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The article assumes net metering, which is a huge subsidy for solar. Peak solar generation causes low spot prices for power (see the California "duck curve"[1],

The article assumes net metering, which is a huge subsidy for solar. Peak solar generation causes low spot prices for power (see the California "duck curve"[1], and the negative prices that Germany has on sunny days[2]. In Texas wind can cause energy prices to go negative[3]). The costs of storage must to be included for a fair comparison, so that power can either be saved and used by the household, or provided back to the grid. If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. [1] http://www.bloomberg.com/news/articles/2015-10-21/california-s-duck-curve-is-about-to-jolt-the-electricity-grid http://www.bloomberg.com/news/articles/2015-10-21/california... [2] http://www.pv-magazine.com/news/details/beitrag/german-renewables-pushing-wholesale-electricity-further-into-negative-territory_100019141/ http://www.pv-magazine.com/news/details/beitrag/german-renew... [3] http://cleantechnica.com/2015/10/01/texas-electricity-prices-going-negative/ http://cleantechnica.com/2015/10/01/texas-electricity-prices...

gregwtmtno 11y ago
> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. I mean "should" depends on the goal of the pricing policy right? If the goal is a "fair comparison", perhaps the policy makers should include the cost of mitigating externalities in the price of carbon-producing electricity sources.
- paulsutter 11y ago
  We should absolutely put a price on carbon, yes. That would penalize carbon emissions. Net metering is no substitute for a price on carbon. For real green power, we need to storage to balance out solar generation. Net metering /prevents/ storage from being installed. EDIT: Never going to happen? Actually it's /already/ happened. Examples: - California already has a low carbon fuel standard[1] that regulates "well to wheel" carbon content of transportation fuels (some sources like tar sands have high carbon emissions in the production process[2]). This is a significant step towards a real carbon price and an opening to provide fuels generated through a green process. - California' Emission Performance Standard (EPS) no longer allows use of coal-generated electricity[3] which has caused a complete phaseout of coal plants in favor of natural gas (which has half the carbon intensity). Again, this is a restriction of the carbon-intensity of power generation which is also an effective step towards a carbon price. [1] http://www.wsj.com/articles/california-restores-rule-to-cut-carbon-in-fuel-by-10-1443219215 http://www.wsj.com/articles/california-restores-rule-to-cut-... [2] http://www.scientificamerican.com/article/tar-sands-and-keystone-xl-pipeline-impact-on-global-warming/ http://www.scientificamerican.com/article/tar-sands-and-keys... [3] http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf http://www.energy.ca.gov/renewables/tracking_progress/docume...
  - melling 11y ago
    Ok, let pretend that's never going to happen because it's not going to happen. Where does solar win in the current political/economic environment and where is it close to winning? Making forward progress in the next decade is going to help more than wishing for a level playing field. Maybe we can push solar costs lower once the industry grows: http://cleantechnica.com/2015/08/13/us-solar-pv-cost-fell-50-5-years-government-report/ http://cleantechnica.com/2015/08/13/us-solar-pv-cost-fell-50...
    - TheIronYuppie 11y ago
      For what value of "never"? Carbon tax on the ballot in Washington this fall - http://yeson732.org/ http://yeson732.org/
      - melling 11y ago
        You got me there!! The state that gets 75% of its electricity from hydro leads the way! https://www.washingtonpost.com/graphics/national/power-plants/ https://www.washingtonpost.com/graphics/national/power-plant... As of today, there are still 50 states to go, plus the rest of the world. Better sell your beachfront property. Time"s up.
    - pilom 11y ago
      Residential installation in Denver CO at $2.16/W after federal incentive. Just about exactly grid pairity. Their $3.50/watt number is way high compared to the reality of today in the US.
  - crdoconnor 11y ago
    >Net metering is no substitute for a price on carbon. It absolutely is since there is no price on carbon and no realistic prospect of one any time soon.
    - gburt 11y ago
      $30/ton CO2e in BC, in effect today: http://www.fin.gov.bc.ca/tbs/tp/climate/A6.htm http://www.fin.gov.bc.ca/tbs/tp/climate/A6.htm Of course, that's probably not enough. See Greg Mankiw's "invitation to the Pigou club" where he discusses the research on the "correct" value (estimated at between $80 and $300 per ton): http://scholar.harvard.edu/files/mankiw/files/smart_taxes.pdf http://scholar.harvard.edu/files/mankiw/files/smart_taxes.pd...
crdoconnor 11y ago
>the homeowner should get paid the spot price like every other generator, not full residential rates. Either the other generators should pay a significant carbon tax or the solar / wind producers should get a significant subsidy for polluting less.
- tertius 11y ago
  Just because your competition has an advantage doesn't mean that you can ignore costs. Even if you choose to ignore the costs, a subsidy is a direct monetary cost and not an advantage that you can just force to compete.
  - crdoconnor 11y ago
    That argument doesn't make any sense. Whichever way you look at it there's no justification for giving the same tax treatment to both coal and solar. One imposes an enormous externality and the other doesn't. Whether it's a subsidy for one or a tax for the other is somewhat immaterial. The point is that they shouldn't be taxed the same. Currently coal and gas actually receive massive subsidies, too, while a 30% tariff is slapped on most solar panels imported from China which is even more perverse. We're literally subsidizing pollution because coal/gas are tight with out politicians, while cheaper, cleaner forms of electricity generation are rendered purposefully less competitive.
    - cmdrfred 11y ago
      > Whichever way you look at it there's no justification for giving the same tax treatment to both coal and solar. The same? Not even, fossil fuels get significant subsides on top of paying nothing for the emissions and that's just the tip of the iceberg. In June 2010, the U.S. Energy Information Administration (EIA) said $557 billion was spent to subsidize fossil fuels globally in 2008, compared to $43 billion in support of renewable energy.[1] [1]http://www.sourcewatch.org/index.php/Federal_coal_subsidies http://www.sourcewatch.org/index.php/Federal_coal_subsidies
      - 11y ago
upofadown 11y ago
> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. Sorta. Because solar is distributed the economics related to transmission are different. If your solar panel is mostly powering your neighbours air conditioner then you are reducing peak load on the transmission system which can be a very valuable thing. If your solar panel is powering someones air conditioner one state over then there is no benefit to the distributed generation. The catch is that the situation can change from hour to hour and day to day. The proper amount to pay the small distributed generators can be hard to determine.
- paulsutter 11y ago
  If you really want to balance out the grid to account for distribution and transmission costs, you still need storage, and net pricing disincentivizes storage. Spot prices are already location-dependent, and yes a real distributed smart grid would do this on a micro scale, and a correctly designed smart grid would incentivize local storage. Which is what I think you mean by "hard to determine".
phkahler 11y ago
>> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. The home owner then buys a few kW of battery storage and saves the energy for their own use later. This has the same effect on them as net metering once they pay for the storage unit, but only up to the point that they produces exactly as much as they use.
encoderer 11y ago
Yes if you consider utilities as a business that sells power for more than it pays, net metering is a subsidy. But if you think a utility has a special responsibility to the public, and I for one do, it's hard to defend charging me more for a kW coming into my home one moment than I get for one going out the next.
- toomuchtodo 11y ago
  Utilities aren't comfortable with the fact that generators will go out of business, and only transmission will remain as a non-profit ISO-type entity (coordinating energy distribution and storage).
notatoad 11y ago
This comes up in every discussion about solar power, but it seems unfair to me. Yes, solar is subsidized by a whole bunch of factors. But so is coal and oil, because the suppliers of those power sources don't have to pay the full cost of the damage their pollution causes. A fair comparison should either include all subsidies, or none. Not just the subsidies we are used to.
- paulsutter 11y ago
  Energy storage also needs to be encouraged and developed to make solar successful. Like solar cells, the cost of storage will come down as a function of production volumes. Net pricing does just the opposite - it disincentivizes storage. Is that really the type of subsidy you'd support?
  - dpierce9 11y ago
    There are still plenty of incentives for grid storage that have nothing to do with residential rates (peak shaving with pumped storage, day/night price arbitrage). Surely not all incentives have to work for every valuable technology.
- jkyle 11y ago
  The problem isn't the subsidies. The problem occurs when the proportion of solar users increases such that the utility's margins become low enough to threaten the minimum budget required to maintain the infrastructure. If you want to subsidize solar users to bootstrap that market and as a general social good, that's fine. But you have to structure it such that the utility still recoups the cost of maintenance. If they're paying market instead of spot, the paid price is not taking into account the cost of transfer and storage to the utility.
  - mreiland 11y ago
    When we get to that point the answer is to let the local government take over maintence, much like roads. Subsidize it with a tax.
sliverstorm 11y ago
If you got the spot price, I wonder if that would encourage storage development independent of solar installations? In other words, installations whose sole function is energy arbitrage, charging storage banks when power is cheap and discharging when it's pricey.

gregwtmtno 11y ago

> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. I mean "should" depends on the goal of the pricing policy right? If the goal is a "fair comparison", perhaps the policy makers should include the cost of mitigating externalities in the price of carbon-producing electricity sources.

paulsutter 11y ago
We should absolutely put a price on carbon, yes. That would penalize carbon emissions. Net metering is no substitute for a price on carbon. For real green power, we need to storage to balance out solar generation. Net metering /prevents/ storage from being installed. EDIT: Never going to happen? Actually it's /already/ happened. Examples: - California already has a low carbon fuel standard[1] that regulates "well to wheel" carbon content of transportation fuels (some sources like tar sands have high carbon emissions in the production process[2]). This is a significant step towards a real carbon price and an opening to provide fuels generated through a green process. - California' Emission Performance Standard (EPS) no longer allows use of coal-generated electricity[3] which has caused a complete phaseout of coal plants in favor of natural gas (which has half the carbon intensity). Again, this is a restriction of the carbon-intensity of power generation which is also an effective step towards a carbon price. [1] http://www.wsj.com/articles/california-restores-rule-to-cut-carbon-in-fuel-by-10-1443219215 http://www.wsj.com/articles/california-restores-rule-to-cut-... [2] http://www.scientificamerican.com/article/tar-sands-and-keystone-xl-pipeline-impact-on-global-warming/ http://www.scientificamerican.com/article/tar-sands-and-keys... [3] http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf http://www.energy.ca.gov/renewables/tracking_progress/docume...
- melling 11y ago
  Ok, let pretend that's never going to happen because it's not going to happen. Where does solar win in the current political/economic environment and where is it close to winning? Making forward progress in the next decade is going to help more than wishing for a level playing field. Maybe we can push solar costs lower once the industry grows: http://cleantechnica.com/2015/08/13/us-solar-pv-cost-fell-50-5-years-government-report/ http://cleantechnica.com/2015/08/13/us-solar-pv-cost-fell-50...
  - TheIronYuppie 11y ago
    For what value of "never"? Carbon tax on the ballot in Washington this fall - http://yeson732.org/ http://yeson732.org/
    - melling 11y ago
      You got me there!! The state that gets 75% of its electricity from hydro leads the way! https://www.washingtonpost.com/graphics/national/power-plants/ https://www.washingtonpost.com/graphics/national/power-plant... As of today, there are still 50 states to go, plus the rest of the world. Better sell your beachfront property. Time"s up.
  - pilom 11y ago
    Residential installation in Denver CO at $2.16/W after federal incentive. Just about exactly grid pairity. Their $3.50/watt number is way high compared to the reality of today in the US.
- crdoconnor 11y ago
  >Net metering is no substitute for a price on carbon. It absolutely is since there is no price on carbon and no realistic prospect of one any time soon.
  - gburt 11y ago
    $30/ton CO2e in BC, in effect today: http://www.fin.gov.bc.ca/tbs/tp/climate/A6.htm http://www.fin.gov.bc.ca/tbs/tp/climate/A6.htm Of course, that's probably not enough. See Greg Mankiw's "invitation to the Pigou club" where he discusses the research on the "correct" value (estimated at between $80 and $300 per ton): http://scholar.harvard.edu/files/mankiw/files/smart_taxes.pdf http://scholar.harvard.edu/files/mankiw/files/smart_taxes.pd...

crdoconnor 11y ago

>the homeowner should get paid the spot price like every other generator, not full residential rates. Either the other generators should pay a significant carbon tax or the solar / wind producers should get a significant subsidy for polluting less.

tertius 11y ago
Just because your competition has an advantage doesn't mean that you can ignore costs. Even if you choose to ignore the costs, a subsidy is a direct monetary cost and not an advantage that you can just force to compete.
- crdoconnor 11y ago
  That argument doesn't make any sense. Whichever way you look at it there's no justification for giving the same tax treatment to both coal and solar. One imposes an enormous externality and the other doesn't. Whether it's a subsidy for one or a tax for the other is somewhat immaterial. The point is that they shouldn't be taxed the same. Currently coal and gas actually receive massive subsidies, too, while a 30% tariff is slapped on most solar panels imported from China which is even more perverse. We're literally subsidizing pollution because coal/gas are tight with out politicians, while cheaper, cleaner forms of electricity generation are rendered purposefully less competitive.
  - cmdrfred 11y ago
    > Whichever way you look at it there's no justification for giving the same tax treatment to both coal and solar. The same? Not even, fossil fuels get significant subsides on top of paying nothing for the emissions and that's just the tip of the iceberg. In June 2010, the U.S. Energy Information Administration (EIA) said $557 billion was spent to subsidize fossil fuels globally in 2008, compared to $43 billion in support of renewable energy.[1] [1]http://www.sourcewatch.org/index.php/Federal_coal_subsidies http://www.sourcewatch.org/index.php/Federal_coal_subsidies
    - 11y ago

upofadown 11y ago

> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. Sorta. Because solar is distributed the economics related to transmission are different. If your solar panel is mostly powering your neighbours air conditioner then you are reducing peak load on the transmission system which can be a very valuable thing. If your solar panel is powering someones air conditioner one state over then there is no benefit to the distributed generation. The catch is that the situation can change from hour to hour and day to day. The proper amount to pay the small distributed generators can be hard to determine.

paulsutter 11y ago
If you really want to balance out the grid to account for distribution and transmission costs, you still need storage, and net pricing disincentivizes storage. Spot prices are already location-dependent, and yes a real distributed smart grid would do this on a micro scale, and a correctly designed smart grid would incentivize local storage. Which is what I think you mean by "hard to determine".

phkahler 11y ago

>> If provided back to the grid, the homeowner should get paid the spot price like every other generator, not full residential rates. The home owner then buys a few kW of battery storage and saves the energy for their own use later. This has the same effect on them as net metering once they pay for the storage unit, but only up to the point that they produces exactly as much as they use.

encoderer 11y ago

Yes if you consider utilities as a business that sells power for more than it pays, net metering is a subsidy. But if you think a utility has a special responsibility to the public, and I for one do, it's hard to defend charging me more for a kW coming into my home one moment than I get for one going out the next.

toomuchtodo 11y ago
Utilities aren't comfortable with the fact that generators will go out of business, and only transmission will remain as a non-profit ISO-type entity (coordinating energy distribution and storage).

notatoad 11y ago

This comes up in every discussion about solar power, but it seems unfair to me. Yes, solar is subsidized by a whole bunch of factors. But so is coal and oil, because the suppliers of those power sources don't have to pay the full cost of the damage their pollution causes. A fair comparison should either include all subsidies, or none. Not just the subsidies we are used to.

paulsutter 11y ago
Energy storage also needs to be encouraged and developed to make solar successful. Like solar cells, the cost of storage will come down as a function of production volumes. Net pricing does just the opposite - it disincentivizes storage. Is that really the type of subsidy you'd support?
- dpierce9 11y ago
  There are still plenty of incentives for grid storage that have nothing to do with residential rates (peak shaving with pumped storage, day/night price arbitrage). Surely not all incentives have to work for every valuable technology.
jkyle 11y ago
The problem isn't the subsidies. The problem occurs when the proportion of solar users increases such that the utility's margins become low enough to threaten the minimum budget required to maintain the infrastructure. If you want to subsidize solar users to bootstrap that market and as a general social good, that's fine. But you have to structure it such that the utility still recoups the cost of maintenance. If they're paying market instead of spot, the paid price is not taking into account the cost of transfer and storage to the utility.
- mreiland 11y ago
  When we get to that point the answer is to let the local government take over maintence, much like roads. Subsidize it with a tax.

sliverstorm 11y ago

If you got the spot price, I wonder if that would encourage storage development independent of solar installations? In other words, installations whose sole function is energy arbitrage, charging storage banks when power is cheap and discharging when it's pricey.