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Clean Power An Enormous Question for ‘Solar Choice’

Published on April 29th, 2014 | by Guest Contributor

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A Clear Solution To Climate Change, Net Metering Is A No-Brainer For This Massachusetts High Schooler

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April 29th, 2014 by
 
green team

I’m Ben Schlegel, a 15-year old sophomore at Manchester-Essex Regional High School in Massachusetts. I consider myself an environmentalist and am part of the Manchester Essex Green Team, a group of high school students who work to bring sustainable solutions to our community, like school composting and a recent school waste audit. My parents taught me at an early age to care for the environment, and with climate change wreaking havoc in every corner of the globe, I feel more now than ever that it’s my duty to educate the public about climate solutions available right now. So, let’s talk about solutions. When it comes to solar energy, rooftop solar, enabled through net metering, is a simple solution that is easy to implement, can have a huge impact, and just makes sense.

Have you heard of net metering? Maybe not, but as solar power becomes more ubiquitous, you’ll be hearing more and more about this term. For me, it all boils down to choice. Every American should be able to choose where their energy comes from, just like they’re able to choose what they eat or where to purchase their groceries. No one should be locked into using dirty energy from fossil fuels. In fact, as a nation, we should encourage residents to transition their households to clean energy, like rooftop solar, so youth like me can have a shot at a climate-stable future.

high school net metering studentAlright, so what is net metering? Simple. If you have solar panels on your roof, net metering allows you to send any extra energy that you produce back to the grid and get credit for it. This means that when I go to school during the day and my energy use at home is low, my solar panels can pump electricity back into the grid and net metering allows me to earn full credit for that electricity. When I get home at night and my energy use goes back up, I can draw on that credit I banked up. Net metering is as simple as that. Good for my wallet and good for the planet. You can probably imagine how a benefit like net metering could greatly increase the proliferation of residential rooftop solar use! That’s great, right?

Okay, so here’s what’s not cool. Today, US residents have disproportionate access to the benefits of net metering because of differences in state policy. Some states have strong net metering policies and some don’t, and that’s a problem because solar is a far superior choice to dirty fossil fuels which cause climate change and damage human health.

Plus, in addition to staving off climate change, net metering is also a strong economic choice. California public agencies and schools will save a whopping $2.5 billion in electricity costs over the next 30 years using net metering. It also provides substantial statewide economic benefits in terms of jobs, income, and investment. Imagine if public schools across the nation utilized rooftop solar and benefited from the financial incentives of net metering. The results would be welcomed in terms of relieving the financial burden of many of our bankrupted school districts.

It’s clear that we need to jumpstart the shift to a clean economy and begin the transition entirely away from fossil fuels. Net metering empowers customers to go solar. More solar customers mean more jobs for the installers, electricians, and manufacturers who work in the solar supply chain. Today, the solar industry employs nearly 143,000 American workers in large part due to strong state net metering policies that have allowed the solar industry to thrive.

Now for more bad news. Unfortunately, some utilities perceive net metering as a lost revenue opportunity and they are trying to hurt it in Massachusetts and around the country. The truth is that net metering policies create a smoother demand curve for electricity and actually empower utilities to better manage their peak electricity loads! Who knew? By encouraging generation near the point of consumption, net metering also reduces the strain on distribution systems and prevents losses in long-distance electricity transmission and distribution.

It seems like a clear and simple choice to support net metering for a strong Massachusetts economy and a safe, stable climate.

I’m not old enough to vote yet, but some of you reading this are. I ask that you reach out to your legislators to resolve this issue and preserve net metering in Massachusetts. We need to extend the current net metering cap and open the door for all of Massachusetts to go solar.

I’m doing my part by educating the public about a climate solution available to us right now, using net metering to encourage widespread growth rooftop solar. Won’t you do your part?

About the Author: Ben Schlegel is a 15-year-old sophomore from Manchester-Essex High School in Manchester-by-the-Sea, Massachusetts. He was taught to respect and care for the environment at a very young age, and that’s why he joined the Manchester-Essex Green Team in high school. This group participates in a wide range of projects that protect the climate and environment. Recent projects include single stream recycling, composting and a marine debris clean up by the seaside. Ben enjoys playing sports in his spare time, including baseball and basketball. He’s also an avid dirt biker and enjoys exploring the trails behind his grandparents’ house in New Hampshire. 

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  • Doug

    Utilities should not be opposed to net metering for residences and small businesses that are merely offsetting their electricity use. It nearly all cases, this electricity is generated and provided to the utility during “peak hours” when electricity is expensive with debit/credit occurring during non-peak hours when the electricity is less expensive. This arrangement naturally favors the utility financially and reduces the need to construct and maintain peaker power plants – this reduces their overall capital costs and enables the utility to profit from the arbitrage.

    What I sense is really happening here is that the utilities are using their monopoly power to maximize profits. Even if growing use of residential net-metered solar increases utility profits, the utilities will still argue for even more increases.

    It is strange that the utilities don’t complain about customers that substantially increase their utility use, for instance by purchasing an air conditioner. These customers are putting extra loads on the grid, during peak hours, requiring additional capital investments. A residential solar user, in contrast, re-balances the grid and allows the utility to buy surplus renewable energy low rates and resell this electric to another customer at maximum peak rates, probably to a house within a block of the source of generation.

    • Bob_Wallace

      Look up at my comment which begins with “Well written, Ben.”.

      Look at the graphs at the bottom. Solar makes peak hour electricity cheap. It takes an amazingly small amount to change the rate structure. All that has to happen is to knock the gas peakers off line.

      • Doug

        With smart meters and time of use rates with flexible demand charges, peak power plants are doomed.

        • Bob_Wallace

          Perhaps. Has that been demonstrated anywhere yet?

          I suspect we’re going to need storage and/or peaking plants for the morning/evening peaks. At least for a long time.

          • Doug

            I’d like to see it demonstrated. At present, the demand curve starts rising at 6pm. Is it just a coincidence that this is when on peak hours end? I don’t think so.

  • Bob_Wallace

    Well written, Ben.

    But let’s look a little closer at net metering. It sounds like a good and fair thing at first consideration. And it is as long as there is little end-user solar on the grid.

    When there’s little end-user (customer/rooftop) solar the electricity that end-users can’t use gets sent to the grid. Utility companies get to sell that electricity to other customers at peak price. And then they pay back the end-users with cheaper off peak power.

    But, surprisingly, it takes not very much end-user supplied electricity to destroy the high midday wholesale electricity price. Take a look at the graph below at what happened in Germany after they added a modest amount to the retail side of the meter. The wholesale cost of electricity dropped to the level of late night electricity. The expensive generation wasn’t needed.

    Now imaging how net metering would work in the post-solar lower graph. End-users would be feeding in electricity that was worth much less than what the utility would have to pay for earlier morning and evening power.

    Utilities would be forced to accept “cheap” electricity and pay back with more expensive electricity.

    We need a payment system that is fair to both side, end-user and utilities. Net metering, unfortunately, isn’t it.

    • Cog

      Edited.

      Reason – Disqus’ failure to disclose. You will get a more free dicussion away from social media aggregators. Especially ones that are up front about their platform. Please, reconsider.

      • Bob_Wallace

        To reply to the comment you took down. Germany gets less than 10% of its electricity from solar.

        Apparently even the small amount of solar that Ca has on line is starting to drop prices.

        It takes a surprisingly small amount of solar to impact the price of electricity. Consider, gas peaker plants don’t run many hours per year. Some only a few hours per year. In order to recover their costs they have to charge a lot per hour. Solar knocks them right out of competition.

    • Otis11

      Agreed Bob – but let’s not let great be the enemy of good. If we could get a good net metering bill in every state, preferably with the condition that it only applies to the first 7-10% of peak load, (To keep things fair for both sides until we can pass better legislation) that would be a start. At that point, I think we start talking about the great solutions.

      We’ll eventually need to switch from net metering to some sort of value of solar payment system. I’m personally in favor of simply making all customers pay for what the use according to a time-of-day pricing model where the generators get money based on the formula $ = (A – B*distance)*Kwh where A is the value of the power and B represents the cost of lost power/cost of maintenance per mile of lines used. Multiply this by the distance from the source where the energy is produced to the average distance necessary for the electricity to travel to be fully consumed. (We could also easily add a C cofactor that demerits type of generation, but that gets political – quickly.)

      Use merit order pricing to figure A out and every generator gets the same A for that time period. Centralized generators lose a lot of electricity in line losses (both electric losses and cost) while distributed gets docked much less as it doesn’t travel as far. Now, the pay-back cost would probably come out to be 5-15% less than the cost to buy the electricity off the same grid, but that’s fair as the owner is using the grid. Keep in mind though, that the cost of power during the day can be twice that or more of the night cost – so the generator benefits too, and rightfully so. This also would encourage people to put their panels in the best orientation – as south facing panels explode, prices drop, it becomes better to face your panels west. Once that drops, we start seeing more facing east.

      System may seem hard to calculate, but it can all be automated based on supply/demand numbers in real time. Thoughts?

      • Bob_Wallace

        ” a good net metering bill in every state, preferably with the condition that it only applies to the first 7-10% of *peak* load,”

        How about a FiT with rates tied to some measurement of installed costs? Adjust the FiT rate down periodically to reflect the lower system costs.
        (Make sure to limit the amount at any FiT level so that things don’t get out of control.)

        That’s easy to understand. People can look at the current rate and say to themselves “If I get in before the rate resets down the next time I can make a little money by finding the lowest priced (quality) installer.” Sign a letter of intent to install by a given date. If not met then open the allotment to someone on the waiting list.

        That means that people would do a bit better than just breaking even. And would put a lot of pressure on installers to cut their costs.

        Once people had recovered system costs under the FiT, or system costs plus a percentage, then they start getting wholesale rates for what they send to the grid.

        They then can decide to sell for wholesale or install storage.

        • Otis11

          I’d very much support a FiT where the tariff was say, 20c/kwh for the first 5% of peak demand, and then drop it 5c for every % increase until 0… That actually dovetails quite nicely with what Solar contributes to the grid. (to be clear, I’m suggesting the FiT be on top of the normal electric rate in the area)

          Though, it might be better to make this curve smoother instead of 5c jumps. And to optimize the contribution of solar you would have to break the different sections apart so that you don’t have, say one county producing all of the allowed power for the entire area… that wouldn’t alleviate the transmission issue)

          I’d also very much support establishing an incentive for storage, but idk that a FiT is the best way to meet that. I’d have to do some more research…

          • Bob_Wallace

            I think it would be important to make the system as simple to understand as possible.

            -Here’s Our Offer-

            For the first 10,000/whatever people who sign up we will pay you 20c/whatever for every kWh that you deliver to the grid with your home solar system for 10/whatever years.

            The system must be no larger than 5,000 (whatever) watts and must be correctly installed.

            This will be on a first come, first severed basis. Once we receive more than10,000/whatever applications any other interested people will be placed on a waiting list.

            You will be required to complete your system by (one year out). If you do not complete then your slot will be offered to the next person on the waiting list.

            Small print at the bottom in large print and clearly written. Set up a Q&A page.

            Encourage individuals to set up discussion forums where they can discuss installers, problems, etc.

            Set the rate at a level that will pay off the system in less than 10/whatever years including financing. Make it possible for people to clearly make a modest profit plus end up with a paid off system.

            That way there’s no “the computer is going to adjust things around and give you a fair deal”. Or “you’re going to have to get someone to explain this to you”.

            After their system is paid off they can look at what the grid is willing to pay for their power and what it would cost to store and make their decision. That way the utilities are not locked into some multi-decade deal.

          • Otis11

            So, the computer equation was actually for the base price for every generator (to use in computing how much every generator gets paid, from the coal plant to the wind farm). The FiT I proposed would be on top of that base price. In general you could explain it by simply saying “the average home will get 4-6c/KWh, plus the feed in tariff, which currently stands at x c/KWh.

            I agree, there are simpler ways to do it, but that would be the most economical way I’ve come across to address all of the inequalities in energy from a grid perspective.

            A quip with your proposal – I really dislike limiting how much someone can put on their roof. Why does someone who normally uses 1000 KWh/month have the same limit as someone who uses 4000 KWh/month? In my opinion the owner should be able to put as much solar on their roof as they see fit (and are able to fit). Also, I don’t like the waiting list thing – takes too much time. I think it’d be better to say “The FiT for this month is x,” you qualify for the month you turn in your paperwork. The tariff will go down from month to month based on total installed capacity. Sure, you might have a little overshot, but limiting it to a month will limit how much overshot you get. Trends tend to be fairly predictable. You could even add a line that only y MWh will be approved per month where Y is, say 0.5% of total peak demand. Excessively high, but keeps a bound on it.

            Oh, and I like the 10 year thing. 20 years honestly makes more sense given the lifespan of these devices, but it’s such a long term commitment both people and governments are afraid to make something that far out. Accept a non-ideality in order to get more support.

  • JamesWimberley

    Well argued, Ben.

    What you don’t do is analyse the argument of the opposition. This would be roughly that a solar householder is a generator, and generators can’t expect to get the full retail rate for their output. This is because the grid has to be paid for and maintained: power lines, transformers, reserve generators to make sure the lights can always be kept on.

    In some US states, but not all, every customer pays a fixed charge to cover these services already, which looks fair enough. Is this what happens in Massachusetts? Should the fixed charge rise when lots of people buy solar panels, because they are making the generation mix overall more variable and less responsive to changes in demand?

    You may be surprised to learn that Germany has had a very successful policy to encourage solar energy using a quite different mechanism, the feed-in tariff (FIT): a price for fed-in electricity guaranteed for 20 years. This started out in 2000 at 50€c per kwh for rooftop solar, more than double the retail rate, and has now fallen to 14€c, about half of it. The rate was set until recently to provide householders with a reasonable return on investment for a competently planned installation. (Source: Fraunhofer – trustworthy independent researchers IMHO, report here, chart page 10).

    What both FITs and net metering have going for them is transparency. You may want to check out the value-of-solar tariff or VOST, discussed on this site and elsewhere. In principle this can be the fairest method of all, but it is complicated and opaque to all but experts. You have to trust the process by which it’s set..

    One important thing you will need to take on board in political argument is that many of those taking part have agendas. Some good arguments may be made by untrustworthy people and organizations. My advice is to listen to them, but don’t waste time arguing with them. One good rule of thumb is that sources are reliable when making or implying points against their own interest. For example, when utilities start lobbying as in Arizona to impose high charges on solar home-owners, that means they concede that solar energy is cheap enough to create a threat to their business model.

    Can you trust me? Or Zach or Bob? Make up your own mind.

    • LookingForward

      I think he did analyse it:

      “The truth is that net metering policies create a smoother demand curve for electricity and actually empower utilities to better manage their peak electricity loads! Who knew? By encouraging generation near the point of consumption, net metering also reduces the strain on distribution systems and prevents losses in long-distance electricity transmission and distribution.”

      I read in an article that transmission losses in the US, because of the sometimes huge distances, are around 5/6%.
      Since most energy is consumed during the day and solar produces energy during the day near the point of consumption (within a few miles instead of sometimes 100s of miles). Those savings alone compansate for maintaining the grid.
      When decentralised renewables and storage are big enough those losses can be cut down to below 1%. (thinking of scenarios where remote towns and villages are producing there own energy.)

      Here in Holland net-metering has been around for years and if you overproduce anually, you get paid for the production, just as much as the utility pays for production, so not equal to or more then the price of the electricity rate, like with FITs.
      I think with the way prices are now with solar, that’s fair for everyone and should be adopted by the entire US.

  • Oz Wishbone

    Hi Ben, what an inspirational article. Keep up the good work.

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