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Solar panels could destroy U.S. utilities, according to U.S. utilities (grist.org)
261 points by colinismyname on Apr 13, 2013 | hide | past | web | favorite | 136 comments

More like: business model of utilities disrupted by distributed energy resources.

Also, peak demand in CA is at 9 pm, not noon: https://www.caiso.com/outlook/outlook.html

The underlying problem is the mismatch between the old business model:

    Generate, distribute, and deliver electricity;
    charge for connection to grid and for
    electricity delivered and consumed.
and the new situation:

    Generate *or* purchase electricity from various providers,
    including households with solar panels,
    distribute and deliver electricity,
    charge for distribution, delivery, availability,
    and for electricity consumed.
Consider the migration of television from broadcast to CATV to cable to the current YouTube / TiVo / Hulu / whatever model - basically, a shift from a hierarchical top-down head-end driven model to a widely distributed model.

Utilities are facing a similar disruption, and their challenges include restructuring their generation / collection / distribution system; the costing and billing to support that; the regulatory and funding environment to cope with all of that; and to do it with generating plant equipment that will have very long term costs. I wish them luck.

While I agree with you 100%, I think the real challenge is going to be people not wanting to pay for the invisible "availability and distribution" when they've spent their entire life being trained they were paying for the electrons themselves.

If I were in that business, I would be putting a lot of marketing dollars into retraining people that the value of availability and distribution is a good percentage of the costs that they incur today, so when a customer starts generating their own electrons, they already know there is value in being attached to the network, value that corresponds with continued revenue for the company.

These are touchy subjects with vertically integrated monopolies. The equivalent to separating the value, and price, of transport from other services in telecom is called "structural separation." Telcos don't like it one bit. They prefer pricing and costs to be opaque. It may be that obfuscating costs and margins in consumer electric service is just as advantageous to the utilities.

You are missing one giant term in the equation: utilities are subject to a shitload (technical term) of regulation. Of course they are opposed to the changes in the assumptions behind those regulations, without a carefully considered change to the regulations such that they can repsond to disruption, and therefore have an actual chance of surviving/pivoting/whatever.

Part of the reason demand in CA is at 9 PM is due to more than 1 GW of "behind the meter" solar. From the perspective of the grid, this is a decrease in daytime demand. However, the primary reason for 9 PM demand is that it's spring. Summer peak demand is mid-afternoon, and winter has two peaks -- morning (~8 AM) and evening (~ 6 PM).

Correct. Many of us who were in CA during the brown out dot com boom years became addicted to that site and understood the cycles.

Question: the daily peak is at 9pm, but what time of day is the yearly peak?

I imagine the yearly peak might be earlier in the day, because it will occur on very hot days.

The time of day of the yearly peak is more important for capacity planning than the time of day of the daily peak.

The peak time in CA in summer is 2 - 5pm. It's driven by office AC. After 5pm many offices up the temperature a few degrees for overnight effectively dropping demand. It can peak again after 7pm due to home AC and washer/dryer/dishwasher but that 2 - 5pm in the height of summer is always the peak.

The culture of protecting existing businesses is becoming infuriating to read about. Businesses are there because they're the most efficient way to solve the needs of a group of people. If circumstances change and a better solution presents itself then both new and _existing_ businesses have an opportunity to take advantage of it. There's absolutely nothing to stop the existing utility companies being the companies that lead the charge with solar power.

This article isn't talking about protecting them, simply the problems that they are now facing and will likely face in the future.

"There's absolutely nothing to stop the existing utility companies being the companies that lead the charge with solar power."

Did you read the article? Energy infrastructure is amortized over THIRTY years. That means that they have huge liabilities until that equipment is payed off and chances are they have to upgrade it shortly after. Even pumping the solar companies full of government and investment dollars doesn't compare to all of the private equity that has gone into funding the existing infrastructure.

I acknowledge this is slightly off topic, but the culture of attacking industries seems somewhat problematic for similar reasons. Passing unfriendly restrictions and higher and higher taxes on oil companies, doesn't really help solve the problem. Sure they're oil companies now, but they're not really oil companies. They're energy companies, are the biggest investors in better solutions, and have the most to lose if they don't invest in the future so why hinder them so much?

You frustration is from your false assumption. Businesses are there to make their owners as much money as possible. This frequently does not involve efficiency.

Taking a look at things from society's perspective, society decided that individuals should privately own for-profit businesses because, for a large subset of society's needs, that is the most efficient way to produce these needs. In that sense, capitalism as it exists is meant to serve society. It merely works out that the incentive to maximize profit in this system _approximately_ aligns with society's interest in acquiring goods at minimum cost---that is, if certain conditions, such as adequate competition, are met.

Of course this isn't the only reasonable perspective, but it certainly isn't false.

Yeah, poor choice of words on my part, I should have said: Businesses _survive_ because they're the most efficient way to solve the needs of a group of people.

Original report here: http://www.eei.org/ourissues/finance/Documents/disruptivecha...

I believe that distributed energy is the future, plugging your house into your car, charging your car with solar and selling power to the grid when your forecasted household demand is lower then your forecasted supply.

Because of the internet we now have distributed information and it is changing the world in every way. Anyone can share anything in real-time with the world. Everyone is a producer and consumer of information now.

The impact of everyone being both a producer and consumer of energy will also be profound.

As a small part of this information revolution, may I suggest a (free as PDF) book on the energy problem and the varying efficacy of its potential solutions, available from here: http://www.withouthotair.com/.

It's an eye-opening read for the most part and uses real-world figures for its estimates to show just what might and might not work in replacing fossil fuels around the world.

I wouldn't have been as interested in reading it myself if the Economist/Bill Gates hadn't given it their approval.

Cannot recommend this book enough - brilliant as it just looks at the figures - how much of Britain (Author is a Cambridge mathematics prof.) would have to be covered in solar panels or wind farms to replace coal etc.

Entertaining, memorable and instructive.

Go read.

I too absolutely recommend Without Hot Air; if you're interested enough to read this far into the comments, you'll enjoy the book.

It's a refreshing physicist's take in a field normally consumed with politics and hand waving.

I'm not so sure. Unless you have huge guaranteed subsidies like in Germany, making these investment decisions carries substantial risk. Is it really smart to buy solar panels and large batteries that amortize over 10 years when there could be a technological breakthrough right around the corner? Do you really want to be in a position to operate and maintain that technology, buy insurance, deal with repairs, etc? I know I don't.

And if you're talking about disconnecting from the grid entirely (I know you don't but the OP did), you suddenly have a high availability issue on your hands. That's never going to happen.

I think at the end of the day, solar will be operated by utilities. They don't have to buy all equipment on one day, so they can spread the risk. They have professional staff to fix and maintain things when they are broken.

The analogy to the Internet is apt. But it's worth remembering that the Internet backbone was not built on the existing phone network. Instead the Internet backbone was developed as a separate infrastructure, by separate companies, which was then hooked to the existing telephone (and eventually cable) last-mile infrastructures.

I'm not sure the same thing is possible in power generation, because power plants, substations, and power lines are so much more expensive than telecomm switches.

What we need is the power equivalent to the fiber optic cable--a huge breakthrough in line capacity. The only thing that could compare is probably high-temp superconductivity.

I work in this space. I think it is worth noting that, yes this is true for some players, particularly at middle management and executive levels. However it is equally work noting that some of the resistance is just conservative engineering.

Would you just grab the latest 0.1 release of the hot new database and throw it up on your production systems because everyone keeps talking about the promise of it? This is a real concern at the engineering levels.

One of the problems with distributed generation is not that it eats away at grid profits - there is still profit from maintaining the grid that allows you to have power even if your solar panels break. There are price structures that allow this to be profitable for utilities (however everyone involved needs to look at it with fresh eyes -- homeowners need to stop thinking about it in just profit from unused kwh and utilities need to stop looking at it in terms of kwh pushed). The problem is that huge and expensive amounts of infrastructure are designed an manufactured with a one-way power flow in mind. Protection schemes are predicated on a star(ish) topology of distribution lines, where the assumption that power flows from the "hub" out.[1] Things like transformers are highly tuned for this type of flow, to the point where even small changes or running out of spec can seriously degrade the expected lifetime (usually thought out and planned on the time-frame of 30 years.) Power flowing the other way is a "break the line" event, period, to protect that equipment. A lot of substations don't have the type of capacity or equipment to handle power swings too far out of spec, because they designed that way for maximum efficience of the push model.

Something this article misses in it's analysis, is that power companies building infrastructure is absurdly expensive - getting right aways for power lines is a decade long, legally perilous, and highly prone to regulatory whim, endeavor (the NIMBY crowd is strong here). As such, once one is put in, the cost is amortized over 30+ year timelines, and efficient operation is actually strongly considered. Demand response and efficient appliances are actually in the interest of utilities, and they do recognize this. If they can't build new infrastructure to increase supply, they want demand to remain within their capability to deliver (and when done right, the base "connected" fee to the customers can be as or more profitable than more power to fewer customers).

Finally, all the understanding and models of how electricity works in an interconnected grid is based on models assuming "roughly" steady state capable generators. Things like solar and wind have some problems in this, as they can contribute instability to the overall system - if the wind dies, you have to have hot standby power to keep voltage levels up. If everyone in a region has PV, and clouds move in, they will be demanding more power from the grid. On a "partly sunny" day, this result in weird spikes, again placing strange wear patterns on transformers and generators that are ramping up and down in response.

Even the engineers I know who are all about this stuff are hesitant to just deploying it, because of all this technical challenge. Just like I would be hesitant to throw an unknown datastore into a stable working system without staging, testing, and otherwise slowly integrating it. It's even worse for the utilities, because they are in a "damned if you do, damned if you don't" position. What is worse - rolling slowly with the new technology and being blasted as obstructionists, or going head first, and being blasted when the unexpected happens and breaks a bunch of things, or finding a middle ground and making everyone unhappy?

[1] at transmission levels, this isn't true, and in dense urban centers the topology is meshier, but this statement is still true for a (geographically anyway) majority of power distribution.

I'm in the industry too. Your comments are spot on.

At an IEEE talk on this subject not long ago, the presenter said, "We've spent the last 100 years learning how to PREVENT the very type of electrical flow that distributed generation creates."

I may have been at that talk, or at least one where it was quoted :) If we don't already know each other, we probably should. Ping me at:

$HN_USERNAM @ gmail

If you want to chat tech and power.

I wouldn't want my electric grid engineers (or any other kind of infrastructure) to be anything less than skeptical of change.

The same dichotomy exists in developer tools as opposed to recreational software.

Yes, please rapidly innovate my Facebook and NetFlix UIs, and even pipe those changes to me automatically. On the other hand, please methodically roll out changes to XCode and Django, and let me take them when I have time.

Iterate services quickly, not the tools to build them.

Netflix down? Oh well. Latest Django build breaks thousands of sites. No thank you.

I live in Ontario, which through some poor green power policies has really expensive power now. In response, I've reduced my power usage, plus I'm often in Germany for large periods of time. Now I'm starting to notice that the connection charge is on its way to dominating my power bill. I guess this is where the future is going.

"In response, I've reduced my power usage"

Perhaps those green power policies aren't so poor after all.

I don't understand. This might be the current problem for utilities, where laws demand that solar power can be inserted into the grid (often as a priority or for a guaranteed price) by what would normally be just consumer households.

This article is talking about using your solar power system to actually fulfill your complete power needs, without any grid.

Could you point to where the article talks about people disconnecting from the grid? I couldn't find it in my read through. For instance, the article says at one point, "What happens if a whole bunch of customers start generating their own power and using the grid merely as backup?"

I think the risk of people disconnecting from the grid is fairly low, since the necessary lead acid batteries cost thousands of dollars.

-Former utility employee

It's obviously speculative. Both battery tech and methods of local power generation technology is improving. At some point one can imagine a tipping point that it'll become a worthwhile investment for those that aren't super rich. The assumption is the utility companies will act to protect their levels of revenue and raise prices to compensate. This will result in more people investing in solutions. Rince and repeat until your utlility companies are getting bailouts.

There are many different regulatory environments, but the utility I worked at, where I wrote programs to calculate the hourly price of electricity, the utility made zero dollars from usage by residential customers.

Residential customers payed a fixed rate to be connected, and every penny the utility collected for energy was remitted to the market operator.

The utility also made no money on energy by large users, but they were billed based on their own hourly use and the hourly price, and some also would have had demand charges.

so where does the utility make their money?!

They made money on the regulated connection fee.

Monetary float.

Excuse my ignorance (I am a layperson and simply interested in this subject), but are you suggesting that the utility themselves would rollout distributed solar to their customers, and thus the utilities engineers are skeptical of the technology and how it would be rolled out?

It seems to me that the whole point is that consumers will begin the rollout themselves, generating and storing power on their own and the only visible effect to the utility would be a dramatic decrease in power use by that customer.

While having a grid where you could sell your unused energy is a great idea, I didn't see that as the focus of this article. I thought this article was simply about the distributed generation and storage.

In the context of distributed generation and storage on an individual level -- why do utility engineers matter? They don't get a say in the rollout, they don't manage it, and they certainly don't get to prevent it. All they can do is maintain their infrastructure in the face of a change they cannot stop.

I was not talking about the completely off grid case at all. Maybe I misunderstood the article. I was talking in terms of grid-connected solar installs, which I feel just make more sense. What happens if you get a cloudy week? You have no power until the sun shines again... or have to fire up your inefficient generator (the existence of which may in fact negate any savings anyway... because price and inefficiency at small scale of generation). It could be my bias showing too... I'll admit that.

However, there are interesting regulatory consequences here. Various levels of government have regulations in place that are designed to protect the consumer, but also put a strain on utilities. In a very large number of places, the power company is only allowed to charge a certain rate or less. This rate is partly based on building out the infrastructure for all houses, businesses, etc in the region, and assuming certain usage values. They are also required to make power available to anyone in those areas. They are also required to provide power under certain conditions, regardless of the customer paying (e.g. they can't shut off power in the winter in many places, because that could kill someone). The utility being constrained by the rules in these places must figure out how to operate profitably (being a publicly traded company in many cases) with these constraints. So, if suddenly everyone starts going off-grid, they are still required to sell at a certain rate or lower, still required to be able to provide power to everyone, and being told that they can't necessarily charge enough for that service, because a lot of people will just go off-grid.

It is a sticky situation, and until operating models and regulations can be worked out to account for wide-spread off grid people, it is kind of a catch-22 for everyone. I don't want my power to go out because the utility can't afford maintenance because they can't charge me what they need to for reliable service, because half of my neighbors are off-grid now.

Basically, the question is: if you were under regulation to act a certain way, and those regulations were based on assumptions, wouldn't you be against allowing behavior that breaks those assumptions without a change in your regulatory responsibility?

That sounds like the 60 train restrictions/governmental restrictions on closing branch lines/rate restrictions in Atlas Shrugged (Not looking for Ayn Rand discussion). So if you happen to have a system with high inertia (stacks of paper weighting it down), any change will break it, whether it's more demand (brown/blackout) or less demand (financing model collapses).

I think the article is talking about customers who buy their own solar installations. The thing is, no system is available (afaik) that is 24/7 solar power (batteries add a massive cost to user solar installations) so the only way for you to have power at all times is to sell the surplus generated solar back to the utility (which is where the engineering problems come in) during peak solar hours and using the gird off peak.

>batteries add a massive cost to user solar installations

SolarCity will install a bank of Tesla Motors Li-ion batteries for grid backup and load shifting. This would be financed over the course of the loan (typically 20 years), not all at once. http://www.solarcity.com/residential/energy-storage.aspx

Well the tech for batteries is getting cheaper and better.

Check out this Hak5 rig of van with PV and batteries: http://www.youtube.com/watch?v=tWmCpt2KXOs

From this, it is not hard to imagine if one scaled this setup one could be off the grid now.

I was recently in rural South Sudan, at a place where there are no power lines within 80 miles. So the systems they use must be off the grid by necessity.

There were several PV and battery setups there which worked pretty well. Obviously you need to be careful with the amount of power that you use, but it can run computers, TV and lighting with a reasonable setup.

There was a computer lab at one installation which had one desktop machine acting as a server and about 15 thin clients to keep the power usage low.

Thats why i think CSP and thermal storage (via molten salts KNO3+NaNO3) might work better in the long run (at least in an environment with an atmosphere).

Yes! But in that paradigm, where you generate 80%+ of your needed energy and rely on the grid for the rest, how does that affect the utility?

The only difference to them is that you draw less power than you used to. Sure, it would benefit them to learn your habits so they can manage steady power delivery at scale, but they don't get a say in your solar rollout. They don't get to prevent it. They don't get to be skeptical (or if they are, they can't act on it).

The person I'm replying to seemed to say that the engineers at utilities are skeptical of this technology and honestly I don't understand how they're relevant, since utilities aren't rolling out the technology, maintaining the technology, etc.

> The only difference to them is that you draw less power than you used to.

That is not the only difference; the pattern of your load changes too.

With 100% grid-supplied power, changes in load are driven by slow-moving, predictable systems like sunrise/sunset, weather, and seasons.

If you are running your own solar array, though, you will vary your grid load on much shorter time scales unless you invest in a big battery pack to smooth out the variations in insolation from clouds and storms. And even the normal daily variation will be stronger, since when it gets dark you'll not only be increasing your load (turning on lights, TV, cooking, etc), you'll also be losing your local generation.

The current electric grid is not built to handle such large changes in load on such short timeframes.

With 100% grid-supplied power, changes in load are driven by slow-moving, predictable systems like sunrise/sunset, weather, and seasons.

If you are running your own solar array, though, you will vary your grid load on much shorter time scales

I'm not so sure that these latter variations are significantly less predictable than what you mention in the former paragraph. Isn't the output of a solar array dependent on the insolation? Isn't the insolation dependent on the cloud cover? Can't you predict the cloud cover in any single place simply by taking advantage of real-time meteo satellite data? A similar feedback could be established for wind power. Given enough data, I'm reasonably certain that models could be established that would allow you to predict how the solar and wind power generation distribution is going to change in the next hour(s) so that you could prepare for it.

The problem isn't the prediction, full solar is probably only slightly more volatile than full grid on a large scale. Maybe not hourly but the companies would still be able to work out the supply side.

The issue is that the supply side and supporting infrastructure is built for an entirely different system where power leaves the power plants and goes through the grid to consumers. Now people are adding solar panels which generate a ton of electricity during the day (when everyone is largely at work/school) that must then be fed back into the grid, opposite the direction of normal flow.

Example of dealing with load patterns: Handling when 1.75 million britons make tea after a popular soap opera ends http://www.bbc.co.uk/britainfromabove/stories/people/teatime...

But what if you generate 110% of your electricity needs? You would push out more power than is coming in, sometimes literally running the meter backwards.

I don't know how it works elsewhere, but in New Zealand at least, power going each way is metered separately.

Power is sold to the electric company at a much lower rate than the power that is bought from the electric company.

So you might buy power for 27c/kwh and sell it for 3c/kwh.

In the US it depends on where you are at and who your power company is. Some times they do it the way you describe in NZ, but in many areas it is more the way the OP describes, where there is one meter, and sometimes it literally runs backwards- only if there is an excess at the end of the month is it credited at the lower rate.

Are we saying that there is no way to prevent power from going backwards back to the utility?

I figured what you generated went directly to your storage system, you drew from your storage system OR the grid, or some third part intelligently drew from the grid or your system as necessary.

Is it functionally impossible to have solar panels that don't "run the meter backwards?" Because I can see how that would threaten the infrastructure that wasn't designed for it.

I mean, I see places like Apple generating all their electricity on location for their new planned office and using the grid as backup. Is Apple sending their excess power back to the utility? Totally different scale, I'm well aware, but just curious.

Yes, you can configure inverters to not dump excess current back to the utility. You either charge batteries or you dump the power into a load like an electric water heater.

In almost all grid-tied scenarios though, you want to sell the power back to the utility. I'm not familiar with commerical operations, as they would fall under power purchase agreements (PPAs), but with residential installations your meter quite literally does spin backwards or a separate meter is used to determine how much power you've sent back to the grid. This is dependent on how the utility compensates you for the power you generate (spin the meter back if its a credit or the same price as what your purchase it from them at, separate meter if the pricing paid to you is different than the retail rate).

As the article states, we don't have the issues in the US that Germany has yet, because Germany produces so much more solar energy than in the US. At some point though, questions will need to be answered about who is going to pay for the spinning capacity (likely natural gas generators) that isn't used except for those rare times when the wind isn't blowing, the sun isn't shinning, and you can't drag enough power in from another geographic region over HVDC transmission lines.

> who is going to pay for the spinning capacity (likely natural gas generators) that isn't used

That doesn't sound like a bad problem to have.

Fukushima showed us how hard it is to turn a nuke on and off quickly, but I would think most hydrocarbon burning and other generation systems could be throttled according to demand.

If you really have a problem with too much energy, well, smelt some aluminum or electrolyze water or something.

"Spinning Reserve is the on-line reserve capacity that is synchronized to the grid system and ready to meet electric demand within 10 minutes of a dispatch instruction by the ISO. Spinning Reserve is needed to maintain system frequency stability during emergency operating conditions and unforeseen load swings."


The poster isn't saying they're producing energy, just that they must be ready to do so at any time.

Correct. You're not paying for that field of gas turbines to run. You're paying for them to sit in the field warm until issued to run, because if they're not there, hello blackouts.

Spinning reserve ought to be replaced with batteries. I bet some of it could be replaced with batteries today with the utilities' customers saving money, aside from the sunk costs not then providing the proper return on capital to their investors.

LOL talk to an EE about the orders of magnitude involved, you're not going to like the answers.

The cheapest storage battery is simple lead acid figure a quarter per watthour installed. Or a KWh is $250. But with a 100% charge/discharge cycle the battery will be dead and need replacing in about 10 or so cycles. To get up to 1000 or so cycles (which is only 3 yrs daily cycles) means you only get to use about 10% of the capacity. Lets round up because rectifier/inverter gear, and buildings, and operators and their stuff, are not free. So you can guess about $3/watt of storage as an absolute best case, but probably more realistically a turn key battery storage facility would cost more like $4 and would depreciate fully in about half a decade.

Hydro turnkey is about $1/watt plus or minus massive corruption (what is the dollar value of the hetch hetchy valley of yosemite national park, etc?) Coal plants sell turnkey for a bit over $2/watt, natgas is arguably the most expensive around $6/watt. All of those last like 50 years, so divide those costs by about 10 to compare with a battery bank that only lasts at best 5 years.

Spinning capacity (well, sorta, in case of natgas) is around 10 times cheaper per KWH than batteries. You have to remember that power companies don't really care about pushing an agenda, more or less. There is no conspiracy, they just want to sell KWH. If they could install a battery bank instead of a natgas peaking plant, and keep huge profits, they most certainly would.

There are some interesting math problems too. If each stored utility grade battery costs $2500/KHW and the total overall worldwide battery industry is about $50B, that means if we abandon all other forms of battery use in the world and get rid of all laptops, cellphones, etc, we could build nothing but lead acid batteries at a pitiful rate of ... drum roll ... 20 megawatt hours of utility grade storage per year. Now since the batteries are scrap in 5 years, that means if in a Manhattan style worldwide project we focus the entire industry on utility grade storage, we can never store more than 100 megawatt-hours worldwide. Which if you assume a daily charge discharge cycle is about 10 MW continuous or about the capacity of ONE small gas turbine system. So its not as simple as going down to "batteries plus" and picking up a battery large enough to UPS a nuke plant.

The Fairbanks battery should provide some real world experience:



They chose Ni-Cad (presumably for good reason).

Edit: Some numbers:

It's about 5 megawatt hours (varies somewhat based on draw, could stretch it to 6.5 MW-h for 15 minute runtime, less at higher draws).

Cost $35 million, so ~$7000 per KW-h of capacity.

Planning authorized in 1993, online in 2003.

Expected battery life of 20 years (maybe 30).

So a project that didn't seem to take up the entire manufacturing capacity of the battery industry managed to bring up 0.5 megawatt hours per year, with a lifetime of 20 years, half of your prediction of capacity production capacity (but at much higher cost than you started from).

Also, you are off by a factor of 1,000 on your capacity. $50 billion / $2500 implies 20 million kilowatt hours, which is 20 gigawatt hours.

Hmm yes good point.

Using the battery tech that is so cheap you can only 10% discharge sounds.. suboptimal.

You could probably store and recover more energy from those batteries by lifting them from a crane.

You just precisely described pumped-storage hydro and why it's used for 99% of bulk electricity storage :)

How come we don't hear about it more?

Instead we keep hearing the old "Wind and solar will never work because base load" garbage.

It sure could (in some places). Check out:


"An economically and ecologically more viable alternative to ‘spinning reserve’ – gas turbines kept running in case of an emergency – is battery back-up."

Do you have any idea how big and environmentally unfriendly those batteries would have to be? Ready reserve is generally provided by peaking generators (the aforementioned natural gas turbines) and by hydro dams. There aren't many batteries that can provide hundreds of megawatts for hours at a time.

Two of Musks companies have partnered to build just that very system described in this article:


Of course its marketed as backup power right now, but once battery costs come down this will be very viable.

Something that would be interesting: a map estimating the areas in which a typical suburban home roof covered with PV panels would produce enough energy to power a typical suburban home's worth of electrical usage, assuming some level of battery technology.

I'm not actually sure what it'd look like. Seems like there might be a tradeoff between hotter areas, which have both higher PV output and higher peak electricity usage (due to A/C running flat out on hot days), and cooler areas which are lower on both. I guess the ideal situation would be something like SoCal within a mile of the coast: tons of sun yet ocean-moderated mild temperatures. But not sure about the rest of the country.

I'm an electrical engineer and I've done these calculations for my own home.

The roof area of a 1200 sq ft ranch home is much larger than the surface area of solar panels needed to power the home. (in other words, your map would show pretty much all of north America). But covering all of a roof with solar panels is very expensive.

The biggest problem is that the "typical suburban home" is ridiculously inefficient.

In terms of bang for your buck, investing in efficiency improvements is a much better choice for the average home owner. Don't even consider solar panels until you've reduced energy needs first.

After efficiency upgrades, modern solar panels make a lot of sense financially speaking.

> Don't even consider solar panels until you've reduced energy needs first.

Absolutely, asynch13! That's what I did. It took over two years, starting with a home energy monitor.

Using a home energy monitor such as [1] or [2], one can get frequent measurements, every six seconds for [1], then identify individual loads by switching them on and off during a period of otherwise steady demand. Other loads silently switch on and off of course;

Then one can start making evaluations and upgrades. Some can be surprising; I was able to reduce my demand by well over 20 KWh / day; details here [3].

After that, a 5KW / 8000+ KWh-per-year grid-tie no-storage solar PV system went in. My utility charges $11 for a month when the PV system produces more than the home consumes during a billig period.

The utility did change out their transformer (to a smaller 25 KW unit feeding 3 other homes) on the power pole in my back yard. But home and location is 40 years old, so I can imagine the old transformer was fully amortized long ago.


[1] http://currentcost.net [2] http://www.theenergydetective.com/ [3] https://discussions.zoho.com/powersave/topic/how-much-i-ve-b...

They charge you for feeding excess power back into the grid?

Not exactly. Since it was a subsidized system, with 'Net Metering', my utility sets the billing rules. Excluding the finer points, here's the gist of how the billing works:

* My utility (Los Angeles DWP) accumulates a 'dollar banking' credit for the present value of net energy [signed power flow integrated over the two-month interval of my utility's billing period] fed back to the grid when a billing statement period is net-energy-productive (i.e. the PV system made more energy than my home consumed over the statement-period of two months). I pay a $22 'minimum charge' (normalized: $11/mo) for, as I see it, my share of utility equipment amortization and operations I'd otherwise be paying as a consumer. Fair enough: I do draw energy when the sun goes down. It's co-operative.

* In the summer, my 5-ton A/C use exceeds my PV system's production capacity; I become an energy consumer during one or two billing periods. My utility calculates the price for the _net_ energy I use per period, then debits the 'dollar banking' account. If that gets exhausted, then I pay the residual, otherwise my 'dollar banking' balance just goes down.

> Don't even consider solar panels until you've reduced energy needs first.

i suppose its good to watch out for unnecessary power usage (like keeping the lights on all the time), but i will not want to give up any modern luxury to save a bit of power. For example, if its hot, i will turn on the AC, or heater if its cold, take long hot showers/baths etc.

What i want out of a solar panel is so i can spam electrical appliances all i want.

The cheapest watt is the watt you never had to generate.

I've had a solar installer make a report... it would take a little more than half of my roof (the house is a ~1000 sq ft one-story building).

Heat is bad for PV efficiency. Good solar areas are sunny but cool.

Everywhere, in the near future. Graphene PVs promise to be ultra-efficient, and could double up as very high capacity supercapacitors.

Not to mention lumen per dollar increase rate of LED lighting, tablets that consume 4 watts, refrigerators that use half the power of the average installed fridge, etc.

The falling prices of solar PV panels has been incredible. Most expected the price of $0.72 per peak watt to be reached in 2028, not 2013.

> Not to mention lumen per dollar increase rate of LED lighting

The energy efficiency of LEDs still doesn't beat CFL, except for really really expensive LEDs.

> The energy efficiency of LEDs still doesn't beat CFL, except for really really expensive LEDs.

Not at all!

CFLs cost $1.74 per bulb with an efficacy of 64 lumens/watt [1]. LEDs cost $12.47 per bulb with an efficacy of 84 lumens/watt [2].

As far as LED bulbs go, $10-$15 per bulb is a pretty typical price. A more correct phase is "The average LED is 30% more efficient than a CFL, but costs 7x more." Anyway, both halves of your statement are wrong.

The big savings comes in flexability. LED bulbs are easily dimmable. Dimmable CFL bulbs are expensive and don't work well. LEDs can be turned off and on quickly without wearing them out. I go through a lot of CFLs in my basement, because the lights are turned on for three minutes at a time, several times a day. They actually burn out faster than the incandscents! Though in most cases it does not make sense to replace CFLs with LEDs yet.

Eventually it will, see Haizt's Law [3]. CFL tech has been improving too but not as fast. In 1980 florescent tech was at 34 lum/watt. Doubling every 30 years is a dead end.

[1] http://www.homedepot.com/p/t/100687000

[2] http://www.homedepot.com/p/t/204084366

[3] http://en.wikipedia.org/wiki/Haitz%27s_law

First, a arithmetic error: it's $0.74 per CFL, not $1.74. So so the LED costs 17x as much as the CFL.

Congratulations: You found an example of a really really expensive LED - which is exactly what I said.

And I've seen this LED before - it's the very first one I've ever seen that beats a CFL for efficiency, and it does it by having a CRI of 80 (the legal minimum). So the color advantage LEDs have over CFL? Not for this bulb - this bulb looks terrible, so bad that it's going to turn people off from LEDs, the same way the early bad CFLs made people think they are all bad.

How exactly are you saving anything from flexibility? Who cares if they are dimmable, the majority of the time you don't, and the tiny savings in electricity when you do hardly matter.

I turn my CFLs on and off quite often and I go years between having to replace them. And they cost 74 cents - replacing them is hardly an expensive proposition even when they fail (which they usually don't).

Check the efficiency of LEDs that cost no more than $5 (still 6x the price of a CFL, but reasonable) for around 800 lumens, if you find one that beats - or even matches - a CFL let me know. And make sure the CRI is comparable too. A low CRI CFL is also much more efficient.

Haizt's Law has nothing to do with efficiency. Also, the theoretical max for efficiency is 250 lm/w. It's going to get much much harder to improve things as we get closer.

I agree that eventually LEDs will beat other technology. It's just not there yet.

> First, a arithmetic error: it's $0.74 per CFL, not $1.74. So so the LED costs 17x as much as the CFL.

Sorry, what? The linked four pack of CFLs costs $6.97. You must have been doing some very interesting taxes this week if you think 6.97 / 4 = 0.74. (Apologies if you are not American.)

> Check the efficiency of [800 lumen] LEDs that cost no more than $5

They don't exist. Even cheap direct-from-China LED bulbs* are more expensive than that. $10-$15 per bulb is the typical cost and you'll be hard pressed to find 800 lumen (60 watt equivalents) for any less. I'll gladly check their efficiency if you can show me where to get that many lumens for that price.

* Actual lumens. Many Chinese reseller sites will outright lie and you need to check the manufacture's website. Eg, http://dx.com/p/193927 says 1008 lumens while http://www.sencart.net/e27-24smd-5060-led-pure-white-lights-... says 700 lumens.

> The linked four pack of CFLs costs $6.97.

That is very very interesting, for me the price is listed as $2.97. I can post a screenshot if you like.

I'm wondering if it might be because there are utility rebates in my area, and my local store has a lower price.

> They don't exist.

I figured. I don't think the time for LED replacement bulbs has come yet, but we're getting there.

Although I am considering this fixture http://www.ebay.com/itm/170922117326 for a new installation because once I include the costs of the hardware the price is a wash, and LEDs are much better for outdoor use.

I do hope they are not lying about the lumens though.

I think LED specific fixtures are going to be a much better choice for now, rather than edison base bulbs.

It is the rate of change of LED lumens per dollar that is interesting. Look for a graph.

I doubt most people can afford enough solar and battery storage to power all the air conditioning needed for the longer, hotter summers we are having.

We'll just use less coal which is a great thing, until the coal industry starts getting subsidies to stay alive in a few decades (which is certainly going to happen considering their political power).

Grid-tie is a much better answer for people and utilities though. Solves the daytime demand problem.

While you may doubt, I am quite confident. Forklift batteries are readily available and not terribly expensive. Heavy, yes, but you weren't going to put the batteries on your roof for a bunch of other reasons anyhow.

How not terribly expensive are forklift batteries? I imagine they're similar to lead acid golf cart batteries, which if I recall cost roughly $250/kwh. They're still too expensive compared to natural gas backup.

-A former utility employee

Here you can find a 24kWh 48VDC "industrial" battery (forklifts being the primary use) at around $190 per kWh. http://gbindustrialbattery.com/Forklift_Battery_Sizes_and_Sp...

They are more expensive than natural gas backup if you buy them new at retail. But these things get un-useful in an industrial setting quite regularly while still retaining quite a bit of utility for people who just want medium term household energy storage.

Would it be practical for EVERYONE to buy these things up used? Not a chance. But if you just want to set yourself up nicely look around. They go for a few hundred used as that's all the recyclers will pay for them.

EDIT: I wasn't thinking of them in comparison to natural gas backup until you brought it up. When 10kW of solar cells cost $10k and a 5kW inverter costs another $3k-$5k the idea of paying another $5k to put in a rather large-sized battery doesn't seem all that out of place to me. But you're right that a small natural gas generator would win re: batteries.

This sounds interesting. Looks like these guys will just come out to your house and drop off a $1745 700-pound battery rated at 60 amps at 12 volts (720 watts) for 20 hours, and pick up your previous battery at no charge. They apparently will last up to 7 years even in forklift service. The main drawback seems to be that the forklift batteries are not maintenance-free.

Is that your take on it?

I'm more interested in picking up a really big one for a few hundred used. If it can't do a full 8 hour shift anymore but can only do 6 hours it's nearly useless to place that really uses it. But for my purposes an 80% capacity battery is still plenty good.

You are correct that they require maintenance. Thankfully that involves topping off water levels periodically. http://www.giantbatteryco.com/gbweb/ProperBatteryCare.html

They might not deliver quite as happily to a residence as to a business as the battery would likely be located in a less-than-warehouse type location. But it's definitely worth a try!

> Would it be practical for EVERYONE to buy these things up used?

Forget practical - it wouldn't even be possible. There isn't enough lead on earth for that.

One can do wonders for indoor climate with better house design and appropriate handling. The reliance on air conditioning everywhere amazes me.

(But then, Europe is not too humid.. nobody uses private air conditioning.)

Cooling in the summer requires much less energy compared to heating in the winter. It's also a lot more of an optional comfort than a critical survival need.

Besides more thoughtful residence design and geothermal techniques, there are even obvious retrofits like automatically opening and shutting windows/blinds at dusk/dawn. In many places, that alone should be enough.

That obviously depends on where you live.

If you claim more energy is spent on heating overall I'd want a reference on that, since that goes against what I've heard. Especially since houses in cold climates tend to be a lot better insulated than houses in southern climates.

Obviously I'm talking about places that have both a real winter and a real summer. How well insulated your house is is primarily a function of the available technology and the cost of energy when it was built.

Probably the simplest reference I could give would be to point out that a lot of heavily populated places like Seattle, Chicago, the US Northeast, and much of Europe don't even install central air conditioning in homes at all. If we're talking about human survival standards of comfort, then obviously people have been living closer to the equator than you and I for a long time before AC was invented.

In the winter, often a furnace is used to burn gas or electricity in a pure "burning" of utility energy to heat. Some people have heat pumps which are more efficient, but when they hit their limits the backup furnace kicks in. Often additional water must be added to the inside air, and that must be heated as well. The temperature differential which must be maintained by the burning fuel is easily 40 deg F (say 28 to 68 on a mild day).

In the summertime, reasonable cooling involves using a refrigeration process to move heat out of the building. The refrigeration cycle isn't perfect, but it's surprisingly efficient since it's more moving the heat from one place to another. As a side effect, the inside air gets dehumidified which helps too. The summer cooling temperature difference is only 25 degrees F (say 98 to 75) on a hot day.

Yeah, cooling and heating are both just a change in heat energy, which would be the same for either except cooling is more difficult because you are lowering entropy locally, whereas heating you are just increasing entropy... at least that's how it seems to me.

On the other hand geothermal is free for the most part (to use, not installation of course).

Here's your reference:


In 2009, space heating was 40% of US home energy use, air conditioning was 6%.

Most people should be using geothermal instead of air conditioners, but the upfront cost is much higher ($20-30K).

We should be subsidizing geothermal installations because of how damn efficient it is compared to trying to push heat into the air.

Hello from the wasteland Germany. Everything is in ruins.

The chapter and verse of the grid utility economics as they are impacted by solar and wind is in http://smallisprofitable.org which was The Economist's Book of the Year 2003. (disclaimer: I helped edit this)

Decentralized power generation makes society as a whole far more resilient against sabotage and natural disasters.

As for the business model, Heinlein has a comment: "There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."

Of course they might "destroy US utilities", which is why some of us appreciate them so much. Of course they won't destroy hydro or wind plants.

There was a time when power generation "had" to be centralized, just as AT&T "needed" to have a telecom monopoly and we "need" to have ISPs. Technology is sweeping us past that necessity; those days are ending.

Now that the utilities have stripped and burned most of the easily-stripped fossil fuel resources (leaving no such easy plundering for future generations) and kept the profits for themselves, we are all starting to enjoy getting a slice of the pie. Dear Utes: don't let the door hit you in the ass.

One thing that may save utilities for a while is the rise of the electric car. There will be a need for charging stations to charge these cars when away from home and solar may not be practical in all locations. This could be especially true in cities where there may not be enough room for all the solar panels needed. Electrified roads that charge up cars as they drive on them would be even better and would be a natural extension of existing utility services. If utilities were smart they would focus on helping to accelerate the transition to electric vehicles.

It's simple: A utility's costs for a customer are basically a fixed cost for a connection plus a variable cost for the power a customer uses. The fixed cost pays for the astoundingly expensive equipment needed for a connection, and the variable cost pays just for the actual power. In the US, the wholesale cost of power on the grid has long been about 0.5 cents per kWh, that is, relatively low. I have some figures from 2007 saying that the cost of power at the plant from coal is less than 3 cents per kWh and, nuclear fission, 2 cents.

Now, if a lot of consumers put solar panels on their roofs but remain connected to the grid, then they will pay less to the utility which stands to fail to get back its fixed costs.

So, eventually the customer will get an electric bill that itemizes a much larger fixed cost for the connection and a lower variable cost for the actual power.

In the meanwhile, there will be a lot of 'politics' where people with solar panels want to pay not enough for the fixed cost of the grid which will mean that people without solar panels will pay too much.

And the people with solar panels will want to be able to sell power back to the utilities which; such power will cause engineering problems on the grid, and the solution of these problems will raise the fixed costs.

For the batteries, so far they are too expensive. Same for home electric generators. Generally a big problem with electric power is that storage is very expensive.

Net, for generating electric power, super tough to improve on the results of the last 100 years in electric power engineering where the power comes from falling water, burning coal, or nuclear fission.

In simple terms, for the grid, really no one wants power from unreliable sources such as wind and solar because (1) still need the fixed cost of the present system for when the wind is not blowing and the sun is not shining, (2) wind/solar variability can cause stability issues on the grid (to be solved by a 'smart grid', that is, more fixed cost for the grid), (3) the good wind/solar sources are generally too far from the major grid demands meaning long distance transmission lines (more cost). My guess is that if take the subsidies away from wind and solar, then for the grid wind/solar will fall like a lead balloon.

Broadly, wind/solar for the grid asks us to pay for fixed cost twice, once for wind/solar and again for our current system for when wind/solar are not providing enough power. Heck, except for dress up, I have just one pair of shoes and wear them rain or shine -- I don't have separate shoes for rain and then shine. I have one computer for night and day and not separate computers for each. I want to pay for just one source of fixed cost of electric power, not one source on days with wind or sun and another source otherwise.

Power from wind/solar may be useful, say, for smelting aluminum, generating hydrogen from water, providing energy to make gasoline for water and coal. Note something these three candidate uses have in common: The output is easily stored, that is, buffered. Then notice the problem of electric power for the grid: The means of storage are far to inefficient.

For the grid, as far as I can see, wind and solar are just nonsense pushed by a 'wind/solar subsidy industry' that wants to talk people into measuring temperature not with thermometers but pictures of polar bears.

There is another candidate, small nukes. So, from Japan can buy a 'box'. In a neighborhood, dig a hole in the ground, install the box, and cover it over. Connect the box to the grid of the neighborhood. Then the box, just buried in its hole in the ground, provides all the electric power for the neighborhood for, say, 20 years. The savings are maintaining the long distance power transmission from the power station to the neighborhood. Of course the interior of the box is a nuclear fission reactor.

Now if my startup works and I get rich and build a nice place in the rural hills of, say, New Hampshire, then maybe I will be able to get such a box! Also for my 4 wheel drive truck to get around in the winters, use that power to make gasoline from water and coal! Maybe!

This is nice if it leads to a switch to cheaper localized non monopolistic electricity. However, I wonder if the chain reaction could lead to widespread utilities bankruptcies and maybe even cascate to another debt crisis affecting the already fragile financial and government sectors.

Well, that's basically what private care ownership did to private streetcar and bus companies in the first half of the 20th century. Many of today's "public transit" agencies started life as bailouts (takeovers, the only reasonable kind of bailout) of private companies who could not compete with the car.

To be honest, that would be an awesome thing to watch it unfold.

More likely that you'd see an informal/distributed 48VDC grid spring up. Less than 50V isn't considered "real" wiring by the NEC and goes largely unregulated. Think low voltage path lighting, doorbell wiring, thermostat wiring, etc.

So if you and your neighbors can share power via 48VDC with no approval then you can run your own inverters to power your household stuff. There are plenty of grid-following micro-inverters that can be purchased fairly inexpensively.

Forklift batteries cost a few grand but give you many kilowatt-hours worth of energy storage. Considering that the average US house seems to use about 1kW of power on average a 40kWh battery pack would allow huge amounts of flexibility to decide when to run a generator, use solar cells, wind turbines, etc. http://www.midwestlifttrucks.com/offgrid.html

The problem is cost per delivered kWh over the life of the battery, sans charging inefficiencies.

No Lead-Acid I know of actually beats out grid power in this application yet (you can about break-even, but what's the point?).

Some of the new, cheap Lithium-Ion batteries may do it, but a game-changer would be a low-cost fuel cell of some kind (rechargeable Iron-Air for example would be incredibly cheap).

At least here in Michigan, DTE Energy is pushing efficiency and solar. Part of this is a legislated requirement, but I think the big motivator is how the regulator calculates their profit margin. AFAIK, they don't make their margin on selling electrons, but on capital investment. Higher utilization of their generating capacity just means slimmer profit margins. Most of their plants are 40-50 years old so they have plenty of capital investment and profits headed their way even if solar cuts into demand. I could be wrong about any or all of this, since I'm working off memory and I'm not going to read 100 page regulator reports.

Utility companies are in the power business I don't see why that means a giant plat full of machinery.

Say a little old lady wants solar panels but is in no way capable of installing them anymore than she can install plumbing.

Power utilities should offer solar panels, wind turbines, battery storage systems. Even electrical to hydrogen foe storage.

The power company should be like an ISP only instead of modems they service power generating devices.

I think this is a fascinating argument and makes sense. However, Is the EEI really someone we trust with a report like this? It seems - given their position - they have a lot to gain and little downside in trying to scare what are essentially politicians into helping protect them. Perhaps that's why the media ignored this report to begin with?

The report is interesting BECAUSE the EEI represents the institutions with the most incentives to resist change.

One of the best tales regarding an entrenched utility, costs, and an individual wanting to hook into the grid. Ken Adelman has made his name known for a number of things, but his fight w/ PG&E was one of the more memorable ones --


A similar cycle will trash the gasoline car industry when electric meets the combination of [cheap, useable] that is sufficient to trigger a demand reduction / supply contraction cycle in the less fungible parts for gasoline cars.

Actually, it looks like it's according to one consultant that one of the utilities hired. But it's about long-term trends that are interesting enough. A summary by a more careful writer would be appreciated.

If they are regulated monopolies, it seems like any issue they complain about is directly addressable by adjusting the rates they are allowed to charge, so as to keep their profits reasonable.

This piece overlooks the fact that utilities can install solar power cheaper than a residence can. This will always be the chase. Electricity will drop in price accordingly.

Although the point of the article is to identify a snowball effect with distributed solar generation vs. fossil fuel, that angle leaves out a lot.

Obviously utilities companies will (try to find a way to) pivot, and provide services or guarantees that a disconnected setup would not have.

Hell, they may even install panels on your roof when your house is built in exchange for discount/free energy, and sell the excess for profit.

But transmission losses will be lower when generation is closer to the point of use, and storage costs may be too (eg, hot water tank or "accumulated" AC in a well-insulated house, vs. expensive batteries).

Generation and transmission are two different utility businesses. This article is about how people are not going to want to pay to be hooked to the utility "just in case".

I believe people will. E willing to pay quite a bit, just in case, because that power is extremely valuable to someone when they are otherwise facing the prospect of having none.

Solar doesn't have to be expensive up-front thanks to companies that lease solar systems like SolarCity (who's chairman is Elon Musk, ran by his cousins).

Ironically widespread availability of solar power could lead to increased pollution. Purely hypothetically, if somehow it became popular for people to generate some, but not all, of the power they need from solar panels then perhaps people would pay less money to the power companies. Power production becomes less profitable and there's less demand for expanding supply. Meaning that the cheapest power production that requires the lowest capital investment will win out. And that's coal.

That used to be coal. Now it's natural gas. The gap has grown large enough in some places that coal plants get converted to run on natural gas.


This is actually a huge deal. Coal advocates disparage environmentalists about the coal industry going down the tubes, when its really US fracking efforts that are driving down the cost of natural gas.

Peaker plants are typically natural gas, not coal. Coal plants are very large, very capital heavy, and cannot be adjusted as finely. (At least in California/USA. I can't comment on other parts of the world.)

I wonder when CSP tech is going to be talked about in the mainstream. It seems like when it comes to solar, people just think of PV.

Excellent news then! I would certainly prefer more solar power, and it looks like the utilities agree it's possible.

How long before the utilities (likely successfully) lobby to make PV/DER illegal, I wonder.

Soon, I'd wager. As I see it, the purpose of this report is FUD, which is usually the opening move of any protectionist initiative.

Edit: alternately, they'll push to tax it to high hell, or at least argue that they own sunshine (like water utilities do over rainwater collection) and should therefore be paid by PV users.

I think that's an unfair and cynical view of the goals of utility companies. Some utilities may lobby to make distributed PV illegal, but I believe only to protect people and the integrity of the grid.

-A former utility engineer

The goal is to enhance shareholder value. End of story.

That's not the end of story. The reality is that utilities are filled with thousands of employees. Not every employee has the sole goal of enhancing shareholder value.

Anyway, enhancing shareholder value isn't necessarily at odds with allowing people to generate electricity with distributed solar. You can defer quite a bit of capital expense (e.g. power lines) if the load gets reduced by generation.

Finally, for some regulated utilities, maximizing revenue doesn't mean maximizing profits. Sometimes regulations set the profit, and there are ways to game it that don't involve running the utility as a private-profit-maximizing firm.

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