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The quote is talking about a problem the utility companies are facing with the adoption of personal PVs. Right now, the way your electricity bill is structured

The quote is talking about a problem the utility companies are facing with the adoption of personal PVs. Right now, the way your electricity bill is structured is heavily biased towards consumption. The service charge is a small part of the overall bill. What happens if 50% of the costumers have PVs is that the utilities will lose a lot of revenue but they will still have exactly the same amount of costs because they are not able to turn down their plants during the day and the PV people will still consume the same amount of peak grid energy during the night. So there is two ways to fix this. One of them is for the plants to downsize their constant power generation methods like coal fired boilers and get a bunch of gas peaker plants. The other one is to increase the service charge on your electricity bill.

jws 11y ago
This gets into the other billing problem with domestic solar. In rough numbers, half of your electric bill is for energy, the other half is to pay for all the grid and capacity. Billing is purely on energy consumption. The effect of this is that low electric users get subsidized by high electric users. When someone installs a domestic solar system they reduce their payments, but they still depend on the grid infrastructure. The system reaches its ultimate perversion when a grid tied domestic user achieves a negative bill. Not only have they been paid for their energy, they have been paid for the utility having a grid. You can solve this economic distortion by a couple of ways: • split billing into a grid-tie fee and an energy consumption charge: This accurately covers the solar houses, but it also raises the bills of the poor and cuts those of the wealthy (generally larger consumers). • only pay domestic solar producers half what you charge for power: This works out asymptotically for a huge producer where the grid portion vanishes, but it doesn't work for people reducing their consumption but maintaining a grid tie or selling a little bit. • put a surcharge on each watt of solar capacity: This works out accurately, but feels abusive. 1 watt of solar panel is going to make about 100 wHr of power a month. If grid-tie privilege includes a surcharge to cover the grid portion of 100wHr then this 1 watt solar panel user will end up paying the same for the grid as he did before. If a domestic solar installation is a net producer, it will end up getting paid for the energy and the grid fees will cancel. Even before we get to a point where the power company may say "no thank you" to a domestic user that wants to sell power at 1pm on a sunny day, we still need to straighten out the billing. The current system ends up with the utilities (and by extension all grid users) subsidizing solar installations by forgiving their grid costs. I'm in favor of that now, but in a future where our carbon emissions are under control the distortions will need to be smoothed out.
- jarek 11y ago
  > Billing is purely on energy consumption. This is not the case in many jurisdictions, and sometimes varies within a jurisdiction. In British Columbia, my summer electric bills were regularly more than 50% constant fees. In England, providers offer plans with varying levels of constant fees/"standing charge" and only very few plans have zero standing charge.
CaptSpify 11y ago
> they are not able to turn down their plants during the day Why is this? Can they not regulate how much output they produce by shutting down "sections" of the plants?
- jarek 11y ago
  Very long start-up times on many plant types, particularly coal and nuclear. (I think on order of days for coal? And nuclear is shut only for maintenance.) You see hydro and gas being used as peakers since they can vary their output much quicker.

jws 11y ago

This gets into the other billing problem with domestic solar. In rough numbers, half of your electric bill is for energy, the other half is to pay for all the grid and capacity. Billing is purely on energy consumption. The effect of this is that low electric users get subsidized by high electric users. When someone installs a domestic solar system they reduce their payments, but they still depend on the grid infrastructure. The system reaches its ultimate perversion when a grid tied domestic user achieves a negative bill. Not only have they been paid for their energy, they have been paid for the utility having a grid. You can solve this economic distortion by a couple of ways: • split billing into a grid-tie fee and an energy consumption charge: This accurately covers the solar houses, but it also raises the bills of the poor and cuts those of the wealthy (generally larger consumers). • only pay domestic solar producers half what you charge for power: This works out asymptotically for a huge producer where the grid portion vanishes, but it doesn't work for people reducing their consumption but maintaining a grid tie or selling a little bit. • put a surcharge on each watt of solar capacity: This works out accurately, but feels abusive. 1 watt of solar panel is going to make about 100 wHr of power a month. If grid-tie privilege includes a surcharge to cover the grid portion of 100wHr then this 1 watt solar panel user will end up paying the same for the grid as he did before. If a domestic solar installation is a net producer, it will end up getting paid for the energy and the grid fees will cancel. Even before we get to a point where the power company may say "no thank you" to a domestic user that wants to sell power at 1pm on a sunny day, we still need to straighten out the billing. The current system ends up with the utilities (and by extension all grid users) subsidizing solar installations by forgiving their grid costs. I'm in favor of that now, but in a future where our carbon emissions are under control the distortions will need to be smoothed out.

jarek 11y ago
> Billing is purely on energy consumption. This is not the case in many jurisdictions, and sometimes varies within a jurisdiction. In British Columbia, my summer electric bills were regularly more than 50% constant fees. In England, providers offer plans with varying levels of constant fees/"standing charge" and only very few plans have zero standing charge.

CaptSpify 11y ago

> they are not able to turn down their plants during the day Why is this? Can they not regulate how much output they produce by shutting down "sections" of the plants?

jarek 11y ago
Very long start-up times on many plant types, particularly coal and nuclear. (I think on order of days for coal? And nuclear is shut only for maintenance.) You see hydro and gas being used as peakers since they can vary their output much quicker.