It never made sense to give rooftop solar owners a free unlimited battery via selling to the grid at or near retail price. Selling power to the grid should always pay wholesale price so that the poor who can't afford panels aren't subsidizing the rich who get inflated rates for their generation. Also incentivizes battery installs which is the next step needed to make renewables scale.
This argument doesn't hold. The effect that you are shooting for is that you minimize the damage to the planet. Having some people use the grid as an 'unlimited free battery' is a fantastic way to achieve the exact same effect as if all those people invest in large physical batteries without the investment and without the environmental impact.
This sort of thing should be incentivized rather than discouraged because of the large scale effects, not because of petty accounting rules or by creating jealousy where there isn't ground for any: poor people without panels aren't subsidizing the rich, they are effectively not subsidizing the energy companies, which are far, far richer than the people with rooftop solar. It's citizens generating power for other citizens at the price that the market dictates. The thing to hope for is that enough of this will eventually lead to a reduction in retail prices rather than that we allow the energy companies to make money off surplus from one citizen sold to the next.
Batteries are nice, reduced grid generation requirement during daylight hours is even better. And that's before we get into fire risks of large battery installations, space requirements, depreciation, recycling and so on.
Let’s say everybody had rooftop solar and net metering. Everybody produces an excess of energy during the day which they give to the grid, then at night they start pulling energy from the grid. They could very well have a net energy consumption of 0 and pay very little. But someone, somewhere that is connected to the grid has to be doing something to provide that energy at night, whether it’s batteries or a gas peaker plant or pumped hydro or whatever.
Who is going to pay for all that power if none of the consumers are?
At least in that thought experiment, everybody gets to pay little for electricity. But in the real world not everybody can install solar (I live in an apartment building, others in less sunny areas) and not everybody can afford it. So I don’t end up with a net 0 bill and get charged the actual per-kwh rates, which the utility company sets to recoup their costs. Sure I use energy just like the zero-metered folks, but I have to pay full price while they pay very little relative to what it actually costs to give them power when the Sun is down, so I end up subsidizing them.
> Who is going to pay for all that power if none of the consumers are?
The consumers of course, that is assuming the grid uses an hourly rate. When all those roof top solar arrays push power into the grid the price goes down, possibly even below zero - you'd have to pay to push power into the grid and "get paid" [1] to consume power - if the grid is close to capacity. During the night they draw power from the grid and pay the hourly rate which may be - but does not have to be - higher than the rates paid when the sun was up.
What if the grid gets more power in during the day than can be delivered to customers? They can use it to charge their "grid-scale" battery which they use during the peak hours in the evening when everyone comes home, turns on whatever power-hungry devices they have. That battery will save them a lot of money compared to the gas-turbine peak power plant they'd otherwise have to use.
In a hypothetical situation where everyone has enough solar capacity installed to cover their own needs it will be more efficient to have those batteries installed as close as possible to where the power is needed, i.e. in individual homes or possibly at local transformer stations. I don't think they're there yet nor will they ever be able to get there in urban environments with largely multi-storied buildings.
Here in Hawaii the electric company is installing smart meters so they can charge different rates during the day evening and night. So your solar production during the day will credit you at the day rate, then your usage in the evening charges you at the evening rates (about triple the day rate). And then late night usage is about double the day rate.
This mostly solves the retail/wholesale/base rate problem.
You can't push energy into the grid at will, there is simply an upper limit where the inverter will stop raising the voltage and leading the grid phase. So for the grid to accept your power it has to have a drain somewhere.
You should look beyond the short-term consequences. Net metering is a benefit to well-off homeowners. Such benefits can be difficult to take back when they are no longer useful, because those are the people who vote. That means you should avoid creating them unless you are sure of the long-term consequences.
The question is not how net metering affects a grid still dominated by fossil fuels but how it works in a grid dominated by renewables. Some European countries are already getting there, so this is not hypothetical.
When you have a period of high generation overlapping with a period of average demand, electricity is cheap. Paying a fraction of a cent for a kWh is common. When you get high generation and low demand, the prices can even go negative. On the other hand, when you have low generation and high demand, power becomes expensive and you may have to pay tens of cents for each kWh. If you have net metering, the power you sell to the grid is worth much less than the power you buy from it.
One of the key tools for dealing with the variability of renewable energy is shifting demand that is insensitive to time of use automatically. Instead of buying expensive power now, you buy cheaper power hours or perhaps even days later. But if you have net metering, that does not concern you. You can keep using power as usual, because the price you pay is fixed.
That can make net metering an incentive for inefficiency.
As an owner of solar panels, I agree - prices were negative today in the Netherlands and I made money by delivering electricity to the grid. Solar panels are extremely easy to disconnect, but this is only done at big commercial sites due to net metering
Most helpful thing for the environment would be for big solar facilities to handle all this instead of individual homeowners. It's less efficient trying to make people run their own mini power plants.
Yep. Centralized solutions can be implemented in a more efficient manner, and don't rely on convincing millions of apathetic individuals to both care and directly spend their money.
Power transmission infrastructure isn't exactly free and if centralized solutions are that much more efficient then how come I can generate my own power for about 7% or so of what it retails for?
Because someone else is footing the bill for the infrastructure that supplies your house when your solar panels aren't producing. It is a classic Free Rider situation.
If the home solar were so efficient, then it'd be happening without subsidies. Even with them, break-even point is pretty long. What does your 7% figure include?
It is happening without subsidies, at least here in Sweden. I put ~14.5 kW of panels on a barn roof last year without any need for subsidies because I can calculate the payback period on my own 10 fingers. Panels are affordable, inverters are still fairly expensive but a bit of shopping around can give remarkable results. It helps that I did all the work myself and got an electrician to sign off on it - he was impressed and had no problems doing so - but even when you can not do so the payback is still clearly within the lifetime of the system.
As it stands now we get to sell power at wholesale rates for the coming 5 years after which we need to renew the contract. If by that time the rules are changed we get a storage battery - I got a hybrid inverter for this purpose - and will start using excess power during the dark hours instead of selling it when it is produced. By that time I expect batteries to have come down in price and/or wholesale prices to have gone up sufficiently for this to be economically feasible, i.e. for the total power stored in them over all charge cycles to come out less expensive than power bought from the distribution network. This is not yet the case but I can wait.
So if you took a loan for the entire initial investment, when would you break even? In California there are subsidies, and home solar wasn't happening without them before.
I never take loans other than a mortgage (which I paid off), instead I use money I saved up. If you have to take out a loan för the installation the calculation would change depending on how much the sharks take.
The installation produces between 12.000 and 15.000 kWh per year which either is used directly (about 1/3) or sold at wholesale rate. Price for 1 kWh varies between ~1.50kr and ~5kr, last winter there were some extremes going up to more than 10kr. The minimum of 1.50kr occurs when electricity is basically free and constitutes taxes and surcharges which are always levied. Average price paid per kWh lies somewhere between 2kr and 4kr. With an average self-consumption of about 1/3 of the production, i.e. 4000-5000 kWh this saves ~13.500kr/year. The rest is sold at market rate plus an additional 0.31kr/kWh feed-in payment from the network operator, the total average ends up somewhere around 1kr/kWh giving around 9000kr/year for a yearly total (savings+income) of ~22.500kr/year. The total cost for the installation was ~130.000kr (66.700kr for the panels, 27.500kr för the inverter, 21.500kr for the mounting hardware, 5000kr for the cables (about half of which is not used yet, meant for future extension), 6000kr for electrical hardware like overcurrent protection, fusing and AC breaker plus a bit for screws, clips and nails.
Without compound interest the payback period is 5.7 years, with current low interest levels it is not much more.
I can probably deduct part of the investment from taxes so this will bring down the payback period even more, in the end it will be somewhere around 5 years.
Appreciate the detailed calculations. My coworkers in California were quoting worse, but they probably paid for installation labor.
> I never take loans other than a mortgage (which I paid off), instead I use money I saved up
So opportunity-cost-wise, you'd have to otherwise invest in something that doubles in value over ~a decade. That's hit-or-miss with stocks in the US at least, so 5.7y break-even on this sounds decent.
Mine is without subsidies. And the break even may be 'pretty long' but it still has a higher ROI than any other thing I could have possibly done with my money.
My 7% figure includes TCO / total expected power generated over the lifetime of the system. Note that this isn't the first system I put together but it is by far the largest.
Transmission losses are far lower than the cost of residential solar. National Grid transmission losses are around 5% of delivered power, while rooftop solar producers are paid 10 to 20 x the cost of commercial power production.
Similarly, infrastructure and maintenance costs are fixed unless you are willing to go without power on a cloudy day or throughout the winter.
Wait, what? :googles around: Ahhhh - the number living in my head from EE classes back on college was much, much higher - but apparently that's overall, not transmission:
Right, right. My first expectation is that residential power usage is less on cloudy days, since lower AC needs. But, you're right to point out what you're pointing out - the drop in rooftop solar might be much greater than the corresponding drop in AC usage.
My second expectation is that residential CA solar is almost entirely in places that don't get "winter" - which I guess in this case means 1) storms covering the sky and/or panels, 2) cold enough that heating power usage is significant, and 3) sun being lower in the sky means a reduction in power (I don't know how much tho)
>My second expectation is that residential CA solar is almost entirely in places that don't get "winter"
Being in a cloudless area doesnt protect you from the rotation of the earth around the sun. Day length and solar angle still change. Even with ideal weather, California gets 50% less solar radiation in winter. Add weather on top and it is pretty typcial to get 10-20% of rooftop power in the winter.
This means that the grid needs to be able to import 100% of the power when needed.
Building and mainating the grid is essentially a fixed cost. Using the grid doesn't cost anything.
Solar makes sense given that there is a big power load in the summers when the sun is shining. What doesn't make sense is buying power for $0.40/kWh from a homeowner mid summer when you have a grid connected power plant selling it for $0.02. We paid for the grid and need it either way, so we should use it.
> My second expectation is that residential CA solar is almost entirely in places that don't get "winter" - which I guess in this case means 1) storms covering the sky and/or panels, 2) cold enough that heating power usage is significant, and 3) sun being lower in the sky means a reduction in power (I don't know how much tho)
Er, every part of California has #3 (that’s just latitude), though its somewhat true that #2 and #1 are anticorrelated in that the coastal areas have more cloud cover but more moderate temperature and the inland valleys have more extreme temperatures (summer highs and winter lows) but less cloud cover, so much of the state doesnt get a the combinatiom of #1 and #2.
I see a lot of Palo Alto solar panels on top of fancy houses with a nice amount of shade from trees. And Bay Area in general isn't all that sunny like inland CA.
you also have to consider population distribution. Most people live on the coast with more cloud cover. This means rooftop solar is naturally distrubuted where it is less productive.
This is one of many reasons why commerical solar is not buit on the coasts.
> Most people live on the coast with more cloud cover. This means rooftop solar is naturally distrubuted where it is less productive.
This assumes square meters of solar panels are distributed the same as population, which even as a first order approximation sounds highly suspect. An 800 sq. ft. apartment in San Francisco might house as many people as a 2,500 sq. ft. single floor house on a half-acre in the valley, but it won't support the same size solar array.
I agree with your general point, but I think it is over shadowed by the sheer number of people adjacent to the coast. I wasn't able to dig it up easily, but I believe that if you looked at installed residential panel area, it would be strongly biased towards the coastal regions which contain the vast majority of the population.
Depends what you mean by “on the coast”? Some of the ways that the microclimates work - well, this last weekend west of the 405 in Los Angeles was driving into a wall of fog, but east of that was sunny and clear. In the Bay, crossing the Oakland hills might still count as “coastal” by distance, but the fog (generally) doesn’t cross as well (best as I remember, anyway)
Transmission loss is little. The bigger issue is the cost of maintaining transmission lines, but that's a problem we need to solve either way. Which PG&E has done a horrible job at.
Less efficient but more reliable, like software. The future of the grid should be many small generators and energy storage installations spread throughout the communities they service, not many large farms with requirements for huge transmission infrastructure. Spreading generation and storage will achieve more reliability than efficiency, sure, but when you're generating off solar or wind, who cares if it's efficient?
The efficiency matters cause of the cost and waste of panels and maintenance. I don't know exactly how expensive transmission is, but there's probably a reason wind/solar power plants are so big and centralized rather than being smaller and spread out closer to homes, which must still be far more efficient than homeowners doing the job.
About reliability, the transmission network still needs to handle peak load during a cloudy week. At least A/C usage would be lower then.
Speaking of software, crowd computing via widely distributed CPU-heavy jobs to home PCs is fading away. It's just so much more efficient to do that stuff in a datacenter, especially if there are specialized accelerators involved.
On the last note, most companies in the building management software industry these days run a computer at the edge so that if there is no connectivity they can still process the control signals on-site. It was common a few years ago for us to be doing it in the cloud, but today it's starting to cost a lot more due to the massive numbers of buildings installing BMSes, and therefore these same companies are shifting to "edge computing" for as much of the site control as possible. Only analytics that cut across customers or aggregations and data storage are done in the cloud, and even then we're all trying to push as much as we can to the edge. My company is specifically rebuilding our infra to push the control loop and everything else we can to the site edge computer because doing it in the cloud is not efficient for our cost structure, and we have a $1000 industrial PC sitting there already, so why not use it?
As far as distribution goes, the goal is to not need long-distance transmission infra in the future, via a mix of several types of renewables, energy storage, and even adding some emergency carbon generation in the mix if required. Today we need the transmission infra, but the goal is to reduce that by an order of magnitude which will reduce costs and maintenance by at least the same amount.
> when you're generating off solar or wind, who cares if it's efficient
Whoever pays for the electricity, most likely.
If you don't connect neighborhoods and each block or even house is an off-grid island, your reliability will suffer because you'll need large margins everywhere. If you do connect them, you have that "transmission infrastructure".
Rooftop is great because it gives you a feeling of security and being self-sustaining, but if you want impact, it's probably much more efficient to have technicians install panels en masse at large installations than do one-off jobs on all those custom homes.
This is true, but with electric cars becoming more and more widespread local generation is having a measurable impact on daytime generation. It also offloads the grid because every KWh generated locally and consumed relatively locally doesn't need long haul transmission, as opposed to 'large installations'.
You can reduce transmission infra considerably, probably not eliminate it though. I am not advocating for islanding, I am advocating for something like the internet's smartly distributed network for the power grid. I do work in the industry, so while I'm not completely knowledgeable I do have knowledge that makes me think this is the way for the future. You're not going to eliminate all centralized generation, of course, especially for solar! However, smaller installations of solar, wind, batteries, and etc. are useful for reducing the transmission grid requirements and increasing reliability and distribution capabilities. If you do end up with transmission lines disconnected, it's a good idea to have some capability to island and generate some portion of the power locally.
I say "who cares" about efficiency, because the efficiency gains on the technologies involved with distributed grids and the cost reductions over time will make it "not matter much" because it will be relative pennies compared to today's infrastructure. It will be worth it to overbuild the distributed infrastructure in order to achieve better reliability. Energy is a necessity today, and will be a literal life-saver when climate change causes massive shifts in the climate where people currently live and won't want to abandon. We have to make it more reliable than it is with today's centralized system.
tl;dr: I am advocating for more distributed hardware + software that will make the grid more reliable in the face of disconnections and transmission infra failure, not distributing generation completely to the end-user thus requiring them to generate their own power, only a portion of it.
Exactly. And incentivizing private individuals to put their money on the line to accelerate the energy transition is good for everybody, especially future generations.
Land use also matters - these roof right now are a waste of space and energy because there’s nothing on them doing anything useful except heating up in the summer, requiring more AC and various materials to try and keep them cooler. Using this unused space for energy generation is better than not using this space and transforming spaces that could otherwise be dedicated to nature or food production.
No, the most helpful thing for the environment is to deploy solar anywhere it will fit as fast as we possibly can until CO2 emissions from electricity are driven to 0.
For the last decade, deployment of rooftop solar has chugged along at a steady pace while utility-scale solar projects have been bogged down by red tape and disinformation campaigns. So rooftops have been and will likely remain the fastest deployment target.
The planet was already out of time for perfect solutions at the turn of this century. Now is the time for pragmatism.
There's still an incentive. A smaller one, yes. I'm not sure how paying wholesale for generation instead of retail would change "citizens generating power for others at the rate the market dictates" - it seems like the wholesale one is much more in line with that rate. If there was never the super-generous payouts for excess power would we be having this discussion?
I'm not convinced of the doom and gloom about the change since it's coming from highly-invested people.
It's not 'super generous', it is a wash. And yes, you'd have the same problem but you'd also have more fires and a fair sized environmental problem. Having an inverter to recycle every decade or so is one thing (assuming it can't be cost effectively repaired), having to do the same thing with a 50 KWh battery is another matter entirely.
Isn't today's situation the utility paying a retail rate for something with a much lower wholesale replacement cost?
That doesn't seem like a wash to me.
EDIT: I'm not a big fan of "a battery in every garage" but I would much rather see subsidies of planned large-scale green power generation vs a shotgun of individual solar installs.
> Isn't today's situation the utility paying a retail rate for something with a much lower wholesale replacement cost?
Indeed, the utility will be making less profit. But the wholesale replacement cost is based on a market that the consumer doesn't have access to, they can only buy 'retail' so allowing them to sell their excess power back to the grid at that same price makes good sense.
> That doesn't seem like a wash to me.
From the POV of the electricity company it obviously isn't, which is why this was a politically imposed rule. But the power companies have a lot of lobbying power and that is why this is changed, not because it is good for the environment or 'more fair'. It's simply a matter of more money for the utilities.
> I'm not a big fan of "a battery in every garage" but I would much rather see subsidies of planned large-scale green power generation vs a shotgun of individual solar installs.
I actually am a huge fan of individual solar installs: it forces people to focus on their own consumption and their own habits rather than to see everything in terms of a couple of numbers. Once you realize how much you have to invest in order to generate a KWh you will most likely be more careful about how you use that, and conservation, not generation and definitely not storage has the biggest positive effect on the environment.
One man's "the utility will be making less profit" is another "the utility will invest less in the infrastructure" especially in the case of municipal utilities.
I think bundling in "maybe utilities won't spend their revenue wisely" is a distraction; if that's the big problem, that we're worried about what they're doing with the money they get from feeds, let's start pushing for that specifically.
> I actually am a huge fan of individual solar installs: it forces people to focus on their own consumption and their own habits rather than to see everything in terms of a couple of numbers. Once you realize how much you have to invest in order to generate a KWh you will most likely be more careful about how you use that, and conservation, not generation and definitely not storage has the biggest positive effect on the environment.
I think the current metering discourages that. Getting paid for excess at higher rates means you can get away with higher overall use to make back the same amount of $$$. Do you have any numbers on "total KWH used" for households with solar vs without solar?
I have my own. And the numbers are pretty much in line with my comments upthread: up to my own consumption net metering helps to keep things balanced, my own consumption is 1/3rd of what it was before going all in on renewables and the excess part doesn't move the needle so now I will install an air/air heatpump to create even more of an offset.
I'm trying to get to completely neutral before the end of next year but in the winter this is going to be hard, especially without net metering.
Ah, yeah, my behavior is the opposite. If we had solar we would probably close the windows more and use the heat pump/AC more, for starters. Or defer new windows / insulation for longer... "I have more, so I can use more."
Insulation is a good ROI, new windows too if you have really crappy ones but we already have fairly good ones but bad frames so that will come after the insulation and the heat pump are in place. Altogether it's a 75K project and it will cut the power bill from $1500 / month or so to $100 to $200. That's at present day power prices, which are still very high here, the changes so far have cut that 1500 to 750 so there is still a ways to go to the goal.
I really hope to be able to get rid of the gas, that's the biggest dependency that I would like to remove.
Ooh the power bill context really makes the difference in approach make sense.
We're under $100 most months, so very different incentives for sure. Small house, good breezes, very new heat pump.
So even something like better insulation has issues that make me wary - if not done right, could be more condensation problems inside the walls, so probably would want to redo the full sheathing too, and then might as well do more, etc, etc...
>It's citizens generating power for other citizens at the price that the market dictates.
This is exactly what it isn't. It wasn't the market price. Homeowners were getting 10 to 20 x the wholesale price, not because the market wanted it, but because Regulators forced companies to buy it.
If it's about saving the planet, then buy commercial solar for 10 cents on the dollar. If it's about freeloading, then continue to make others pay for the overpriced gadget on your roof
It'd be pretty feel bad if the big wealthy energy company got to buy your power for a pittance then resell it to someone else for a big profit, to the point that I'd run a device to burn down any net power rather than let them sell it.
Big wealthy energy company is already buying power for a pittance and reselling it to someone else for a big profit. That's how wholesale and retail markets work. Why should they be forced to buy from you when a generation company will sell for 10 cents on the dollar?
Because that's the best for the environment. If you are only focused on the money then that's fine but in the end that is what got us in this mess. So I propose that instead we look at what's best rather than at what makes companies the most profit for a change.
You keep saying that but it's not best for the environment. What's best for the environment would be buying commercial solar with 10% the cost and 10% of the waste
Well, the real market solution is to permit the provider to buy the electricity off the market where they can and sell the electricity off the market where they can.
The provider will likely buy at the cheapest place they can and sell at the most expensive place. It is definitely a market inefficiency to require them to buy at the same price they sell.
Which is also what they pay. If consumers can only buy at retail it makes good sense that they can also only sell at retail.
This is how secondary markets are valued for every other good so that makes good sense for electricity. I don't see why you'd want to disincentivize private individuals from energy generation while at the same time guaranteeing a revenue stream for very large corporates that are doing just fine without that help. Of course they are lobbying against that and of course they will do everything they can to buy 'at wholesale' from installations that have been financed by others.
What netmetering shows you is how broken the market model is, retail should never be 10 to 20x the wholesale / production price. You are defending price gouging.
This is not how it works for other goods. This is like saying a baker must buy flour or expired milk for the price their consumers buy a cake.
If you wanted to treat it as a secondary market, then solar owners should have to pay for the delivery of power, and spot pricing. They would get close to nothing a peak generation hours, and pay top dollar at peak consumption.
The way power regulation works in california is power companies have a fixed profit margin. Every penny they pay over market price for rooftop solar is passed on to other consumers without it. Those consumers could be getting that power 90% cheaper.
Wait until you discover that it's all the same electrons doing the work. Back and forth, all day long... And no, they don't get dirty, like toilet paper would.
CA’s retail electricity prices are so completely disconnected from actual costs that trying to choose a notionally correct price for selling to the grid seems impossible.
Look, you can literally order your rate schedule off a menu!
Of course, supplying you costs the same amount regardless of which appetizer or entree you order. The times of day that are cheapest and the times of day that are the lowest-carbon for the grid have nothing to do with which time of use tariff you happen to get billed.
Here’s E-6, a common residential schedule, and you can look at the utterly insane 53 cent/kWh top rate and its unbundling:
So that’s 27 cents for peak summer generation. Surely, if you sell PG&E a kWh during peak time, they can avoid buying a peak 27 cents of power, which IMO they should pay you for. (Or they should *stop pretending it costs 27 cents to buy this power in the first place!)
I will grant that PG&E still has to pay to distribute the power you sell them. Fine, although their distribution rates are still nuts. They must be taking a page from AWS’s playbook here. Maybe they shouldn’t pay you that whole amount when you sell them power.
Oh, and it apparently only costs PG&E to generate 27 cents to generate that peak summer kWh for agricultural users. Go figure. And all these numbers are 5-10x the LCoE of basically any type of new generation.
edit: Santa Clara sells power for about 14 cents/kWh, all in, for residential users:
The configurable time of use pricing is still probably useful for PG&E and indirectly consumers. If they know X% of customers here and Y% there are on a certain plan they’re somewhat incentivized to work around, they can use that to predict demand and incentivize some kind of useful demand pattern
Not true. Net metering incentives distributed generation, reduces transmission infra costs, but of course is ideal when the utility backfills with cleaner firm generation (California has no domestic coal generation and imports minimal amounts of coal fired power per ElectricityMap.org). You export excess solar when overproducing, and then can pull that kWh back from an energy source that can be stored (batteries, fossil gas, hydro).
High level, high renewables penetration destroy the economics of slow throttle generators like coal and nuclear, but are ideal to pair with fast throttle fossil gas, which will then face stranding as utility scale battery manufacturing and deployment ramps. Batteries are key (and an expectation of some amount of tolerable clean energy overproduction), we’re just haggling over who is paying for them (retail electric or utilities).
Like EVs (high end vehicles paid for manufacturing capacity ramp for lower value vehicles), wealthy people who buy solar and receive tax benefits not only generate clean power for themselves, but also export clean power to the grid and drive system efficiency improvements that will trickle down to those of lesser means with regards to rooftop solar (or community solar for folks without space for roof or ground mount solar).
> distributed generation, reduces transmission infra costs
Distributed generation does reduce transmission costs slightly, but nowhere near in line with the amount of credit being given. Transmission costs mostly scale with the maximum power demand and the reliability needed, not with actual power delivered. Billing for distribution and grid reliability with a usage-based charge made sense when the power company was an absolute monopoly, but it doesn't with distributed power. Grid connectivity and distribution should be billed as a flat rate, or based on the size of the mains connection. That would be more in line with the actual costs.
IMHO this is where the incentives are poorly aligned. The power companies should be offering incentives for people to install home battery systems but only if they are configured to act as a virtual peaker plant. IE the power company gets to decide when the battery is discharged to the grid. Maybe the power company buys the batteries and the homeowner pays the install cost.
The homeowner gets a backup that works when the power is out, and the power company doesn't have to build and run expensive peaker plants and can further defer upgrading the backhaul lines. Total cost is higher than grid scale battery backup, but since the price is split it should be cheaper for the utility and also the grid scale battery storage doesn't help the backhaul problem.
In the past the problem was that we simply were not making enough batteries so the market price was too high, but with battery production rapidly ramping up this should be practical if not now then within just a year or two.
I've seen stories of isolated pockets of California where they do this and the people on the program are making out like bandits, paying off their battery systems in just a couple of years and raking it in after that.
This has to be cost the power company an arm and a leg. It seems like it just won't be sustainable.
No, it's not making the power companies money. It's perfectly sustainable, the only thing you need for this to work is the local interconnect. The power company should charge a marginal transmission fee, instead they are trying to take power at a fraction of the cost and then add their own profits. If I can roll out an extension cord to my neighbor rather than to sell my excess power to the grid and then have my neighbor buy it at 7 times my price then I'll do just that. The power company doesn't have an automatic right to a business model or profits.
From what I've seen of grid tied battery systems this has not been the case. Install costs are substantial although the market has been pretty small thus far. I'm not an insider though, I can only go on official statements and watching what the industry actually does.
Thank you for the links, looking forward to diving in.
> You export excess solar when overproducing, and then can pull that kWh back from an energy source that can be stored.
Well the issue is that storing energy is expensive. Electricity is much cheaper to generate during the day because solar is such an economical way to generate electricity, but it's much more expensive at night. 1 kwh during the day != 1 kwh at night, so it doesn't make a ton of sense to allow grid users to trade day usage for night usage. There are definitely upsides to distributed solar, but I can't see how it doesn't end up in a state of "rich people install enough solar to have 0 net usage and poor people need to pick up the slack so that utility profits don't fall." And make no mistake, utility profits will not fall. They're a government regulated monopoly, their profits are essentially locked in unless something catastrophic happens (which to be fair has been happening to pg&e, but that's separate).
Isn't it the case that electricity is cheaper at night because of lower overall usage? Wouldn't that make trading peak daytime electricity for nighttime electricity worth it?
Net metering is the grid paying retail for produced electricity.
Peak electricity prices are from 4pm to 9pm, so there would be some benefits of using the battery to discharge then versus pushing it back onto the grid earlier times of the day.
All that may be true in broad strokes, but it still doesn’t mean that the retail price is the right price in any specific situation.
The value of the electricity depends on when and where it’s generated. Depending on time of day, what other power sources are available, and where it is on the grid, it might be higher or lower.
Compromise: the net metering utilities must pay out is a function of their renewable generation. So a 100% renewable producer doesn’t pay, while a dirty one does. Not sure if we’d make the payout to homeowners variable, redistribute the unpaid amount to the dirty producers, or have a subsidy kick in from the public coffer.
> pay wholesale price so that the poor who can't afford panels aren't subsidizing the rich
The poor are already heavily subsidizing the rich for both electricity and water via base charges and fees. Imagine a poor household of 800sq ft with nighttime open windows for cooling vs. a 4500sq ft rich household with always-on AC. They're both paying the same base charges and fees, artificially lowering the cost-per-kWh of energy. While the rich household is using 10x more electricity, they're not paying 10x as much. So the poor are subsidizing the rich. The greater the base charges, the more money taken from the poor and given to the rich.
Moreover, this scheme financially disincentivizes usage reduction, as the savings on the bill don't properly track efforts made by the resident. You can (and should!) reduce your usage by 50%, but you won't save 50%.
So in short, base fees move money from the poor to the rich while financially disincentivizing reducing energy usage, thereby accelerating climate change.
We need to do the opposite by removing all base charges/fees and protecting net metering. We have to financially incentivize actions that allow us to have a future.
> While the rich household is using 10x more electricity, they're not paying 10x as much. So the poor are subsidizing the rich. The greater the base charges, the more money taken from the poor and given to the rich.
You're correct about base fees, but your conclusion is incorrect.
PG&E power plans are tiered or at least have a baseline allowance. The baseline allowance gives you power that's roughly 8c/kWh cheaper, or about 20%. The more you use, the more of your usage is in the higher tier. It used to be a 4-tier system.
The only way this 'hurts' poorer families is in, say, a multi-generational household where people are home and using appliances all day vs a smaller family where it's more likely people are gone all day (at least, pre-pandemic). But of course, per-person, the more dense household is still paying less money for a given usage amount.
>so that the poor who can't afford panels aren't subsidizing the rich who get inflated rates for their generation.
Perhaps we should quantify this subsidy, before we get up in arms about it. California gets around 14% of its electricity from solar [1]. The average electric bill is $2500 per year [2]. That's around $30 per month, total, for all solar. Of that, most of the solar is probably from farms, most poor people probably use less electricity than average, and wholesale electricity prices are not zero anyway. So you're probably looking at the single digits per month.
There are better places to look for ways to help California's worst off.
Every grid user should pay retail price for power at the spot retail price when they buy it from the grid
Every grid user should be paid retail price for power at the spot retail price when they send it to the grid.
Every grid user should pay a grid connection fee.
So sure, the grid is a "free battery", but time of use is taken into account.
If there's a huge spike in electricity prices just after sundown that's fine. People will have an incentive to decrease power use then and produce power then. Suddenly batteries become much more profitable. Users with access to land, wind, water, or geothermal would have incentives to sell power when price is high.
Because generators aren't paying their fair share of the grid, a chunk of their power is wasted on transmission losses, etc.
If I make 10kw with solar on my roof and someone else in my neighborhood uses it it makes the world a better place. My house is cooler from solar panel shade, have close to zero transmission losses, and I don't stress the expensive long distance/high voltage transmission lines. I also pay a connection fee (say $25) for my 100 amp or whatever service.
A generator is usually on cheap land, far from where it's needed, and has a huge cost for the grid to get the power from where it's generated to where it's used.
The delivery man buys power and pays for transmission infrastructure to move it.
Consumers buy power and pay the delivery man (Retail).
Transmission costs might be high or low, but it shouldnt matter to the generator or consumer. The delivery man pays for it and it is their incentive to find the cheapest source including transmission.
Say a power plant is 50 miles away. There's substantial cost running the grid 50 miles, buying the contiguous land, building high voltage towers, the copper, the maintenance, the substations, etc. Thus the delivery cost is huge and there's a huge difference between retail (consumers) and large scale generators that get paid wholesale.
However if everyone in a neighborhood pays a connection fee to run the local grid, why shouldn't the delivery fee be near zero within the neighborhood. Why should house A get paid wholesale to send power to house B who pays retail? What's the difference between wholesale and retail funding? What's the benefit to society for that difference?
This would all work out financially if the "free battery" included time of use. So during peak solar you might get paid retail price of $0.05 kwh, but at solar minumum power might cost $0.25 per kwh. So you'd have to produce 5 kwh at peak solar to pay for 1 kwh at solar minumum. Thus providing an incentive to build more solar, which results in cheaper power, and provides financial incentives for everyone that makes the grid more robust and produce less carbon.
Getting paid wholesale reduces the incentive to build home solar. If I could get paid $0.25 per kwh I'd likely install wind (if I had the land) or at least batteries, which is exactly what would benefit the grid.
Paying for for distant power generation hurts the world, increases centralization, and increases pollution, transmission losses, wastes land, etc.
Imagine you have a neighbor and a powerplant miles away. You cant rely on your neighbor so you must build a connection to the plant to supply 100% of your need. Imagine the connection costs $100 a month fixed. The plant sells power for $1/kWh. Why would you ever want to pay your neighbor $10/kWh plus the $100/month for the connection?
At the end of the day, nobody wants to buy rooftop solar above wholesale rates. The power company doesn't want to, and the other customers don't want to.
It is wasteful greenwashing, like cutting down ten trees to plant one. You could provide 10x more clean power industrially for ever 1kwh produced on rooftops. You could do it with far less pollution and waste.
Im fine if people want to do it for their own use, or sell it at wholesale rates. Just dont force me to buy expensive power from your pet project when I can get solar energy from someone else for 10% the price.
> Why would you ever want to pay your neighbor $10/kWh plus the $100/month for the connection?
$100 seems like a high connection fee, I think it's normally around $25.00. If more people add solar than power is cheaper during the day. Even if you pay retail for it. Sure prices are likely to spike after sunset, you could either shift use, or get a battery. The more people that get batteries the cheaper power will get after sunset. Maybe people with larger lots will start adding wind because it's so profitable.
Grid costs, the cost of delivering power should scale with the distance the grid has to carry the power. If a power plant is 500 miles away then use the cost paid should be much less than retail. But if the power sharing is within the same neighborhood (about 1 in 5 houses around me have solar and 1 in 10 have batteries) it should be retail prices since the connection fee covers the local grid.
> Is transmission and distribution fully covered by the connection fee?
No. Retail cost pays for long distance transmission and distribution. Thus PGE paying some power plant 100 miles away, running high voltage long distance lines, paying for land, paying for towers, paying for transmission losses, maintenance of the towers, substations along the way, etc.
> If so, then the retail price is the wholesale price.
If I have a 10Kwh surplus and my neighbor uses it. Why should I get paid wholesale and they pay retail? The infrastructure is trivial, just the neighborhoods normal power infrastructure. Why should it subsidize buying land, towers, copper etc to connect to a distant power station, just to send power across a neighbor? The connection to the local power grid is what the connection is for. That way even if a neighborhood uses net zero power over a month, PGE gets the connection fee to run the local grid.
I do however believe that the "free battery" should be time of use based. If it's $0.05 per kwh at noon (peak solar or so) and $0.20 at 9pm then you have to contribute 4 kwh at noon to get a "free" kwh at 9pm.
You aren't selling it to your neighbor. You are selling it to the power company who is then selling it to your neighbor.
If the power company had the option, their strong preference would be to buy from a generator 500 miles away for 5-10% the cost.
Your neighborhood needs to be connected to the grid because of weather and winter, So the infrastructure needs are fixed. Rooftop solar doesn't help reduce this need for infrastructure.
Once they are built, PGE would rather use them to buy from the cheapest generator possible than let transmission sit idle and pay 20x more for a local rooftop generator. Sourcing expensive power locally when available doesnt save PGE or the neighbor anything. It is purely a financial waste for both of them.
"their strong preference would be to buy from a generator 500 miles away for 5-10% the cost."
Agreed, they want to maximize profit in an environment where they don't pay for externalizes like carbon emissions, pollution, global warming, etc.
"Your neighborhood needs to be connected to the grid because of weather and winter, So the infrastructure needs are fixed. Rooftop solar doesn't help reduce this need for infrastructure."
Actually it does. Grids are designed for the worst case, typically the hottest day of the year where AC use is the highest. Typically in the 3-6pm range which is usually the hottest part of the day.
Measures include starting up peaker plants, scheduling hydro for peak output, dropping voltages, and consumer programs where they raise the thermostat so the AC goes on less.
Exactly the kind of thing that solar helps with. With battery programs (like SGIP in California) the solar benefit is even extended a few hours into the evening.
The dreaded "duck" curve caused by solar could provide significant incentives for batteries and non-solar, which also decreases the cost of grid.
> Sourcing expensive power locally when available doesn't save PGE or the neighbor anything. It is purely a financial waste for both of them.
It shouldn't be about saving money, it should be about doing whats right for the environment. Sure PGE won't have as much money for executive bonuses and stock dividends. But cleaner air, less carbon emissions, and a more resilient grid are worthy goals. It also means the neighbors pay quite a bit less, at least if they are willing to shift their usages. If half the homes in California had solar the day time power would be nearly free, and some batteries and time shifted power use would mean that the average home would pay less than today.
I disagree with everything you're saying and think that I have pointed out why. The 5-10% cost is for commercial solar. Not for carbon generation. PG&E profits are limited by law. The grid needs capacity to provide 100% non-local power. Rooftop solar doesn't reduce any grid costs.
How exactly are the poor subsidizing the rich if the rich can participate in the electricity market at (near) market rates? Sure, there's a tiny bit of power lost during transmission, so the price you can charge the grid should be a bit less than the price you would pay to the grid for the same energy, but does it actually make a difference to non-solar houses if that's the case? The only effect I can see is a reduction on the demand of the power plant, which might affect the economy of scale, but is that actually happening?
Net metering is not near market rate. Utilities pay wholesale rates which are generally around 10-20% of retail rates. And in "true" net metering it's even worse because you sell during the day when prices are low and buy at night when prices are high but pay nothing. Utilities are monopolies, they will get their profits one way or another. If the wealthy are paying them less that just means the poor will pay more.
I'm not sure if you meant net billing instead of net metering, but this seems to reinforce the idea that the rich were never being subsidized by the poor in the first place
There are lots of programs that help in this situation. Although I agree that they shouldn't be paying retail for the power. On the other hand sitting the power locally doesn't help anyone else either.
I agree with this. I don’t think people understand how exactly net metering works or what the actual utility cost structure looks like.
Utilities sell energy to you by exposing things like time of use pricing and maybe tiered rates (in California, PG&E has seasonal tiers by location that basically correspond to how bad they think you need AC). The time of use pricing is kind of them passing on their cost structure, but the rest is very simplified.
There are power spot markets https://www.caiso.com/todaysoutlook/Pages/prices.html utilities interact with that have much more dynamic pricing involved. These depend on things like weather, time of day, demand, etc. Utilities are greatly simplifying this cost structure when they charge you for energy.
Right now per that website we’re at about 18 GW renewables out of a demand of 21.2 GW. 11 of those 18 GW are solar. Go to the demand page and look at how demand fluctuates over the course of the day. It’s highest at around 7:30am and 8:30 pm. How do you think that interacts with the solar supply? The TLDR is, solar produces a ton of supply during the part of the day where demand is low, and it stops producing power right around when demand is highest.
So with net metering, we’re effectively letting people buy expensive, highly demanded power at the rate of cheap, low-demand power. This breaks utilities’ cost structures and also causes utilities to have to deal with greater fluctuations in energy demand and supply, which leaves more infrastructure unused for part of the day (they provision for peaks, but they spend a ton of time very far from the peaks). For those of us not lucky enough to be able to engage in solar power arbitrage, we have to pay higher prices to compensate for all the people paying very low bills relative to the actual cost of their energy consumption.
Solar power and renewable energy are good to incentivize, but this implementation is simply not good for the energy system or consumers. I completely agree that excess residential solar returned to the grid should be compensated based on the current energy market prices. The good part about that is it incentivizes residences to invest in battery tech rather than relying on a grid (which they pay very little into) to do it for them. It probably does disincentivize solar a bit, but the system obviously would not work with everybody taking advantage of this arbitrage opportunity.
> So with net metering, we’re effectively letting people buy expensive, highly demanded power at the rate of cheap, low-demand power.
Sort of. During the summer, because I'm on a time-of-use plan, the bulk of my power is generated at part-peak rates. If I had air conditioning and participated in the "peak power hours", I'd be consuming at higher rates than I generate at.
However, in actual fact, we consume most of our power at 2am charging the car, when electricity is "cheap". (although I'd argue it's not nearly cheap enough; it shouldn't cost 30c/kWh at 12-5am when that's ALSO what it costs at, say, 11am.
Funny thing is, net metering 1.0 (where a credit is a credit) would have been worse for us than NEM 2.0, where I can generate at peak hours for 40c/kWh and charge the car off-peak for 30c (for example). It was even better when I had 1pm-7pm peak hours; now that I've lost those, "peak" is fairly useless because 4pm-9pm is not exactly prime solar generating hours.
We're looking at a remodel and I definitely missed the boat with the April 14 deadline. I just assumed I could grandfather in my old panels and maybe add capacity under the new scheme, but it sounds like any changes I make to capacity shift me right over to NEM3.0, which means there's probably no point in adding capacity. I'm not sure if the changes required in redoing my roof (removing panels, putting right back where they were) or optimizing (moving existing panels to a new location) hurt my NEM2.0 status or not.
Which is frustrating, because currently my annual true-up is like $700/yr for power. I'd like to go from a gas furnace to an electric heat pump, meaning I'll be using more power, but financially it doesn't make a lot of sense to add panels and lose my NEM2.0.
I had also assumed I'd need to add capacity by .. tomorrow, which I knew I wasn't ready to do. Turns out, I could have just engaged with our installer and had the plans drawn up and approved, and installed them later this year, which is the plan anyway.
The frustrating thing about the whole system is tiering. You really just want to stay in tier 1 but that's impossible in the winter with an EV. And it'll be even harder with an EV and electric heat.
Tomorrow is probably pushing it, but SunRun, though expensive, was incredibly responsive and could do things from Google Maps. You could give it a shot.
You should look into thermal mass for daytime storage, you may well be able to shift a bunch of heating at night to your solar received during the day. It's the cheapest and safest way of storing energy, and it also has pretty much unlimited cycle times.
Maybe government subsidies for installation could be changed to subsidies for net metering? Or subsidies for local battery storage? It'd be nice if utilities had to compete with local storage for the excess generation, instead of offering a take-it-or-leave-it price.
Eliminating net metering is a strong enough incentive to install batteries that subsidies themselves probably aren’t needed. And it probably wouldn’t make sense to subsidize batteries while continuing net metering, because as long as the battery cost remains > 0, it would still be better in many circumstances to forego it and just use net metering.
If we did subsidize batteries down to 0 it would make more sense for them to be centralized because it’d be a lot simpler to install and get some economies of scale.
for decades we have seen planned communities with common assets paid for by hoa such as a pool and parks. i bet we will see in the future a neighborhood that “comes with” a 40 acre solar installation and storage as a perk. maybe even just storage. and if everyone feeds into it and draws from it you can get away from the grid power sharing changing requirements and host your own micro grid
We already have those future neighbourhoods, but they are powered by 4,000 acre solar installations, operated by entities we call 'utilities'.
Economies of scale greatly benefit them, for the same reason that economies of scale benefit industrial-scale smelters over the https://en.wikipedia.org/wiki/Backyard_furnace garbage that was pushed by 'great visionaries' of the last century.
There's no universe where someone driving for an hour, then climbing onto your roof to install a solar panel is cheaper than doing it at scale. There is no universe where an HOA wasting 40 acres of expensive urban or suburban land is more economic than a utility deploying 40 acres of solar panels, 15 miles out of town.
This works, but it isn't nearly as efficient as getting people to create and consume their own power: it creates a level of awareness that is much higher than it would ever be if it is part of some larger pool.
Florida may be called the Sunshine State, but it is no stranger to the damaging impacts of climate change. Miles O'Brien profiles one small Florida community that is trying to take advantage of all that sunshine, billed as the country's first solar-powered town.
If you have net metering it is basically never worth installing batteries unless you are looking to be able to run during a power outage. Net metering turns the grid into an infinite battery so every kWh you generate offsets your overall usage.
I have NEM 2.0 and 25 kWh of batteries. They'll be "paid for" in about 5 years because I load shift from $.81/kWh to $.15/kWh in summer. For example, during peak, my system will feed 100% of my solar back at the $.81 rate and then charge back during the $.15 off-peak.
Penciling it out, this saves me an average of $12/day in charges. 5.4 years and then I saved more than I paid AND have whole home backup AND continue to save ~$300/mo.
Two EV household, multiple kids, etc. We use more juice than we should.
Sorry I meant without net metering, the article says...
>It will also provide a much stronger incentive for solar owners to use as much of the power they generate as they can — or to install batteries that can store excess power for use after the sun goes down
With the style of net meter in the article is makes sense to install a battery because it allows you to sell back power during the times you get the full rate. But yes otherwise you are right the return on investment will benefit smaller systems. Since any additional power would simply be wasted. Now the new standards typically don't fully get rid of paying for additional power. So it is probably still best to build a system that covers your power usage for most of the year and get a small benefit when it is over producing.
Some days even a fairly large system (15-25kW) will output just 1-3 kW; the extra cost from 10KW to 15 kW is not 50%, but maybe 20%, so sizing a system, smaller or bigger, is a calculation that gives different results to different people based on the cost structure, consumption and electricity cost in the area.
