And the distribution and transmission prices are usually fixed. But I think they should float with supply and demand too: the drivers of upgrades and failures are the peak-time users of capacity.
That’s what we do with data, don’t know why we don’t do it with electrons.
Why yes, my intelligent electricity agent would like my dryer to book 2 kWh at 4AM-5AM with a 4cent penalty to me if you cancel.
Most of my loads are thermal, and I have lots of thermal banking available. If electricity prices are negative, run my A/C full tilt.
That's why believing in market forces alone is a little naive. There has to be a little nudge from the government.
Selling back to the grid is priced at the wholesale price: 4¢/kWh (slated for 5¢ early next year). It's sold at a loss, since consumer prices are about 10¢/kWh by night and 20¢/kWh by day. The ability to sell back does not move the needle on the payback period.
And note that Portugal is a sunny country. A panel works, on yearly average, 5h/day at full power. In central/northern Europe the numbers are probably worse.
Isn't this "selling at a loss" just the difference that the 10 / 20 c is after tax and you sell without tax, or do you have to add tax to the 10/20 c?
> If we breakdown prices, we realize that families in Portugal have the second highest tax burden in Europe (12 cents per kilowatt-hour).
But even then, the government changes at least every 4 years, how am I supposed to make a long term investment - (solar takes about 10 years for return on investment around here, with current regulation) - if I don't know if I will be screwed by the next administration? Especially now that the support for the "climate change denial party" is growing.
At least in the UK, the solar subsidies were set in stone for 20 years at the time of installation; so even though new solar would get little subsidy I'm still getting the rates from five years ago when I installed my system.
Of course this makes the value proposition for moving power into the grid much worse, but it changes precisely nothing for power that you use from your panels (you are still getting 20 cents worth of power from a panel that has already been paid for by you).
For this reason it is best to rely on the subsidy as little as possible and maximise the power you use directly from the panel, either by changing your habits or by storing the power for later (in a battery). Sadly using batteries adds additional costs to this picture and is not currently worth it at all, even without subsidies.
How does that work? A new government can change the law and decide otherwise, well at least that is what they do here.
Given that there is not yet (as far as I'm aware) a tax on kWh used entirely from solar panels (ie not coming from or going into the net, but taken directly from panel generation) it should not matter very much whether or not the government decides to subsidise you. Do not count on a solar panel installation company to make such complicated calculations for you, they are most busy with either sowing unrest about government regulations or (more likely) giving you a fair-weather calculation that involves subsidies forever.
But that is quite hard for most people to accomplish, most people are not at home during daytime when the panels generate most. The time my washing machine actually consumes energy warming up the water is relatively short.
The largest part of the power consumption of my home owners association is spent on lighting, the other part on the elevator which is most of the time just idling and peaks when someone uses it.
Batteries are inefficient and still expensive. You could warm up a boiler for hot water during day but I think that is done more efficiently with a heat collector instead of pv->electricity->heat. You can warm up your house, but you have to have very good insulation otherwise most energy is lost by the time you get home.
Anyway, in practice the change in policy can have a huge effect in return on investment time.
Anything can happen in 4 years.
Do you want to be part of the problem, or part of the solution?
To get to my job.
> Why leave the house?
> Why get a job?
So I can buy food and I won't starve.
> Why rent an apartment?
No clue, renting does not make sense to me, I bought.
> Anything can happen in 4 years.
Yes and you have to take that into account, make a risk analysis, think about the consequences and decided if it is worth it. Especially for long term investments. The chance my government will change the subsidy is certain (already announced), the consequences still unknown but they can turn out really bad. The chance they will turn out bad is large now that the two climate skeptic parties + the party that chooses economy over climate have a majority in the polls.
> Do you want to be part of the problem, or part of the solution?
Most people just don't have the money to spend on a problem which will not affect them for the next 10 years, unless it will benefit them.
With all due respect, the parent did not ask about the "most people". The question was about you.
Our plan was to use the maintenance fund to fund the panels. Money from the fund is not needed for the next 10 years, when the bitumen roof will need to be replaced. By that time the panels should have returned on its investment. Now let's say the laws will change and the panels will not return their investment, then all of a sudden everyone needs to put in a few k for replacing the roof, which, most of my fellow residents don't have.
About me: If I would have to choice to buy panels which will not return on it's investment, I'd probably spend the money on an electric car, solar thermal collector, heat pump, insulation, shower heat ex-changer or anything else which has a better roi.
Wow, I hope they like being under water.
Therefore it might not be best described as a market failure. It could be better described as a failure due to planning regulations that only give power to land-owners.
This is big problem in Europe, since as you point out: many people rent.
If a proposition for solar panels is actually realistic and a net positive, the owners should be easily convinced without resorting to force.
They do not pay for the electricity used in the property.
Therefore there is no way for it to be in their economic interests.
I would certainly pay a bit more in rent for a place where my energy use was subsidized by panels.
The incentives of the owner need to be aligned with the incentives of the tenant, that is the failure.
Either, as you point out, tenants need to be given powers to install solar panels, and given security of tenure to take advantage of the long term investment, (which seems to me would go further than mere planning regs). Or incentivise the owner to install solar panels, this seems more straight forward, although might not necessarily benefit the tenant.
In terms of concrete results the second one seemed like a likely candidate to me. Donating to them is unacceptable to me because they are based in the US and require a lot of personal information before they will accept a donation.
Another thing to consider is that supply and demand are not that well matched currently. Basically, there's no such thing as over production for batteries or solar panels currently and even installation is bottle-necked on availability of people to do that. That reflects in the pricing as well.
IMHO, the biggest change with solar is that energy cost goes from a variable cost to basically a fixed cost (one time investment in batteries + panels) + variable revenue (from selling excess energy) + variable cost for when your panels don't deliver enough juice. The market is still adapting to this and e.g. the ease of selling excess energy varies between markets.
Some companies are going to get more benefit than others. E.g. any companies operating vehicles will probably want to switch to EV. At that point charging them with their own solar panels becomes attractive; especially when combined with vehicle to grid revenue.
On the other hand, the recent California law about new houses needing solar panels is a step in the right direction.
Most regions limit how many competing providers may operate in the same area, requiring that they possess a license - of which legislation allows only a few or even just one to exist.
Vested interests, of course, won’t want to make serious investments in new infrastructure until they absolutely have to. Especially if they’re still making payments on their debt for building the current architecture.
Like the subsidies they've had for years?
Regardless, what are they going to do, come forcibly put solar panels on your roof? Keep them maintained? Repair them if a branch falls?
Second, I am sure there are many different ways to implement the nudge. Indeed, maybe instead of subsidizing solar we should rather stop subsidizing fossil.
Finally, talking about residential, currently almost every house has a gas pipe connected to it forcibly. And that pipe also requires maintenance. And sometimes gas leaks and your house blows up. And I don't see how forced solar would in theory be different to the current gas situation.
I still think there are some adaptations that could be done to mitigate that problem, but the grid seems simply not correctly set up to efficiently use the energy produced by millions of people generating a lot of power during the day and draining a lot at night.
Yes, it will be complicated, but these providers also think we all care about itemization of generation, transmission, distribution, power factor, grid line loss and debt retirement charges. I don’t, all I care about is fixed cost and variable cost.
Maybe let people overpay through some hedging contract if they prefer to pay an average price.
For me, I want my dryer, A/C, water heater, etc. to throttle up and down based on price to lower my bill overall without reducing quality of life.
Grid attached solar is a lot more attractive when your generation is at substantially at peak rates and your morning/evening grid usage is at part-peak or off-peak rates.
In former times there were generous subsidies for installing solar panels: You got, I think, a fixed amount per kWh that you installed on your roof and you also got a better price for the electricity that you put back into the grid. In Germany it's called "Einspeisevergütung" if I remember correctly.
This program was limited though, and now you have to pay for the panels all yourself (or you get only a little bonus from the state) and the prices for "selling" into the grid have fallen drastically because there's just too much electricity on sunny days and its sold for negative values on the international electricity markets.
Installing new solar panels on your roof is now only interesting when you can use the electricity for yourself. That means charging EVs, filling battery-powered storage (also expensive and not subsidized, I think) or using the electricity around and in your house.
If you've got an older installation you might benefit from the old tariffs and get a little bit more money, but building new systems is rather uninteresting for private households.
With rising prices for electricity there will be new "motivation" for installing new solar systems on your house. But as already said, only for using the electricity for yourself.
Also a law was changed recently, so that renters can now install their own "balcony solar systems" (one panel for example) and feed that electricity right back into their grid through the wall outlet. This is only allowed with small systems though, so that you may produce enough energy for your household base load, but not make your meter turn backwards.
In the bigger picture all of this shows how Germany has, so far, failed to do a real switch to renewable energies or really take a step into that direction.
We got lots of solar systems and lots of wind turbines, but we are not able to store the produced electricity for later use. So lots of wind turbines are turned out of the wind, because there's an overproduction of electricity on windy days. And prices for solar generated electricity have dropped, as already mentioned.
Meanwhile the four large energy companies in Germany are doing what they want and are holding the government as hostage.
Chopping down woods without any need, because some coal-fired power stations needs to be run because we could otherwise lose 20.000 jobs all over Germany.
Nobody thinks about how many jobs we could create with a heavy switch and investment in renewable energies and storage solutions for energy.
After all, taking a step backwards it's kind of a sad situation.
And if we got that going for us, neither coal nor nuclear are needed anymore. Probably.
(Although I'm all in for new nuclear technologies I think our aging reactors are nothing to be proud of. Maybe we could create new jobs in fusion reactor research and development, too. I'd like that.)
> (Although I'm all in for new nuclear technologies I think our aging reactors are nothing to be proud of. Maybe we could create new jobs in fusion reactor research and development, too. I'd like that.)
I think nuclear will be too expensive by the time new plants would be built - 10+ years judging by the projects in the UK and Finland. Germany would be at least as slow as them, especially with the strong anti-nuclear sentiment locally, which would probably lead to ongoing protests and lawsuits.
They dominate the market, have Germany split up amongst them and are crying and threatening with job losses at the slightest sign of change.
Interesting fact (taken from the linked Wiki article): Those big four had less than 10% market share in renewables in 2013. Not sure about now, but numbers might not look much better.
They are the ones that operate coal and nuclear power plants and are not interested in any change whatsoever.
The renewable fraction in both cases is just over 30%, but the UK has managed to phase out coal in favour of lower-carbon gas. UK prices average around €0.14 per kWh. Maybe the difference is made up by wind, but there Germany has a huge domestic champion: Siemens.
There is less resistance to offshore wind projects and to small scale distributed solar. Both of these generating resources are more expensive than onshore wind farms.
Even in the matter of distributed solar, note that the peak installation rate was back in 2012:
Germany not only installed a lot of a particularly expensive kind of renewable capacity (distributed solar). It did most of that installation some time ago when it was even more expensive to install. And it did so in a very sunlight-constrained climate, so each kilowatt of capacity generates much less energy than in Italy, Spain, or the US. Since industry threatened to just relocate if higher electricity costs were passed on, residential and commercial electricity customers have borne the financial brunt of the renewable buildout while heavy industry was spared.
The UK did better by phasing out coal in favor of gas faster than Germany and not installing significant solar capacity until the hardware had become much cheaper. The UK's renewable additions were almost exclusively wind until 2011. The UK started deploying significant solar several years later than Germany:
Between deliberately choosing to pioneer solar PV installations in a low-sun country, phasing out nuclear power, and acting to placate the powerful domestic coal lobby, Germany has really spent a lot of money to accomplish a very modest degree of decarbonization.
Building renewable energy sources doesn't pay off at the moment, so nobody is interested in doing so. If that gets fixed, the amount of renewable energy sources will rise.
I'm looking at the same problem with my parents' house at the moment. Just putting some panels on the roof won't help with anything. You need a concept for the whole house and making that is just lots of work. If people could just spend X Euro and be sure to have the money back in 5 years because they can sell the electricity or whatever, lots of people would be in, I'm sure.
I know some villages are trying to found a cooperative, crowdfund some money and build their own wind turbine somewhere outside in the hills near the village, before some big company does it. They are looking to collect and lend 6 million Euro for a 3.5 MW, 130 meter wind turbine .
If solar actually represented a better deal companies would be falling over themselves to install solar panels everywhere. It is likely that there are important realities or risks that the analysts have missed.
Either that, or someone is going to make a killing installing solar panels on a lease-to-buy basis.
It is an exaggeration, and it's mostly on the consumption side, not production. Why does the OECD come up with $150-$200BB a year in subsidies? Why is the IEA estimate ~$400BB?:
The IMF report says a whopping $4.6TT of the $5.2TT are "externalities". I think we all agree externalities exist, but externalities are not subsidies, nor are they easy to price.
Obviously, on-road fuel is not currently competing with solar panels.
Before solar, utility companies would install baseload plants (nuclear, coal, AFAIK) which output power at a constant rate for cheap. The idea is that your baseload plants would provide power right up to the trough of the demand curves.
Solar causes that trough to deepen but doesn't get rid of the peaks (see duck curve). That forces power companies to close down baseload plants, but add peaker plants (usually natural gas) which are generally more expensive to operate.
This is where grid storage enters for a green grid. It brings two benefits, it can raise the demand trough making baseload plants attractive. It can also drop the demand peak, decreasing the need for additional peakers plants.
The problem is that we don't have a lot of viable storage options. Best case for a region is having a lot of hydro available. Pumped hydro would make sense, but there aren't many places where you can install it (it requires a lot of water, land, local buy-in). Batteries work, but have cycle limitations. You could do flywheels, but they are expensive for the power stored. Heck, one even seen "fill a pit with gravel, heat it up, boil water during peaks to generate power". Which may make sense, particularly for colder regions where that heat could also heat housing.
Electrical utility companies manage this with two major levers:
1) Standby power plants, that are running but not producing at full load. The plant load is actively adapted to the monitored needs of the grid.
2) Hydroelectric storage, to soak up excess production, where hydroelectric dams with secondary reservoirs are available.
Grid load management is very much an active process, not a passive self-correcting one.
When the net frequency increases so does the rotating speed of all turbines. The inertia of those turbines is one way how excess energy is buffered.
While electronic componentes are making big steps in that direction, "classic" mechanical generators are still superior for this as they are running very constant.
That's why lots of people fear that solar panels with their sudden power generation (as in "clouds are gone, let's bring it on!") might be a danger to the grid as they are fluctuating quite a bit.
So to balance the supply of electricity to customers you need a way to make sure there is an not too much and not too little.
Many years ago in Britain, it was predictable that at the end of the TV show Eastenders, people would all go to turn on their kettle for Tea. The surge was so big that someone had to monitor when the programme ended and initiate the additional supply of electricity to meet demand. That supply even had electricity from France as a backup.
I recall an interview where they had that energy available from a Hydroelectric Power Station where they could release the water and get an instant source of electricity.
All for tea.
Edit: fixed wording
p.s. As it contributes to/drives climate change, we might as well include storm damage and such with the cost of oil.
And thus, the first foreign country for POTUS DJT to visit was Saudi Arabia.
1991 was fought over the oil, 2003 was fought over ideology and wishful thinking.
All gas and oil has fugitive C02 issues. Look what happened with that gas storage well in California which had months long leaks. Were the owners required to offset the extra CO2? Or the gulf oil leaks which have been continuously flowing since the sixties? Or tar sands?
Nobody budgets the remediation cost into the unit cost of the energy.
First, oil-based energy doesn't compete with solar to a large extent. That will change as EVs get more popular, but outside of islands like Hawaii, oil isn't used much for electricity generation (where solar competes).
Second, solar is already attractive for most new generation scenarios in many locations, including dispactchable situations where you also need storage. It's getting so cheap that it's starting to compete with existing generation.
Remember when it was leaders from communist countries believing the US supermarkets were fake?
I think it would be more productive to dissect the particular nuances of this issue, as other comments have