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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...
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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.
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
It's possible, but will require a hundred kwh of batteries to power your AC though the night during monsoon season in AZ
"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.
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..
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.