Clean Power

Published on September 10th, 2015 | by Guest Contributor

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Spread of Net Metering, & Utility Backlash — Net Metering History Part 3

September 10th, 2015 by  



by Roberto Verzola

[Roberto Verzola is the author of Crossing Over: The Energy Transition to Renewable Electricity, a book published by the Friedrich Ebert Stiftung which was launched on March 23, 2015. The online version of the book as well as the article this post comes from can be downloaded freely. See Part 1 here and Part 2 here. The author may be contacted at rverzola@gn.apc.org. All references are indicated in the e-book.]


Net Metering Spreads

Despite stiffening opposition from utilities, some 16 U.S. states had a net metering program by 1996, going up further to 22 U.S. states by 1998. Of the 22, six enacted net metering laws, 14 established net metering programs via public utility commissions and the regulatory process, and utilities in two states implemented a net metering program voluntarily. In 2000, the number had gone up to 30.

In 2001, California RE advocates managed to pass a temporary measure raising the maximum size allowed for net metering from 10 kW to 1 MW, opening the scheme to larger structures and business establishments. The measure would end August 2002. A major legislative fight ensued, with solar advocates trying to extend the measure, and utilities trying to stop its extension. The measure was extended, but utility lobbyists managed to insert deal-breaking amendments. Net metering credits for large-scale solar producers were reduced by up to 50%. Customers were required to install an additional meter, at the customers’ expense, unnecessarily complicating the scheme, as well as making it more expensive. An enthusiastic businessman who was also an environmentalist, Fred Adelman, submitted his net metering application for a 30-kW system immediately, on the day the 10-kW cap was lifted. He received an email from PG&E requiring that before he could connect to the grid, an engineering impact study would have to be performed at the customer’s expense. Nothing happened for a month. When Adelman called PG&E to follow up, he was informed that he would be charged $605,000 because the company would have to upgrade their local distribution network first. Adelman eventually got the charges reduced to $11,000, but only after a long and costly legal battle. In short, even with a net metering law passed, hostile utilities continued to sabotage the program.

The year 2012 was a watershed: that year, 99% of all installed PV systems in the U.S. were net-metered. The trickle of do-it-yourself citizens who now had the means to generate their own power was turning into a flood. In September 2012, alarmed U.S. electric utility executives gathered in Colorado and agreed that distributed generation (DG) in general and net metering in particular was a “disruptive technology” that threatened their centralized business model with “declining retail sales,” “loss of customers” and “potential obsolescence.” They decided to launch a major effort to stem the tide. Their main target: net metering and its parity pricing feature.

The “net metering war”, as some accounts put it, began in earnest in 2013. By this time, there were net metering programs in 43 U.S. states and the District of Columbia. South Carolina became the 44th in December 2014. Where net metering is not mandated by law or the regulators, utilities usually credit those who send their surplus to the grid the avoided cost of the exported electricity, which is usually lower than retail price. The battles, however, continued to rage. As a 2013 news story put it:

“The fate of rooftop solar net metering—the credit homeowners get for putting kilowatt-hours on the grid—is being fought in states across the country . . . . Utility companies, which make their money selling electricity from centralized power plants, have sought or are seeking to limit the payments for the distributed generation coming from thousands of solar panels.

“The Edison Electric Institute, which represents investor-owned utilities, has identified distributed generation as a potentially ‘disruptive technology’ that could compete with utility companies . . . . “In state after state, utility companies are seeking to change net-metering programs.”

Utilities Against Net Metering

The utilities’ main target has been the parity pricing scheme behind net metering. They argue against it in a number of ways. Edison Electric Institute (EEI), which “represents all U.S. investor-owned electric utilities,” uses the following argument:

“Because of the way that net metering policies originally were designed, net-metered customers often are credited for the power they sell to electric companies, usually at the full retail electricity rate, even though it would cost less for the companies to produce the electricity themselves or to buy the power on the wholesale market from other electricity providers.

“Many energy experts agree that net-metered customers should be compensated at the wholesale price for the electricity they produce, similar to other electricity providers. This reflects the fact that electric companies buying this power still must incur the costs of delivering the power to their customers, including the costs of maintaining the poles, wires, meters, and other infrastructurers required to deliver a reliable supply of electricity.”

Thus, EEI argues, net-metered customers should be credited only for the wholesale price (what we call in the Philippines the average generation charge or the “blended cost” of electricity), not the retail price of electricity. Net-metered customers, EEI insists, must still pay for the “cost of transporting and delivering the electricity through the electric grid to reach a customer.”

The simple answer to the EEI argument is that the liability for these transport and delivery costs have been transferred to the neighbors who used the exported surplus, because this surplus registered on their meters. Thus, all the costs which EEI claims are being avoided by their net-metered customers are actually being paid by other customers who used the surplus. If this seems confusing, imagine again our analogy with the LPG tanks. The owner of the backyard biogas digester returns one of the three tanks he ordered, pays only for two, and asks his neighbor to pay for the third instead. The neighbor, accepting this transfer of liability, agrees to pay for the tank as well as its delivery charge. So everything is fully paid for.

EEI, on the other hand, wants to credit the customer who returned the third tank only the cost of the tank’s contents, and to bill him—and the neighbor as well—the delivery charge for the same tank. The EEI position will in fact result in double-charging. If you want to be polite, call it a hidden subsidy.

Another vocal critic of net metering is the American Legislative Exchange Council. ALEC uses an interesting analogy to support its position against net metering:

“Imagine you have a home vegetable garden and have had a very good year and a bumper crop of tomatoes. Do you consider it somehow appropriate for you to send those tomatoes down your local grocery store and expect to sell them to the grocer at the same price that he sells to the public? How would that help him pay his rent, and maintenance and heating bills for the store? The taxpayer has already paid you to grow tomatoes. Why, you have even made the grocer pay to have the tomatoes carried from your house to his store. Won’t this arrangement raise the cost of tomatoes and other groceries to other shoppers? Well, that’s exactly what net metering does. It forces the grocer—the utility—to buy a wholesale product at retail prices.”

The ALEC analogy is faulty because it is incomplete. A full analogy would involve you ordering, say, 30 kilos of tomatoes from your grocer (which your grocer perhaps imported out of state), delivered to your doorstep, for which the grocer charges you the retail price that covers all the grocer’s costs, including the transport of the tomatoes from another state to the grocer, plus of course the cost of home delivery, the grocer’s profits, government taxes and so on. As the ALEC analogy says, you have a bumper crop of tomatoes. So you accept only 20 kilos of the delivered tomatoes. But your next-door neighbor, who also wants tomatoes, agrees to get the other 10 kilos. So your grocer’s delivery service brings the 10 kilos to your neighbor instead, which your neighbor pays for in full. As for the 20 kilos which were delivered to you, you also paid for them of course—in full. Clearly, the grocer was in fact fully paid for his 30 kilos of tomatoes.

ALEC is arguing that your refund should only cover the wholesale price; you should still pay for inter-state transport, delivery charges to your home, the grocer’s profit, and government taxes for the 10 kilos you returned, although your next-door neighbor already paid for them. ALEC is trying to justify the double-charging that is currently being inflicted by U.S. utilities on non-net-metered solar PV owners, who are sending their surplus to the grid to be used by their neighbors but are getting credit only for the wholesale cost of electricity.

Whether it involves electricity, water, tomatoes or LPG, crediting only the wholesale and not the full retail price of returned items that were absorbed and fully paid for by neighbors is double-charging. If you are at the grocery checkout counter, and you decide to return an item you just paid for, and which the next person on the line agrees to buy for its full price, you have the right to demand a full refund.

ALEC further claims that net metering advocates “miss the fact that they are using utility property without paying for it.” ALEC is apparently referring to the fact that the net-metered surplus passes through utility-owned posts and wires on its way to the neighbor.

Our reply: The boundary between utility and customer property is the electric meter. It is the equivalent of the grocer’s checkout counter. While the “dirty” 50 kWh was travelling on transmission and distribution lines, it was the property of the utility. As soon as it passed the customer’s electric meter, turning it forward, it became customer property. And as soon as the net-metered customer’s 50-kWh solar surplus passed his electric meter and reversed it on the way out, that 50 kWh became utility property. The ownership change occurs at the electric meter, like the ownership change that occurs at the checkout counter. ALEC is wrong to claim that solar rooftop owners “are using utility property without paying for it.” It is the utility, as the new owner of the 50-kWh solar surplus, which used its own posts and wires to deliver the surplus to the next-door neighbor. And since this 50 kWh will register on the neighbor’s meter, the utility will get fully paid to the last dollar for its service.

The Utilities’ Perspective

Finally, for the sake of argument, let us accept the utilities’ perspective, that the 50 kWh that goes into the net-metered customer on one hand, and the 50-kWh surplus exported by the same customer, should not count as a single transaction involving a simple transfer of liability, like returning an item that is then paid for by another customer, but should be treated as two completely separate transactions.

Let us accept that the 50-kWh consumption by a customer can be treated and metered separately from his 50-kWh surplus that he exports to his neighbor. In such a case, utilities are now in a position to price exported surpluses separately from regular electric meter readings. The utility still bills the solar customer the full retail price of his 50-kWh consumption. When the customer subsequently exports his 50-kWh surplus to a neighbor, the utility also bills the neighbor the same full retail price of 50 kWh for the exported surplus. The question now is: what value should be assigned to that solar surplus? How should it be priced? EEI, ALEC and their allies are proposing to price it below retail. They want to deduct the cost of transmission, distribution, etc. and keep these for themselves, and then credit the exporter of the surplus for what remains, what they call the “wholesale price” of electricity. Very roughly, this means half of the retail price will go to them, and half to the exporter of the surplus.

What is wrong with this scenario? At least two things:

1. Let us trace the path of the 50 kWh once more. At the genco, the 50 kWh passes through several transformers as it is stepped up in voltage and sent through the transco’s very-high-voltage transmission lines. At the end of the final transmission line, the chunk passes through more transformers to make it more suitable for the DU’s high-voltage distribution lines. Eventually, the chunk is stepped down further in voltage and until it is suitable for the DU’s low-voltage lines that serve residential and commercial neighborhoods. Throughout this process, the chunk accumulates charges representing the added-value of the hundreds of kilometers of those transmission and distribution lines. Finally, the 50-kWh chunk reaches the customer’s premises and is promptly consumed. This 50-kWh transaction registers as a forward movement on the meters of the genco, the utility, and the customer.

When the sun is high in the sky, on cloudless days, the solar rooftop customer generates a surplus of 50 kWh, so it goes out to the grid. Under net metering it will simply reverse his meter back to zero. But the utilities want it metered separately so that they can assign a lower price to this outgoing surplus. As soon as it is metered, the solar surplus is on the grid, owned by the utility. (See Figure 4.)

Net Metering 4

Figure 4. The solar surplus and the equivalent amount that it replaced

Electricity follows the path of least resistance, and the longer the wire, the greater the resistance. Thus this surplus is delivered from the net-metered customer to his nearest neighbors who have some appliances turned on, a distance in the order of a hundred meters or less. (We assume one neighbor only, for simplicity.) This neighbor-to-neighbor transfer of surplus avoids the cost of moving electricity from the gencos to the consumer, a distance in the order of hundreds of kilometers. It avoids the costs of going through high-voltage transmission and distribution lines, transformers, and their associated supervisory control and data acquisition systems. One-thousandth the distance roughly means one- thousandth the cost. Thus we can say that the cost of this neighbor-to-neighbor transfer, like returning an item and asking a delivery service to bring the item to a next-door neighbor who will pay for it instead, is negligible. It is too cheap to matter. Yet, the DU will charge the neighbor the full delivery fee for this chunk, as if it had delivered the surplus from a distant generating plant through the utility’s high-voltage lines and transformers, to the neighbor.

The cost of that neighbor-to-neighbor transfer is “negligible”, but it is not zero. So, not charging for it is still a loss to the utility, isn’t it? Far from it. Rather than recover this negligible amount from the neighbor, the utility actually has better options. First, there are carbon markets which are bound to grow as global warming and climate change take their inevitable toll. Distributing carbon-free electricity commands value in these markets. Also, most utilities are required to distribute some renewable electricity, under what are usually called renewable portfolio standards (RPS). Utilities may be subject to fines if they don’t meet their RPS obligations. Utilities that are over-quota can sell their surplus to those that are under-quota. Hence, moving a net-metered customer’s surplus to a neighbor is again worth money to utilities. In fact, in a market where prices will be set by much larger chunks of renewable electricity distributed on the grid over hundreds of kilometers from wind and solar farms, it will be worth much more than its actual cost.

Should the utilities then spare the neighbor of these transmission, distribution and other charges? If they did, it would be a windfall to the neighbor, who is expecting—and willing—to pay the full retail price for his meter reading.

We argue that this added-value belongs neither to the utility nor to the neighbor. Who invested the money to generate renewable electricity at the point of use, bypassing the expensive transmission and distribution system of the grid? Who displaced 50 kWh of conventional electricity, resulting in less greenhouse gases, less energy insecurity, less local pollution and less displacement of local communities? Who avoided electricity from expensive peaking plants, thereby bringing the average cost of electricity down?For these things, we have the RE-adopters to thank. They created all these added values; they should get the credit for the neighbor’s potential windfall.

2. Let us now consider the actual value of the solar surplus itself. U.S. utilities would value it at roughly the same rate as the average generation price, about half the retail price, the utilities keeping the balance. Yet, utilities themselves pay a range of prices for other types of electricity that they buy. During peak hours, they regularly pay higher than retail for electricity coming from oil- or natural gas-fired plants, not the retail price minus delivery and other charges. Solar surpluses typically occur when the sun is shining brightly high in the sky, when demand for electricity is high and utilities buy electricity from peaking plants at prices higher than the retail price. This peak-hour price is what utilities usually avoid when they are taking surpluses from solar rooftops. If solar surpluses are to be paid the avoided price of electricity, should not solar surpluses be paid higher than retail rates too?

In fact in many countries that implement feed-in-tariffs, solar electricity (and other clean renewables) are bought at higher than retail prices, because their societies value these types of electricity more: they don’t cause health problems, displace communities, poison the environment, warm the globe and change the climate, deplete non-renewable resources, and so on. They also create more jobs, rely on local resources, enhance energy security, ease regional and global tensions around contested oil reserves, and do not cause nuclear proliferation. The debate instead in these countries is: how much higher than the retail price do clean renewables deserve?

Thus, parity pricing for renewables is already the middle ground between, on one hand, those who believe they should be valued higher than retail as most feed-in-tariff implementations do and, on the other hand, those who think they should be priced lower than retail as many utilities insist. Anti-net metering lobbyists do not want a compromise. They want their unreasonably extreme position to prevail. To make this happen, they have been calling parity pricing a “subsidy” for renewables. We have already explained earlier why this is not a subsidy at all: crediting the net-metered customer the full retail price for his surplus is no different from crediting a customer at a grocery checkout counter the full retail price for an item he is returning, knowing that the next customer on the line is willing to pay for it, also at the full retail price.

Now, let us face the issue of subsidies squarely. We have shown that parity pricing under net metering is no subsidy. This does not mean that we do not want subsidies for renewables. Not all subsidies are bad. Subsidies are a valid option for governments to encourage things to move in a desired direction, or to support important efforts that cannot otherwise take off the ground or cannot do so fast enough. Subsidies to renewables belong to this category. Renewables will help improve our energy security especially under worst-case scenarios like peak oil. Renewables also reduce pollution and mitigate climate change. Solar panels on rooftops do not displace communities, poison them, or cause nuclear proliferation.

Historically in the energy sector, however, the biggest subsidies have been enjoyed by the nuclear and fossil-fuel industries. G20 governments, for instance, continue to subsidize fossil-fuel exploration to the tune of $88 billion per year, more than twice what the top 20 private companies are spending. A report of the U.S. Energy Information Administration released on March 12, 2015 shows that in 2013, the electricity sectors which received direct subsidies from the U.S. federal government included: fossil-fuel ($4.1 billion); nuclear ($1.7 billion); transmission and distribution ($1.2 billion); solar ($5.3 billion); wind ($5.9 billion). The U.S. EIA emphasizes that their report does not include all subsidies. In addition to money from governments, producers of dirty electricity enjoy hidden subsidies too. By externalizing large parts of their costs, fossil-fuel-based generating plants (and think-tanks that they fund) enjoy enormous hidden subsidies that are eventually paid for by local communities and the general public in the form of health costs, social costs, environmental costs and costs from climate-related disasters. The utilities’ demand for impact studies, one-time “net-metering” charges, recurring “meter-reading” charges, etc. from their net-metered customers are not only artificial barriers against distributed renewables. They are also hidden subsidies for the utilities themselves.

In summary, under the scenario implementing what the utilities want, they will be overcharging the neighbor with imaginary transmission and distribution costs which were never incurred. They will also be underpaying net-metered customers for their high-value surplus. The result: hidden subsidies for the utilities. The various costs can be more properly assigned and fairly calculated of course. But this will then complicate things a lot, requiring additional metering equipment and major changes in billing and accounting procedures. In the end, we will end up with something that is very much like a full transfer of liability from the owner of surplus to his neighbor. And this can be implemented very simply if we accept for billing purposes the readings from meters that reverse when power flows in the opposite direction. In short, we will end up with something very much like net metering.

Finally, we offer another hypothetical case as the final test whether net metering causes losses to the utility or not: Someone runs a diesel-fuelled synchronous generator (one that can sync with the grid). Due to an accidental connection, it ends up sending out 50 kWh into the grid, reversing the careless owner’s meter by 50 kWh. The 50 kWh go to a neighbor whose appliances are on, turning
the latter’s meter forward by the same amount. The neighbor pays the utility for the 50 kWh added to his meter.

Here is the test: Is anyone else due any other payment? Specifically, did the accident cause the utility to subsidize the careless owner? Perhaps some unpaid transmission, distribution and other costs associated with 50 kWh of electricity?

Let us check all three perspectives. The neighbor’s perspective: He paid for 50 kWh which he actually consumed as reflected in his meter reading. So he has no problem. The neighbor’s payment, however, goes not to the careless generator owner who actually supplied the 50 kWh, but to the utility whose 50 kWh was erased from the meter. The utility’s perspective: The neighbor’s payment fully covers the lost income from the 50 kWh that the careless customer had already consumed but accidentally erased from his meter. So the utility should have no problem either. The careless owner’s perspective: Diesel is expensive. The retail price of the 50 kWh he extinguished when he reversed his meter is less than the cost of electricity from the diesel generator, so he is not happy with the accident. It is clear, however, that he got no subsidy from the utility when he reversed his meter. He owes nothing to the utility or to his neighbor. A utility claim to recover a “subsidy” would be spurious and will not prosper.

When you come to think of it, whether the export of 50 kWh was accidental or not is in fact irrevelant. If the careless owner intentionally generated more surplus and sent it out to the grid, we can go through the analysis once more, and the result will be the same: he would not owe anything to the utility or his neighbor. He would be losing money of course, but this is his own business, not the utility’s. However, if the cost of electricity from the generator were cheaper than retail (as it would be if he used rooftop solar panels), he would be saving money. Then he would want to do it again and again.

Thus, net metering encourages more private investments in solar panels and other low-cost renewables—something that even small-players and low-income families can participate in—without without any subsidy from the government or the utility.

The anti-net-metering Institute for Electric Innovation (IEI) makes a big case out of their finding that an increasing number of solar rooftops are being leased. Because of this, IEI says, the delivery charges that they want to credit to the utilities are going mostly to solar leasing companies.

IEI has inadvertently revealed the true problem with private utilities. It is called envy. The utilities are envious that money which can be going to them are now going to solar leasing companies instead. They are envious that renewables now seem to get more subsidies than they get. The solution is in fact simple: the utilities can compete with solar leasing companies and themselves offer similar services to their customers. Consumers can then decide, in true market fashion, whether to lease from the utility or from any of the competing solar leasing companies.

Utilities have been treating customers as captive clients who have no choice but to passively obey whatever terms the utilities dictate, just like mainframe computer and landline operators did in the past. They are so used to treating customers this way that under net metering, they get a persistent feeling that they are “losing” something. Of course they are, but it is not something they are entitled to. They are losing the competition in a freer market; they are losing customers and market share.

Low-cost solar panels on rooftops and small-scale wind turbines are permanently changing the rules of the game. Net metering will minimize transaction costs, remove barriers to entry, and make it truly easy for low-income families and other small-scale players to join. Users of electricity can now empower themselves, in more ways than one. Utilities cannot stop them anymore. Like operators of mainframes and landlines, utility operators must learn to adjust to the new realities and accept their reduced role in the future: at night, or when there is not enough sun or wind, or when there is too much sun or wind.

When they go to the government whining that they should be compensated for their “losses” under net metering, they are basically asking for more subsidies.


About the Author: Roberto Verzola has a degree in electrical engineering and has worked in the information technology sector since the late 1980s. But he has also been a social activist for most of his adult life, including three years as a political prisoner in the 1970s. Earlier this year, his book “Crossing Over: The Energy Transition to Renewable Electricity” was published by the Philippine office of the Friedrich Ebert Stiftung of Germany. Verzola is president of the newly-created Center for Renewable Electricity Strategies, a non-profit organization focused on helping local governments in the Philippines set up showcase communities which source 100% of their electricity from renewable sources. in a way that is economically viable both for investors and consumers. He may be reached at rverzola@gn.apc.org.





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  • I don’t want to be off topic but all afternoon I’ve had six phase electrical generator parts in my hands.
    Six phase is better but the power companies are too cheap to duplicate parts at the sub stations.
    Is this not true….six phase is better?

  • Bob_Wallace

    “greedy monopoly utility profit”

    I want to address this (without addressing a specific commentor).

    The distribution part of a utility pretty much has to be a monopoly. We can’t have half a dozen grids attached to our houses so that we can create competition.

    Greedy? That implies that utilities are making huge profits.

    Below I’m posting average return for various market sectors (ranked on average return for the last five years).

    Look at how low utilities rank. Return on investment is less than half the highest two sectors. If utilities are “greedy” then they’re pretty poor at pulling it off.

    • SeaCorey

      None taken Bob.

      If you’re claiming that utilities are not part of the most profitable industrial complex in the history of humanity (fossil fuels) and thereby traditionally not an attractive investment I challenge you to back that up.

      My comments are admittedly based on Florida, as I’ve been careful to make clear. Present or spin the information any way you like, but in Florida the utilities have a well-known and well-documented stranglehold on the legislature and especially the Public Service Commission. They use that, in concert with the disinformation you’re presenting, to restrict the growth of distributed generation.

      Here utility profit margin is a set percentage, so the only way to increase the growth of the ROI to investors is to sell more power each year at an exponentially increasing rate. DG, to paraphrase the utility industry, disrupts that business model.

      This exchange continues to be about nothing other than the growth of investor-owned-utility profits.

      • Bob_Wallace

        ” I challenge you to back that up.”

        Look at the Energy sector in the graph I posted. Click on it to embiggen so you can see the details.

        Second lowest sector.

        Go to this page and look at more detailed returns.

        http://news.morningstar.com/stockReturns/CapWtdIndustryReturns.html

        The five year return for oil refining and distribution is high. Second after biotech. But oil refining and distribution has zero to do with electricity.

        Utility natural gas is doing OK, but it’s not part of electricity.

        Look at coal. -14.97% avg for 5 years. Coal is used most for electricity.

        • SeaCorey

          The attractiveness lies not in the volatility of potentially record-high returns, but in the almost guaranteed returns of such a ubiquitous and (for now) stable commodity.

          • Bob_Wallace

            Yes, people have put money in the utility sector not for expected high returns but for expected stable returns.

            Of course, that puts the lie to “greedy”.

          • SeaCorey

            Thanks again for confirming that my points are accurate and relevant.

            Utility lobbying and other lopsided influence over the legislature (again, at least here in Florida) exposes them as greedy.

            And frankly, I don’t fault businesses from protecting their interests and the interest of their investors – until they do so with speculation, skepticism, spin, and outright lies like solar raises costs and rates for non-solar owners, and whatever you’d call the disingenuous tactics you’re trying to employ here. It’s been quite a while since that nonsense crossed the line from free speech to yelling “Fire” in a crowded theater (when there is no fire of course).

            If the only thing you have to focus on at this point is my describing utilities as greedy, which is blatant at least here in Florida, then we may be making progress.

          • Bob_Wallace

            Florida, as in Florida Power and Light?

            “Florida Power & Light Group (NYSE: FPL) is Florida’s largest electric utility with over 4.5 million residential customers.[1] FPL also sells its energy, through its wholesale segment, to utility companies located in over 27 states. Like many utility companies, the rate at which it can charge customers for electricity is highly regulated. As a result, its earnings are often impacted either by the rate set or FPL’s ability to control costs.

            FPL generates its energy using a diversified combination of energy sources including natural-gas, wind and nuclear power. It is considered an industry leader in terms of green and renewable energy, as it generates substantial amounts of its electricity through its 7,500 wind turbines. FPL Group plans to add 8,000 to 10,000 megawatts of new wind capacity to their portfolio by the end of 2012.[2] Also, FPL Group’s retail operations in Florida are particularly susceptible to adverse weather conditions such as hurricanes and tropical storms.”

            “As of March 2010, FPL was able to get an adjustment on the rate they are allowed to charge. Beginning in March, FPL would increase rates by approximately $75 million a year, to increase its return on equity (ROE) to 10% .[3]”

            http://www.wikinvest.com/stock/Florida_Power_%26_Light_Company

            Now FPL is not a hero of mine, they’ve held back on solar and tried to push nuclear. But a 10% return on equity is not highway robbery.

            Florida electricity prices are more than a penny less than the national average. It doesn’t seem to me that Floridians are getting screwed.

          • SeaCorey

            Yes, that’s correct. The ROI is defined by State law.

            The only way they can increase returns to investors is to sell more electricity. Through financial influence they basically control and write what legislation the legislature and PSC enact, thereby stymieing DG and creating a significantly “less-than-free-market”. (So much for our overwhelmingly republican legislature supporting free-market principles).

            Floridians are getting screwed big-time. Pointing at the $/kWh (which btw varies widely in the state) and saying “it’s low so what’s the big deal” is like saying “don’t worry you only got a little bit raped”.

          • Bob_Wallace

            You pay less than the national average and you’re getting raped?

            Is there some part of the state that pays rates similar to Hawaii?

          • SeaCorey

            Are you being serious? I’m very surprised to have to explain this to you.

            My point was to ask if you’d expect someone to not mind getting only a little bit raped, my mistake to give you an opportunity to distract from the point. Let’s try “Would it matter less if someone only dropped a small brick on your foot rather than dropped a cinderblock on your foot?”.

            Or: “If someone broke into your house and only took something that doesn’t cost much to replace you wouldn’t mind? But if they took something expensive you’d be upset?”.

            It has nothing to do with how high or low rates are, it’s about having a level playing field for businesses (that aren’t big utilities) and allowing home- and business- owners to consider options other than total dependence on the grid at the mercy of inherently unpredictable (except that they will go up) rates.

          • Bob_Wallace

            I’m being serious. You’ve got access to electricity at a good price.

            If you can add enough solar to provide your needs when the Sun is shining for less than the cost of grid electricity then bolt on some panels.

            If you want to add more than what you can use and then ask others to provide you with free “storage”/backup then you are being unreasonable.

    • SeaCorey

      Noone has claimed or implied that the distribution network should or could be segmented into half a dozen grids attached to our houses – where’d you get such a wacky idea?

      • Bob_Wallace

        A monopoly means only one supplier.

        Obviously running multiple parallel grids would be wacky.

        Complaining that the grid is a monopoly is whacky.

        • SeaCorey

          I used that word as an adjective, not as a complaint. Thank you for verifying that I used it correctly.

          I’m glad we seem to agree that you didn’t get the idea of parallel grids from me. So where did you get it?

          • Bob_Wallace

            Notice that I started a new thread with “I want to address this (without addressing a specific commentor)”.

            I did it that way specifically in order to not bring any individual into the “fray”. ;o)

            This idea that utilities are monopolies and that’s a bad thing is something I see very frequently. As far as the distribution of electricity, there’s no reasonable alternative.

            There is (apparently) a problem on some grids where the grid owner is also allowed to be the sole supplier. That means that the utility will be tempted to keep lower priced supply off the grid if it cuts into the returns for the power plants it owns.

            But that is not universal. There are (distribution) utility monopolies where one can pick their supplier.

          • SeaCorey

            So why then mention that you weren’t “addressing a specific commentor”?. If your intent truly was “to not bring any individual into the “fray”, you might’ve been more successful by not mentioning it at all… ;o)

            Thank you for verifying that I also used the word monopoly correctly, however I wish you would stop assuming my meaning. I never stated or implied that distribution monopoly was bad. Even if I had, public perception of monopolies has little to nothing to do with the realities of DG and net metering.

            It’s good to know that “[t]here are (distribution) utility monopolies where one can pick their supplier”, home- and business-owners can pick themselves as suppliers.

  • Bob_Wallace

    Net metering simply can’t work in it’s most simplistic form.

    The utility company cannot take in low cost electricity and pay it back kWh for kWh with higher cost electricity without raising the cost of electricity on non-solar owning customers.

    There has to be a ‘fair for all’ system in which the solar roof owner gets paid a reasonable price for their input but also pays a fair share for grid use and the “storage/backup” function provided by the utility.

    • GCO

      I disagree with your blanket statement — and so does reality, as obviously net metering is working quite well today.

      1) As thoroughly explained in this series of articles, the utility gets to bill the exact same amount regardless of whether energy happens to be exchanged between neighbors.

      • Bob_Wallace

        Copper doesn’t wear out but installing the system and maintaining it along with doing the “business” of running a grid have costs.

        With net metering a solar house sends X amount of electricity to the grid and takes X amount of electricity back out. Someone else picks up their grid costs.

        It doesn’t take a lot of end-user solar to destroy the high wholesale price of electricity during sunny hours. Look at the graph below – that’s Germany with only modest amounts of solar. High wholesale sources have disappeared and the value of more end-user solar to the utility plummets.

        At noon on a sunny day net metering would mean that the utility would be paying high prices for power which has low value.

        The only way to make butt-simple net metering work is to require other consumers to pay more for electricity.

        If the cost of electricity to the utility at noon is cheap should other consumers be required to pay as if the wholesale price was similar to 6 PM?

        • SeaCorey

          Solar owners, in Florida at least, pay the same monthly “user charge” as non-solar owners, whether they use (or generate) any power at all that month – except with some co-ops, in which the solar owner’s “user charge” INCREASES dramatically. This amounts to a tax on solar.

          It is a well-debunked myth that solar increases costs and rates for non-solar owners. There are ZERO studies to support that idea, and many real-world case studies which show that solar does just the opposite in US markets.

          • Bob_Wallace

            No, the user charge is a recouping of the utilities cost of providing the grid.

            If you don’t want to pay the user fee then get some batteries, a generator, and some fuel and cut the wires.

            (I’m not saying that that specific user fee is fairly set.)

            I don’t know if solar is or is not increasing the cost for non-solar owners. But it is very clear that if solar owners ‘bank’ power when the cost of electricity is low and take it back when the cost is high and, as well, don’t pay a share of the cost for the grid then non-solar customers are going to be stuck with higher costs.

            The only win-win for solar and non-solar consumers is when the total amount of solar is small/modest and allows the most expensive peak generation to be avoided.

            Utilities are entitled to recoup their costs and make a reasonable profit.

          • SeaCorey

            Yes, that’s my point exactly, the user charge is a recouping of the utilities cost of providing the grid.

            This is why the cry of (not that you’re saying this if you’re not, but it’s very, very common) “Solar owners are getting a free ride / not paying their fair share / not paying for the grid / raising cost&rates for non-solar owners” is not true.

            Your “banking” statement seems to assume time of day pricing, which in my experience is uncommon residentially. TOD pricing does present issues. Luckily DG and soon storage will help alleviate daily pricing volatility and TOD won’t be as necessary.

            Here municipal codes for most properties require connection to the grid to be granted a Certificate of Occupancy so the structure can be legally lived or worked in, so the only way to make the monthly fee go away is to over-generate at abt 35% retail value.

            Completely agree, businesses need to recoup cost with profit. But a dinosaur is a dinosaur, and the smart utility would move from making buggy-whips to windshield-wipers now that the renewable “car” is just barely starting to share some of the side roads with the horse-drawn carriage.

          • Their profits and salaries are already amazing. This is why municipally owned utilities are fairer to all on solar policy.

          • Bob_Wallace

            I don’t have any information about utility executive salaries. I wouldn’t be surprised to see them high because, in general, executives in the US are wildly overpaid. But one would need to take their salaries and determine how much they might drive up the cost of electricity.

            As for profits, utility companies do not earn large profits. Take a look at sector profits. (The list is sorted on five year average return.)

            Wait – the ability to add images is missing.

            1. Healthcare 23.85%
            2. Consumer Cyclical 20.54%
            3. Tech 18.09%
            4.
            5.
            ….
            9. Utilities 9.93%
            10. Energy 8.46%
            11. Basic Materials 6.65%

          • John Ihle

            Utilities are entitled to recoup their costs and make a reasonable profit.

            I don’t know about that. In some instances utilities have made relative recent investments in capacity and subsequent long term commitments in fossil fuel generation without due consideration for other forms of cheaper electricity without full and unbiased analysis, without customer feedback and without providing facts. Indeed; skewing the facts in favor of fossil fuels.

            In these instances I don’t think customers should necessarily be held accountable to pay those investments off. The same goes for transmission investments vs distribution investment/upgrades. Utility facts and lobbying are generally skewed in favor of billion dollar investments and based on decades old utility business paradigms. And the rules protect utilities via territorial laws.

            Renewables and storage are a game changer and, imo, no one has come up with a rationale, that protects the environment and provides more of a localized approach, which is “fair” to all parties.

            Rules/regulatiuons need to be revamped.

          • Bob_Wallace

            I agree that there is a problem of who should pay for a bad decision on the part of utilities. I’m not sure that the rate setting regulation agencies regularly allow really bad mistakes passed on to consumers but I would imagine it happens sometimes.

            There’s a battle going on right now, one that has been ongoing for a couple of years, about how much consumers pay and how much shareholders pay for closing the San Onofre reactors. At this point in time consumers are getting hit with more than half (about 70%).

        • SeaCorey

          These disingenuous attempts to make solar and net-metering seem more complicated than it is and therefore unattractive, and the spurious claim that solar increases costs and rates to non-solar owners seem to be a mechanism to maintain the status quo, rather than be a meaningful discussion of the topic.

    • SeaCorey

      Not sure what your point here is Bob.
      How is the electricity taken in by the utility “low-cost” yet is “[paid] back kWh for kWh with higher cost electricity”?
      The utility is “paying” (which really isn’t the correct word, the utility is not ‘paying’, the solar owner is offsetting usage and ‘avoiding buying’ [same as conserving, just using less]) the same rate for which it’s reselling, the only thing they’re losing out on is profit – which is what this is all about – greedy monopoly utility profit.
      Solar owners, in Florida at least, pay the same monthly “user charge” as non-solar owners, whether they use (or generate) any power at all that month – except with some co-ops, in which the solar owner’s “user charge” INCREASES dramatically. This amounts to a tax on solar.
      It is a well-debunked myth that solar increases costs and rates for non-solar owners. There are ZERO studies to support that idea, and many real-world case studies which show that solar does just the opposite in US markets.

      • Bob_Wallace

        I’ll post the graph again.

        Look at the wholesale price of electricity at noon in Germany on a sunny day. The expensive sources (peakers) have been shut down by end-user solar. In a fair pricing system retail customers would be charged the wholesale cost plus distribution and a reasonable profit amount.

        Now look at the wholesale cost at 7 PM. That’s what it costs the utility to purchase electricity at that time of day.

        Net metering means that the utility would have to purchase much more expensive power (peakers) and hand it back to the solar owners kWh for kWh.

        A utility can’t trade expensive for cheap and stay in business.

        • Bob_Wallace

          Let’s look at net metering this way. Lots of people have home gardens and most of us are overwhelmed with zucchini and tomatoes at some part of the summer.

          Suppose we had a system that allowed us to take our z and tom to the local grocery and hand them over for credit. The grocery would be forced to sell cheap just because z and tom are cheap during that time of year.

          Then we take our credits down to the store in the middle of the winter when summer produce is being flown in from another hemisphere and very expensive. We demand pound for pound refunds.

          Fair?

          • SeaCorey

            So you’re assuming time of day pricing structures? I run into that residentially very infrequently.

          • Big for electric cars in Cali

          • vensonata

            Hey man, see my posting above just 10 minutes ago! I used the Zucchini analogy too! And it was before I scrolled down to your post. Humanity definitely has experience with variability of resources. Solar and wind are just crops.

        • SeaCorey

          The only graph I see in these comments is the age and capacity chart.

          • Bob_Wallace

            Showing for me. Did you click on “More”?

            If so and you still don’t see the graph try refreshing.

          • SeaCorey

            Doesn’t really matter, I’m familiar with and discussing residential and small commercial rates in FL. It sounds like you’re posting info about time of day pricing in Europe.

            I’m concerned about the misinformation circulating about net-metering being unfavorable to any entity other than the utilities, and/or that there is anything unfair to the utility other than selling less electricity.

            The appropriate and meaningful analogy is if the end user installed energy efficiency measures and simply used less. All of this other noise exists just to overly complicate the issue in order to maintain the status quo.

          • Bob_Wallace

            If end-users use less due to either efficiency or installed solar that has nothing to do with net metering.

            End-user efficiency and installed solar can have an impact on utilities. That is basically why the price of electricity is so high in Australia. The utilities there spent a lot of money upgrading their grid expecting demand to continue growing but it didn’t. Now they are trying to recoup their expenses.

            The same may happen in Georgia when the Vogtle reactors come on line. They were built expecting demand to rise, which hasn’t happened. In fact, now that end-user solar is starting to appear demand may drop.

            Seems to me that you are starting with a belief that utilities are crooks/evil/something bad and trying to find something on which to build your case.

            Try starting with data. Look at price of electricity and annual earnings and see if utilities, or your utility specifically, is ripping you off or just running a business that produces a reasonable return.

          • SeaCorey

            End-users making up to the amount they use annually (assuming simple net metering) and using no electricity are nearly the same thing, with the difference being that solar offers benefits to non-solar owners that mere energy austerity doesn’t.

            It seems to me that you’re putting words in my mouth and trying to cloud the issue.

            I’ve stated that I acknowledge and respect the need for for-profit businesses to make profit, and underscored FL’s IOUs’ greed and dishonorable business practices in their manipulation of our legislature and active dis- and mis-information campaigns against DG.

            Your comments about Australia, Georgia, and reactors have nothing to do with net metering.

            I’ve chased you as far down these rabbit holes as I’m going to for now Bob, it’s clear that you’re only stirring the pot to muddy the water.

          • Bob_Wallace

            Have a nice day, Corey.

          • City owned utilities seem most supportive of solar rebates and value of solar, are more cost efficient.

          • Bob_Wallace

            What might be happening there is that municipal utility companies may not own generation plants that they need to ‘defend’ from the competition of solar.

            Just a guess….

        • Wouldn’t solar produce peak afternoon power directly?

          • Bob_Wallace

            I don’t understand your question.

            If you look at the before/after graphs I posted pre-solar demand rose around 7/8 AM and stayed high until late evening.

            Post solar demand peaks between 7 and 11 AM, drops low, and then peaks again after 5 PM. Germany has a lot of ‘behind the meter’ solar which destroys demand on a sunny day. Then when the Sun sets demand for grid power pops up.

  • BC Hydro not responding to my email re number of sub-stations in my community for an analysis of using available land for a solar panel farm close to the sub.
    I know of only one, and the surrrounding land is too poor to farm on so it is an excellent candidate. D
    Nearby Kimberly, BC got such a project together, enough to power 200 houses.

    • vensonata

      B.C. hydro is not a fan of solar because of the vast hydro power they administer. The grid rates are so low and the power is clean so there is not much incentive. Alberta, on the other hand is perfect, since they are running on coal and have a dastardly reputation from the tar sands. Alberta has great solar resources, even in winter and lots of wind as well.

      • Thanks, The power is dirty because they haven’t hooked up the Smart meters yet, they just use them to bill us.
        The Smart meters could have had power miser digital readouts accompanying them, plus controlling power usage.
        i could cut my hydro bill in half if my sound equipment wasn’t on standby or my water heater or the refrigerator were on a program, lights and fans for that matter.
        BC hydro and local governments should adjust their budgets for food spoilage when their magnificent central power system blacks out due to climate change extreme weather conditions experienced here in the last 12 months.

    • Could do a freedom of information request

  • Marion Meads

    If they try to charge wholesale price when you pump electrons back to the grid, this will surely begin the next step called grid defection, especially when cheaper battery energy storage for residential application is in the very near future, less than 5 years! It would be goodbye utilities for the most part. My next project would be buying my own battery energy storage system, and then I wouldn’t care about the utilities. We call it freedom.

    • Mike Dill

      For now, I will be staying with the grid, at it remains a low-cost source of back-up electrons. I will add a battery to suck up my excess for my use, but I will not go off-grid unless it is truly the least expensive option, or if they really start to annoy me.

  • sault

    Plus we have the issue of the utility “death spiral” where declining electricity sales due to solar decrease the number of kilowatt hours a utility can distribute their sunk costs and guaranteed profit over. This raises the cost per kWh they need to charge to get the same return, pushing more customers to solar, and so on…

    This all happens while solar costs keep dropping and storage looks increasingly viable in the next decade or two.

    Add in the fact that utility scale renewables lower the wholesale electricity prices that coal and nuclear plants survive on and things look fairly bleak for them. All because these hulking plants lock utilities and their captive customer into decades of financial liability while renewable technology moves way faster than they can manage. They’re fighting for the continuation of their privelaged existence, so expect things to get a lot dirtier from now on.

    • Bob_Wallace

      US utilities have built few coal and nuclear plants over the last decade or two compared to the overall fleet size. Many of our large thermal plants are nearing the end of their design life span and are already paid off. (below – add five years to the ages, this is a 2010 graph)

      US utilities will not have the sunk cost problems that other countries might have. Those countries which have built a lot of new capacity in the last 20 years.

      The companies that suffer the most are likely to be coal mining. They are already going out of business. But coal mining companies are not considered utilities.

      US utilities have been building natural gas plants. The installed price of a NG plant is relatively inexpensive (less than solar and wind). Those plants may not run as many hours as solar and wind grow, but they will get used as fill-in and will almost certainly pay for themselves. Those plants may still be serving as our “deep backup” 50 years from now.

      US electricity is fairly cheap. As we add solar we’re likely to see the high mid-day prices drop and our overall average drop below $0.12/kWh. Producing your own electricity for, say, $0.10/kWh will be very difficult especially if you include storage and backup.

      A ‘death spiral’ might happen in places like Australia where the base price of electricity is very high. I don’t see it in the US.

  • JamesWimberley

    An economist would also want to look at the value of the options in standard contracts for electricity supply. You have a meter with a maximum capacity, say 30 KW. You also have panels, with a maximum output of 10 KW, some of which you now export. The total value of the service from the utility is:
    1. value of imported electricity less
    2 value of exported electricity plus
    3. value of option to consume more, up to 30 kw plus
    4. value of option to export more, up to 10 kw.
    The value to the utility is the same list, with signs reversed.

    What’s the difference with the neighbour without panels? Item 3 is slightly more valuable to you per utility kwh, as your net consumption will be lower and more variable. The neighbour has no equivalent to item 4. For the utility, it still has the same peaking liability (30kw), for which it has to pay backup costs; but you are buying less on average. It also has to upgrade the local distribution network to cope with 4.

    So on paper and in theory, the utilities do have a case for charging solar homeowners something. The real question is how much. It seems pretty clear that the US utilities are padding the bill outrageously. Evidence? You get quite different numbers and utility behaviour in markets with unbundled electricity markets (Britain, Germany, Texas) than in “silo” jurisdictions like Arizona. California is in between.

    • Marion Meads

      THE RATEPAYERS HAVE ALREADY PAID FOR ALL THE ASSETS of the utility companies. They have already distributed the profits from all of the prior years. The STRANDING FEE is pure greediness! We shouldn’t be paying for the loss of their projected future profits when they become obsolete. People invest in these companies and it comes with a risk. They’ve been eating a big portion of their cake, now they’ll have to suck it all in and eat some sh*t.

      • I need to (show excellent online freelancing opportunity… 3 to 5 h of work /a day… Weekly paycheck… Extra bonus for job well done…Earnings of $6k-$9k /for month… Just few h of spare time, a pc, elementary knowledge of internet and dependable internet-connection needed…Click on my disqus~~~~page to learn more

    • SeaCorey

      The local distribution network doesn’t need to be upgraded unless the ratepayers use more power. The fact that the power they’re (already) using is generated locally reduces the burden not only on the grid as a whole (including the significant line losses avoided by the local power not having to be transported from a central generation plant) but also reduces the burden on the central generating plant as described above.

      • Bob_Wallace

        We lose more electricity in distribution than in transmission. By upgrading our distribution we can reduce some of the loss. Less loss means that we can close more fossil fuel generation.

        Additionally, the US grid is far from as reliable as desireable. Installing more sensors/communication and creating more redundant supplies can help keep the lights on more of the time.

        • SeaCorey

          I acknowledge that and completely agree Bob.
          I was responding to:
          “For the utility, … [it] has to upgrade the local distribution network to cope with 4 (value of option to export more, up to 10kw).”
          My point (perhaps I should phrase it as a request for clarification of the distinction between distribution and transmission) is that the power generated by “me” that gets on the grid will very likely be used within a house or two (and will incur dramatically less line loss). The local lines carry the same amount of power whether it was generated locally or hundreds of miles away.
          Unless we equate distributed generation with increased consumption (which I do not, I typically see the opposite), I fail to see how DG would create the need to upgrade the local network, and thereby lend credence to the utilities’ claims that net-metering adversely impacts anything other than their profit growth predictions.
          I of course also acknowledge the current grid reliability issues, which seems to increase the value of DG – the less distance the power has to travel the fewer potential points of failure as well as the decreased line losses.

          • Bob_Wallace

            Imagine a new housing development that installs solar on every roof. The neighborhood grid may not be sized to carry 5x as much power as peak would have been expected to be.

            Some/all of that extra power may need to be moved to another neighborhood.

            This is pretty much an extreme case, just pointing out that the grid may need some updating with higher levels of solar penetration.

            The idea of net metering, in its basic form, is simply not well thought out. Net metering can work fine with low levels of end-user solar. It doesn’t make sense with significant amounts of end-user solar.

          • SeaCorey

            You’re right, that is extreme, and contains many “mays”…
            An entire new housing development installing solar on every single roof at this point is pure speculation – unless you’re suggesting some sort of solar mandate, which I doubt.
            But as we imagine, it seems that such a forward-thinking developer would very likely include energy storage (we’re imagining, realistically, years into the future when practical, affordable storage has developed).
            When DG reaches close to 50% market penetration I’d hope the already needed (as you’ve mentioned) grid upgrades will have been addressed.
            Luckily heavy consumption loads (not to be confused with annual peak demand) very much tend to coincide with solar peaking.
            In any case it seems a very, very meager objection to such a common-sense investment (solar) right now. And in no way a meaningful objection to net metering.

          • Bob_Wallace

            Recently in the news there was a report of a new housing development which had solar on every roof. Most likely, with the falling cost of solar, this will become more common.

            Storage has not yet become affordable enough. Perhaps soon, but not today. Remember, Tesla is not shipping and won’t be shipping until the Gigafactory is up and running.

          • SeaCorey

            That’s awesome Bob, where is that housing development being built? I’d love to see a link to that report if you can find it.

            Yes, that’s why I ‘imagined’ that by the time that “report[s] of a new housing development which [have] solar on every roof” become more commonplace and elevate solar to even 5% market penetration affordable and practical storage will be a reality.

            As solar prices fall, as you astutely mentioned, the attractiveness of developing storage increases. I’m confident that imagining affordable and practical storage is at least as realistic as imagining housing developments with solar on every single roof, if not dramatically moreso.

          • Bob_Wallace

            I can’t find the news article. Wiki does have this –

            “n March 2013, Lancaster, California became the first U.S. city to mandate the inclusion of solar panels on new homes, requiring that “every new housing development must average 1 kilowatt per house.”[52]

            In May 2013, Sebastopol followed suit, requiring new buildings include either 2 W/sq ft (21.7 W/m2) of insulated building space of photovoltaics, or enough to provide 75% of the expected annual electricity use.[53].”

          • SeaCorey

            Thanks for that, very good to know. Hopefully the rest of the country follows suit. Preferably through market demand rather than mandates, but common-sense measures like this help level the playing field..

          • GCO

            You sound like those alarmists predicting that PEVs will cause the grid to melt. They obviously didn’t, and won’t.

            You could argue that an entire neighborhood switching to plug-ins on the same day might cause problems. I’d counter that such odd case would be extremely rare and not representative of normal situations at all.

          • Bob_Wallace

            Please don’t bullshit me.

            Some transformers will have to be switched out sooner than scheduled if enough EVs are added in a single ‘neighborhood’. Transformers are sized with the assumption that they will be allowed to cool down at night. With enough EV charging they will not be able to cool.

            This is a cost.

          • SeaCorey

            At what level of market penetration? How soon might that level be realized?

          • Bob_Wallace

            Transformers needing to be replaced?

            I don’t know. I do know that at one point some utilities were asking to be informed when customers added EVs so that they could swap out transformers before they failed.

            I suspect they changed to watching offpeak usage rates and are basing their moves on that data.

            Customers don’t appreciate it when the grid goes down. Things like transformers that have expected lifespans are generally swapped out before they are expected to fail.

          • GCO

            So lower demand due to PV negatively impacts utilities, and higher demand from PEVs also negatively impacts them?
            To reuse your fine wording, please don’t bullshit us. You can’t have it both ways.

            From SoCal Edison [link]:

            Since 2010, of all the nearly 400 upgrades we made to (or identified for) circuits that serve PEV customers, only 1 percent of that work was required due to additional power demands from PEVs.

          • Bob_Wallace

            No, that is not what I said.

            End-users with solar who are able to use the utility as free storage/backup negatively impact utilities.

            Dropping consumption negatively impacts utilities, especially when they were expecting demand growth.

            Plug-in vehicles will almost certainly benefit utilities because they will create demand growth. However there will have to be some modifications made to the grid. This should not negatively impact grids because this is a cost that can be passed on.

          • GCO

            This is where we fundamentally disagree. You’ve yet to substantiate your claims.
            You’re stuck in the “storage and backup” concepts you know well, but no such think happens with grid-tied solar.
            A certain neighborhood consumes a certain amount of energy, and the utility gets paid for 100% of it. Simple.

            Actually, with tiered billing, it gets paid more: those exported kW⋅h compensated for at tier 1 will be bought by others at higher, more expensive tiers, on average.
            And studies like this one [link] keep showing that solar is actually worth much more.

            Again, I fail to see how net metering adversely impacts utilities, now and in the foreseeable future, save for the fact that, by both simplifying metering and not forcing end-user to buy batteries to store electricity readily usable by someone else, it does make PV more attractive indeed. Which is a good thing for everyone.

          • Bob_Wallace

            OK, I think you’re stuck at the low end, not that many people with solar so that whatever is fed in can be sold at rate not too much lower than the morning/evening peak price.

            Let’s take it to the other end where most buildings have rooftop solar. Now huge amount are flowing in, there’s little market for what is being supplied, and the utility has to pay back huge amounts when the Sun is down.
            Does that give you any insight?

          • vensonata

            Yes, at about 25% of rooftops, they will overproduce for several hours, more than the other 75% require. I think this may be the case already in Australia. So then what? Storage for later use seems the next chess move. And we are seeing it happen in Germany and Australia and Hawaii, and indeed California soon. Charging Evs is a form of that storage, but it is not always convenient to charge at peak solar times so I see home storage coming.
            It reminds me of Zuchinni, no one can eat all their backyard production, and at first the neighbors benefit. Then even the neighbors can’t eat it. Then you have to freeze it or pickle it. This paradigm of PV occurs in many models.

          • Bob_Wallace

            I suspect we’ll see a lot more EV charging at work/school which will eat up extra generation. A lot cheaper to add a charge outlet and use that power than to store it and use it later to charge the EV.

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