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Seems like they need a middle ground - not selling at wholesale prices or full retail. Putting the price at wholesale doesn't take into account the costs for th

Seems like they need a middle ground - not selling at wholesale prices or full retail. Putting the price at wholesale doesn't take into account the costs for the homeowner (or a 3rd party company like SolarCity) to invest in solar panels. Selling at retail doesn't take into account cost of grid maintenance for the power companies. It also doesn't make a lot of sense to me that they charge higher fees to connect to the grid. Definitely seems like a big win, short term, for the power companies. It seems like a big lose for renewables. Everyone seems to focused on whether it's perfectly fair or not - whereas I would say the goal of getting to environmentally friendly energy must weigh into the discuss - but hey, that's me. Side note: I would be curious how much grid maintenance costs the power companies relative to their other costs.

ethbro 11y ago
I don't see where the argument against retail (possibly minus a small amount) comes from. Effectively, they're deleting load from close to the end user from the utility's books. If that load hadn't been deleted, the utility would have charged retail pricing in order to generate it. The small negative adjustment from retail would come from the fact that the utility is still servicing the solar user as a retail user. So still needs to charge a set amount for admin costs & transmission (NOT generation) infrastructure. Paying them wholesale is pretty ridiculous, and is a blatant abuse of the fact that they're a monopoly enshrined in law. If the state decides that you can't sell your electricity to anyone else because they anoint a utility, then that utility should absolutely be banned from exploiting that position to compensate solar generation less than it could. If utilities can't balance their long-term amortizations of recent/new plants, then the state government can step in an reimburse them over the top for the disruption.
- Armisael16 11y ago
  The utility also has to be prepared to provide you with the power that you aren't using (if there's a solar eclipse or something). The marginal cost of power generation is very low, so you save them almost nothing by not using the power.
  - ethbro 11y ago
    The marginal cost of average power is very low. At least for solar in the south (air conditioning), the marginal cost of peak daytime power is much less so. Remember that capacity is sized for peak utilization: the gap between average load and peak is load is extremely expensive, as it's by definition low-utilization compared to base load generation.
- rhino369 11y ago
  >If that load hadn't been deleted, the utility would have charged retail pricing in order to generate it. Sure but they would have only paid to wholesale rate to generate the power. It's like going to the gas station and trying to sell them gasoline at their retail price. Why would they do that when they buy it at a cheaper price from someone else.
hnnicker 11y ago
I have solar panels on my house. During the summer when they produce more than I use, pretty much all the excess power goes into my neighbor's house. So if the utility says "you pay retail when the meter spins forward, but get wholesale credit when it spins backwards", then I could make a deal with my neighbor to run some power lines from some of my panels to his side of his meter and charge him just below retail. That way my neighbor and I both pay less for power overall. This arbitrage shows that only crediting wholesale prices is the wrong price.

ethbro 11y ago

I don't see where the argument against retail (possibly minus a small amount) comes from. Effectively, they're deleting load from close to the end user from the utility's books. If that load hadn't been deleted, the utility would have charged retail pricing in order to generate it. The small negative adjustment from retail would come from the fact that the utility is still servicing the solar user as a retail user. So still needs to charge a set amount for admin costs & transmission (NOT generation) infrastructure. Paying them wholesale is pretty ridiculous, and is a blatant abuse of the fact that they're a monopoly enshrined in law. If the state decides that you can't sell your electricity to anyone else because they anoint a utility, then that utility should absolutely be banned from exploiting that position to compensate solar generation less than it could. If utilities can't balance their long-term amortizations of recent/new plants, then the state government can step in an reimburse them over the top for the disruption.

Armisael16 11y ago
The utility also has to be prepared to provide you with the power that you aren't using (if there's a solar eclipse or something). The marginal cost of power generation is very low, so you save them almost nothing by not using the power.
- ethbro 11y ago
  The marginal cost of average power is very low. At least for solar in the south (air conditioning), the marginal cost of peak daytime power is much less so. Remember that capacity is sized for peak utilization: the gap between average load and peak is load is extremely expensive, as it's by definition low-utilization compared to base load generation.
rhino369 11y ago
>If that load hadn't been deleted, the utility would have charged retail pricing in order to generate it. Sure but they would have only paid to wholesale rate to generate the power. It's like going to the gas station and trying to sell them gasoline at their retail price. Why would they do that when they buy it at a cheaper price from someone else.

hnnicker 11y ago

I have solar panels on my house. During the summer when they produce more than I use, pretty much all the excess power goes into my neighbor's house. So if the utility says "you pay retail when the meter spins forward, but get wholesale credit when it spins backwards", then I could make a deal with my neighbor to run some power lines from some of my panels to his side of his meter and charge him just below retail. That way my neighbor and I both pay less for power overall. This arbitrage shows that only crediting wholesale prices is the wrong price.