Comments 1 to 6:

1. michael sweet at 06:57 AM on 21 April, 2014

   Today (April 20) the Los Angeles Times ran an article about conservatives, including the Koch brothers, trying to get net metering chnaged to make rooftop solar less economical.  The utilities have figured out that rooftop solar challenges their business model and are trying to charge people exorbitant amounts of money to be connected to the grid.  These arguments will undoubtedly continue for a long time.  Progressive countries, like Germany, will lead the implementation of disbursed generation.

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2. Tom Curtis at 08:11 AM on 21 April, 2014

   michael sweet @1, the issue of feed in tarrifs is slightly vexed. With to high a feed in tariff, it pays the person installing solar panels to change their energy consumption habits so that they consume most electricity at night time. Indeed, when we were sold a solar panel at our house (in Qld, Australia), we were actively encouraged to do so by the salesman, in order to maximize our return from the solar panel. The effect, if we had followed his advise, would be to minimize the mitigation advantage of the solar panel. It also maximized the costs to the distribution network. On the other hand, any feed in tariff lower than the mean wholesale price of electricity to the power company represents an implicit subsidy of the power company (and indirectly of other consumers) by the person buying the solar panel. Indeed, any price less than the wholesale price of renewable power, where that is marketed at a premium, represents such a subsidy.

   It follows that ideally the feed in tariff should fall between the wholesale and retail prices of electricity. That does represent a subsidy of the person with the solar panel installed - but that is a good thing. We want to subsidize renewable power to mitigate climate change. Treating all subsidies as bad is equivalent to saying that the market should determine all prices - and the unrestrained market has a good chance of turning the Earth into a place that cannot sustain advanced economies, or a global population in excess of 2 billion. Therefore pointing out that a pricing structure represents a subsidy is not, by itself, an argument to remove that pricing structure.

   Having said that, if there is large scale take up of solar panels, distribution costs will represent an ever larger proportion of electricity company costs. The suggestion that bills should be broken into two components - a connection fee plus a rate on electricity consumed is reasonable, provided it is done to all customers, not just those installing solar power. If done, however, it should be legislated that profits from the connection fee not exceed those from the electricity tariff; and that companies not providing a discount on the connection fee to households using solar panels also not be permitted to count the solar power generated by that household towards renewable energy targets. Lacking the first, companies will have a perverse incentive to inflate the connection fee so as to deflate the impact of the tariff on their total earnings. Absent the later, or some equivalent measure, the effective subsidy for domestic solar power will deflate as it is taken up by more and more people.

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3. rkrolph at 14:58 PM on 22 April, 2014

   I read the Times article and thought it was pretty misleading in saying that solar users are getting a big advantage and attractive prices for power they produce using net metering.  I have solar panels on my roof in the LA area, and the cheapest rate I have to pay is 13 cents per kWh for Tier 1.  But for any net excess my panels produce that goes out on the grid for other consumers to use, I am only credited at the wholesale rate of around 3 cents/kWh.  I don't get how that is taking adavantage of the utility company. 

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4. michael sweet at 19:52 PM on 22 April, 2014

   Tom,

   There will undoubtedly be long arguments about what is a fair rate for net metering.  The article linked references the attempt by ALEC and the Koch's to make solar users pay up to $100 just to link to the net.  Since this is more than many people pay for delivery of electricity that seems much too high.  The Koch's are trying to make solar uneconomic by raising the net metering.  As rkrolph says, in Claifornia the net metering is so low that I have heard (no cite) of many peoploe installing smaller systems so that they produce no excess electricity since the utility makes all the money on it.

   The utilities have realized that solar is cheaper than buying their product and they are trying to keep out solar by increasing fees.  Hopefully voters will wise up to this strategy.

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5. CBDunkerson at 21:33 PM on 22 April, 2014

   The objection that distributed solar users get to use the electricity grid while paying less than other customers (or nothing if they generate more power than they use) is theoretically valid. The 'proposed solutions' to this 'problem' have all been utter nonsense.

   As Michael noted, ALEC was pushing for monthly fees of between $50 and $100 in Arizona. At those rates we'd have to believe that a majority of every electric bill goes to grid maintenance rather than power generation. Even the $5 monthly fee Arizona settled on is almost certainly more than the utilities are spending on grid maintenance... $5 * ~100 million residential households in the U.S. = $500 million per month. That'd work out to $6 billion per year spent on grid maintenance, and that's not counting non-residential customers.... yet most of the U.S. grid equipment is more than a century old and huge sections go offline for weeks every time a major storm rolls through.

   The reality is that actual grid maintenance costs are miniscule. The utilities should split out a flat charge (I'm guessing less than a dollar per month) to apply to every customer and reduce the cost per unit of electricity accordingly. Nice simple solution to the 'problem' requiring no legislative action at all. They aren't doing that because the 'problem' is purely a pre-text for attempts to place absurd extra charges on solar. If they succeed then they will simultaneously slow the growth of solar and steal profits from people who do install solar power on their homes.

   That being said... there is now a real chance that in a few more years the cost of solar and/or electricity storage will have fallen enough that customers will be able to go off grid entirely and still save money. Either solutions like that or states which refuse the 'maintenance charge' nonsense will lead to solar becoming extraordinarily successful in some areas... which will eventually result in voters demanding the same nearly everywhere.

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6. Tom Curtis at 23:10 PM on 24 April, 2014

   A close look at responsible investment in coal:

    

   h/t to Coby Beck

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