they get large enough, the premium is removed and they then have to compete with everybody else in the market. After all, a market that makes nothing can't afford maintenance and other costs and collapses.
There's a simple solution, just use all the power you generate.
If you mean "minimum load" then, yes, they're ahead because they never send any to the grid in the first place. If you men "their average load," not so -- they're paying for the extra KW when the air conditioning kicks on and getting back a fraction when the AC is off.So in the course of an hour, they're behind by quite a bit.
Lacking <sarcasm> tags,
I see net metering as a purposefully over-complicated scheme with a few minor selling points but an all-too-familiar drawback:
If you see net metering as 'over-complicated', I'd hate to think of what you think of 'carbon trading' schemes.
At least to the Consumer, net metering is actually about the most simple system.
Net metering:
Uses: 1000 kWh. Generated 800 kWh. Electric Bill: 200 kWh@12 cents each.
Nevada rough example:
Used:1000 kWh.
Generated: 800kWh.
Internally used: 500 kWh
Sold: 300 kWh @ 6 cents (example amount)
Bought: 500 kWh @ 12 cents
That being said, given current generation profiles, solar panels aren't displacing 'wholesale' electricity yet, they're displacing electricity that's more expensive than that, so paying wholesale would be a large profit to the company, while net makes 'net zero' installs economical for solar installers.
Under Nevada's scheme, I'd probably survey my house and figure out when I use the least electricity and size my solar install to that so I sell as little solar as possible.
I don't read AC A human right
Tell that to the folks who generate electricity by burning fossil fuels. They are using the government to fight changes to the market brought about by new technology. And if you want a completely market driven solution then we should stop subsidizing the companies that burn fossil fuels by paying for the damages caused by the pollution generated by them. Burning coal spews out Mercury, Sulfur Dioxide, and many other pollutants yet society pays to clean them up and for any health problems caused by them. We can estimate fairly well how much those costs are so that amount should be paid by those companies back to society. Yes, the price of electricity would go up but then as you said the government shouldn't be picking winners and losers.
piles upon piles of legalese to build up
When I installed my solar, I looked at what sort of incentives that I could get. It would have paid a good chunk of it but after seeing all of the 'legalese ' and who owned what, I decided to go it alone.
Now a few years later, my system is 100% paid off (ie, already paid for itself), all mine, making free electricity and don't have to bother with any companies. And since I built up a good base system, I can add quite a few more panels without any additional cost. In the years since I set up my system, the price of solar panels have fallen to a less than one year payback time
Oil, coal, natural gas, hydroelectric and nuclear ALL benefit from government subsidies and regulations. It's the only reason our power grid covers the majority of our nation, as it would never have been "economically" feasible otherwise. If you don't believe that, just look at high speed internet and how many areas are under served not because they can't be profitable, but because they're not profitable enough, if you have to build the infrastructure too.
This is where the government beats industry, determining social benefits that override economic ones, and championing them.
Energy subsidies (discusses both fossil and renewable)
The two sets of changes are a gradual drop in per-KwH from 11 cents to 2.6 cents along with an increase in the charge for connecting to the grid, going from $12.75/month to $38.51/month.
If either one of those wasn't changing or was changing less then it might be feasible to at least break even; I suspect that the combination is actually designed to ensure that it costs more to feed power to the grid than you can possibly get back financially unless you have a huge (and thus expensive) solar array.
The biggest question now for me would be whether that $38.51/month charge applies even if you're set up to never feed energy back to the grid - if so, then this was absolutely set up to screw anyone with solar. If you can have solar for your own use (e.g. to cover your own AC/heating during the day) and just use the grid as backup, then it may still be feasible - particularly if cost-effective energy storage options become available. Depending on how things were set up, those options might not even need to be very efficient - heating or cooling of thermal masses for overnight temperature control for example.
Or, if you have electricity that you'll have to pay to send to the grid then it's effectively free to use it on other things. How much do Bitcoin mining rigs cost? Or incandescent-lit signs that say "F*ck The PUC"?
fencepost
just a little off
If there's one thing the "free" economy system has shown time and time again - it's that capitalism creates monopolies. The industries that are not dominated by monopolies or monopolistic competition are very, very few, far in-between, and generally without advancement.
PS: I don't reply to ACs.
"They effectively have prohibited solar. If I understand what they've done correctly, they've set a ridiculously high grid-tie charge with a ridiculously-low kWh payout, such that it is impossible to even break-even. "
No one owes you a break-even on a harebrained scheme. You are free to power your own house with solar. No one will prohibit it or care. But your insistence on a break-even means you're wanting someone else to subsidize your hobby.
OTOH, a deal is a deal.
Even if you have solar, and even if you use zero net KWH of energy, your bill is still full of a bunch of different charges that you cannot avoid. These various fixed and distribution-based charges are what pay for the grid infrastructure. Solar only lets you avoid (some of) the supply charges, I.e. the charges for the actual KWH. I have several neighbors with efficient homes and solar arrays who generate all their net energy and even send extra energy back to the grid, but they still have to pay nearly $17 per month in these unavoidable fees. That's fair--they pay for the benefits of having the grid to buy from and sell to as needed. But please can you shills for the power company lobby stop pretending that solar folks are not paying their share of grid expenses.
Government should pick winners and losers when the market produces sub optimal outcomes.
Unless you replace reason with religion. In that case it could be like you said.
To elaborate, in an ideal world the government would tax appropriately so that externalities were accounted for. You run a polluting coal plant, well we are going to charge you what we think the medical bills will be and then use that money to offset those costs. Factor in the lost work and income over a shortened lifespan, and their bill would be non trivial. In the case of Shina, well in the process of producing stuff you are poisoning the world and treating people like crap, well we have to account for that as well.
So, you can say, "Government should not pick winners and losers, provided you first level the playing field to account for externalities forced on the population.''
It doesn't have that soundbyte feel, but it is accurate..
The market is not a natural entity, it exists because government creates and enforces the conditions to enable it to exist.
Picking a market is *still* the government picking winners and losers. It is picking whomever does well when the market does well under the market conditions that the government preserves.
Governments pick. That's what they do. What's why they were created in the first place. The only question is who gets picked.
STOP . AMERICA . NOW
Net metering, as someone else said, is the simplest scheme.
With 'old-fashioned' meters, you get net metering for free. The spinners spin forward when you use electricity and they spin backwards when you generate electricity, leaving the meter to show you the net amount of power you used. simple.
To do other than this requires the fancy smart meters that can tell whether or not you are consuming or generating electricity, and can meter them separately.
It would also be worth looking at shifting demand. Set things up to run the dishwasher etc during peak solar production. Pre-cool the house and the fridge. Then size based on that.
>Distributed generation, as it reduces the amount of electricity that must be moved over long distances, is more efficient, and therefore cheaper
Only if generation + losses is more expensive than each small generation plant, or have you forgot what economy of scale means.
Also distributed generation is expensive because the entire grid has to be redesigned from a from the centralized generation where a few big units determine the clock of the network to a smart network that will require millions if not billions in upgrades to stabilize millions of input sources.
This will make batteries more important. Now it's no longer profitable to use the grid for storage.
Subsidy Comparison
http://www.dailykos.com/story/2015/3/21/1372244/-New-data-on-energy-subsidies-from-EIA
It's funny when people mention subsidies.
This tells a BIG story. If everyone here who whines about fossil fuel and nuclear subsidies followed that link, they'd have to start whining about something else. The real money column is the last one, Subsidies per MWh. From it we learn that rate/taxpayers in 2010 contributed $935.64 for each solar MWh produced while coal received only $0.74. Any time you see two things equivalent in any way with a 'cost' ratio of 1,264:1, you need to ask, what the hell is going on.
Have a gander at Electricity generation map of the US as of October 15 [XLS]. If you're practical like me you'll have to imagine those green wind blobs are a fifth the size shown, and the yellow solar blobs a third to better judge their intermittent and actual contribution to the human race. For solar (and we are mostly talking utility scale solar I know) this triples the cost ratio to coal to ~3,792:1. And posing that solar produces at 100% for a third of the day is generous.
So in terms of subsidies, is solar worth almost four thousand times as much as coal? Would you be willing to pay 4k as much for it? In certain sense... in 2010 you were. Good thing it was someone else's money. Or was it.
Fuck subsidizing each solar or wind MWh for thousands, or even hundreds, of that same hour's subsidy of coal.
The real clear winner in 2010 was nuclear, at $3.10/MWh produced. Imagine saving the planet from CO2 and coal or weaning us off of natural gas so it can do more chemically productive things for merely 4 times the subsidy than is presently granted coal. If I quoted that same figure for solar you'd be drooling. Someone somewhere is torturing numbers to make the same claim for solar and wind, I can hear their screams.
But never mind my arbitrary 'value' estimates. I consider any energy source that is not running at 100% 24/7 to be a grievous waste of human potential, a financial ruin and (to scale) most likely an environmental disaster waiting to happen.
Proponents of micro-gridding claim that if the grid evolves into a cornucopia of local energy sources, the win will be that utility companies will need to contribute less and spend less. But what is truly less? Does that mean that if current generated capacity is roughly equal to Summer or Winter peak, they could ever really shut down a plant? Not really.
Does it mean that the economics of building plants and stringing transmission lines in the first place, which are amortized over many years based on predictable factors NOT wishful flim-flam such as some guess of consumer uptake of solar toys... will improve in any way? Nope, things will get worse.
I seem to go further than anyone else around here, honestly considering this initiative to push tiny intermittent bits of energy into the grid as a threat to our country's stability and survival because it is a distracting and ultimately useless crap-solution to serious problems. One such problem is, what will happen when a series of massive Winter storms fragments the grid, shuts rail and renders every wind turbine and solar panel it touches, useless?
Could those subsidies and money real people spent on some 'pays for itself in 10 years' go-green plan have been better spent? If you went with the grid-sucking/spitting plans that the solar leasing companies push, absolutely. If you put in some extra money to actually power your home from what you produce you might win the battle if the grid goes down for any reason. But you'll be surrounded on all sides by poor people in th
<blink>down the rabbit hole</blink>
Sadly, I am not an island. Your decision to smoke, drive a car, or buy power from a coal-fired plant impacts me.
Well your 'little more' is x4.23 as much. Instead of selling at the market price for supplying power at 2.6, they were selling it at the customer purchasing price of 11. Now they are being dropped back down to normal supply pricing. It was inevitable. Those kinds of premiums are only temporary to jump start an industry. Once they get large enough, the premium is removed and they then have to compete with everybody else in the market. After all, a market that makes nothing can't afford maintenance and other costs and collapses.
You mean like nuclear power? http://www.ucsusa.org/sites/de...
Or petroleum? Or NatGas? Or Hydroelectric?
From another article:
http://www.misi-net.com/publications/NEI-1011.pdf
On energy incentives, and an tl;dr version from Wikipedia:
A 2011 study by the consulting firm Management Information Services, Inc. (MISI) estimated the total historical federal subsidies for various energy sources over the years 1950–2010. The study found that oil, natural gas, and coal received $369 billion, $121 billion, and $104 billion (2010 dollars), respectively, or 70% of total energy subsidies over that period.
The percentage is higher for renewables, which given the much smaller percentage of use, and of course the fact that renewables wasn't even on the map during that time. cite https://en.wikipedia.org/wiki/...
Corn based Ethanol production and the Alcohol credit for the FET is subsidized to the tune of almost 17 billion a year, renewable is 5 billion.
My point is that it's all subsidized. That the government subsidizes new power production isn't anathema to me in principle, but it would seem that the well established technologies shouldn't be getting subsidies. If you need to be subsidizing oil, natural gas, or coal for 60 plus years, they should be abandoned, right?. Or perhaps something else at play? Regardless, calling this "regressive political income redistribution in support of a putatively progressive cause." while apparently finding all of th others is hypocricy at t's finest.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
No one owes you a break-even on a harebrained scheme. You are free to power your own house with solar. No one will prohibit it or care. But your insistence on a break-even means you're wanting someone else to subsidize your hobby.
OTOH, a deal is a deal.
Now write the same thing about Nuclear, Oil, Gas, and hydroelectric. You have no issue with the massive subsidies they get?
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
The amount of subsidies, on kWh produced basis, is tiny compared to solar. The coal subsidies, assuming they even exist, look huge because they produce 30% or more of our electricity. Same for nuclear and natural gas as they also each produce roughly 30% of our electricity. That last 10% that is not produced by oil, coal, and nuclear is largely from wind. The fraction of a percent of the electricity that solar power produces gets them HUGE subsidies.
Several comments on this thread pointed out that solar energy gets 1000x the amount of subsidies that coal gets based on kWh produced.
I have no issue with the subsidies that nuclear, oil, gas, and hydroelectric get because those subsidies are miniscule compared to solar. I will agree that all energy subsidies must end, but solar subsidies are on a whole different level than the others.
Stop complaining about how much oil get subsidized, IMHO, it makes you look like a fool.
Here you go spunky. My research from another post. Some of it is based on a reply to another person, so hte beginning will be a little redundant.
You mean like nuclear power? http://www.ucsusa.org/sites/de... [ucsusa.org]
Or petroleum? Or NatGas? Or Hydroelectric?
From another article:
http://www.misi-net.com/public...
On energy incentives, and an tl;dr version from Wikipedia:
A 2011 study by the consulting firm Management Information Services, Inc. (MISI) estimated the total historical federal subsidies for various energy sources over the years 1950–2010. The study found that oil, natural gas, and coal received $369 billion, $121 billion, and $104 billion (2010 dollars), respectively, or 70% of total energy subsidies over that period.
The percentage is higher for renewables, which given the much smaller percentage of use, and of course the fact that renewables wasn't even on the map during that time. cite https://en.wikipedia.org/wiki/... [wikipedia.org]
Corn based Ethanol production and the Alcohol credit for the FET is subsidized to the tune of almost 17 billion a year, renewable is 5 billion.
My point is that it's all subsidized. That the government subsidizes new power production isn't anathema to me in principle, but it would seem that the well established technologies shouldn't be getting subsidies. If you need to be subsidizing oil, natural gas, or coal for 60 plus years, they should be abandoned, right?. Or perhaps something else at play? Regardless, calling this "regressive political income redistribution in support of a putatively progressive cause." while apparently finding all of the others just fine is hypocricy at t's finest.
Back to the present:
I don't really care if you find subsidies for all of the other energy sources just fine, while the 5 billion per year for all of renewables a thing to difficult to suffer. It merely shows your politics, It's like the free market Republicans working to ban Tesla dealerships in their states.
But the numbers speak for themselves.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
That decision ends up with sick and dying people on the street.
Are you so cheap that you wouldn't help a dying child who is laying on the street? After all it was the kids choice.
i thought once I was found, but it was only a dream.
It took only twenty seconds of flipping through your misi-net reference to find a glaring flaw in the calculations. Namely, those "incentives" or what you call "subsidies" are on the whole not subsidies at all. There are tax credits, regulatory effects ("gains realized by energy businesses when they are exempt from federal requirements that raise costs or limit prices", etc.).
A lot of it is BS, and >>90% is stuff other than "subsidy", i.e., a payment to someone. Whoa, it even says so on page 9:
"F. Disbursements
This category involves direct financial subsidies such as grants. Since 1950, direct federal grants and subsidies have played a very small role in energy policy, accounting for â"$6 billion, a negligible fraction of total incentives."
See that word, negligible? In your own source? Grok it.
It took only twenty seconds of flipping through your misi-net reference to find a glaring flaw in the calculations. Namely, those "incentives" or what you call "subsidies" are on the whole not subsidies at all. There are tax credits,
And some are written on green paper, some on white and a few others in purple ink.
Money is not money in your world, eh?
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
It is not the utility's fault solar doesn't break even. It just doesn't break even in practice at market wholesale rates. I know someone is going to reply with some math equation that assumes inverters last for 15 years without degradation, panels last for 25 years without degradation, maintenance costs are $0, costs for delivery of power during non-surplus periods are $0, temperature loss is zero, configuration error is zero, damage is zero, the panels are always completely clean, etc etc etc, but it's just absurd.
I have solar panels. I did not buy solar panels to break even. I knew at the time of purchasing that the marketing spreadsheets solar companies use to calculate your ROI are bullshit.
It has always been strange to watch people who don't have solar argue that it has a positive ROI or break even. And that's only trumped by the people who do have solar but don't actually pay attention to actual generation data and the relationship to their bill.
Going off grid is so expensive that the most important part of planning such a system is figuring out how to cut your energy usage way way down. That should tell you something.
By the way, I have a hybrid grid tie and battery system with about 4 days of autonomy with my normal daily usage. Even then there are 4 household items that are not on the circuit backed up with batteries: air conditioning, dishwasher, oven, and electric dryer. If I had electric heat that would be on there too. If I wanted to add these to my backed up circuit, it would dramatically increase the cost on an already very expensive system.
I don't think most people understand the scale at which batteries must improve for off grid to be viable.
Since you said you are looking at a system of your own, let me know if you have any questions. There is a lot of bullshit in this space and honestly the solar installers you talk to do not know as much as you might expect. They told me a lot of things I later determined for myself were simply not correct (and I don't think they were intentionally trying to mislead; they were just wrong).
SolarCity has bout 16,000 employees. 550 is a quarter of it's Nevada workforce. The article itself is poorly worded.
(yes, I work for SolarCity)