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How should net metering affect your electric bill?

• dismalpedigree 5y ago
  Fine. I get the need for the need to cover my offload, downtime and night time when grid tied. What really grinds my gears is that many states REQUIRE you to be grid tied and pay those fees. I would like to go it on my own. Not a legal option.
• surfmike 5y ago
  “In practice, it’s often politically difficult to argue for overt subsidies, and we resort to workarounds like net metering.“ The reason we have so many hidden subsidies (also: tax credits) is precisely the sentence above. It’s the difference between policy and politics. Few policies are designed well because the main force driving their creation is political support (or the lack of it).
  • __s 5y ago
    "carbon tax" is trouble to enact because you can't expect to rally support for something with the word tax in its name Then people complain about where will that tax money go. It doesn't matter. The government could burn all the carbon tax money collected (& in fact, this would help against inflation). The purpose is to fix incentives, not find funding
    • throwaway894345 5y ago
      Not only is the "tax" word problematic, but if you call it "carbon pricing" that irks the people who are reflexively anti-market. And no matter what you call it, the sanctimonious environmentalists will fight it because it minimizes the need for heroic personal sacrifice with respect to preserving the environment (frankly, these personal sacrifices probably aren't significant in the first place--the bulk of pollution is industry and transport, especially that which we outsource to China, etc).
      • guelo 5y ago
        Environmentalists would absolutely not fight it. They've been begging for a carbon tax for 40 years.
        • throwaway894345 5y ago
          I was specifically referring to the subset of environmentalists who believe that salvation lies in converting everyone to veganism and cycling. But there are a lot of people who style themselves as environmentalists who oppose carbon taxes: * The "personal responsibility" environmentalists described above * The "anti-market" environmentalists who assume without evidence that markets necessarily make things worse * The Green New Deal environmentalists who largely want to use the threat of climate change as political cover for social spending ("climate justice"). The last bullet might be too broad--there might be some GND environmentalists who are sincere, but certainly the overwhelming majority of GND policy and rhetoric seem to be more concerned with social spending than decarbonizing the atmosphere. I think there's a lot of overlap between this group and the prior two groups as well.
      • triceratops 5y ago
        > the sanctimonious environmentalists will fight it because it minimizes the need for heroic personal sacrifice with respect to preserving the environment Any evidence for this? IMO "Sanctimonious environmentalists" only care that consumption reduces. Whether that's voluntary or due to being priced out by carbon taxes is irrelevant. If anything doing it voluntarily, before it was ever needed to make your household budget work, would make them feel even holier.
        • throwaway894345 5y ago
          It's pretty much a tautology--I'm defining "sanctimonious environmentalist" as one who makes showy personal sacrifices for esteem. If emissions decrease because manufacturing processes become more efficient, then their sacrifices were for naught and the lifestyle they've been pushing on others becomes irrelevant (or decreases in relevance).
    • guelo 5y ago
      Giving the carbon tax revenue back to people as cash payments could help politically.
      • dahfizz 5y ago
        Doesn't that ruin the incentive structure? Your cash payments are higher when carbon use is higher.
        • stormbrew 5y ago
          In this kind of scheme, you don't get what you paid back as cash, you get something more like a dividend of the revenues (possibly just as a non-refundable income tax rebate or something, or as a dividend check given to all adults, depending on the particulars of your region's tax aversions). So you're actually incentivized to consume less, because you get more out of it if your tax payments are less than your dividend. Obviously there might be some perverse incentives to like.. causing a global increase in emissions while keeping your own small somehow but those are probably hard to significantly profit from.
      • hardtke 5y ago
        Canada promised to do that and the proposal was still wildly unpopular and abandoned. If you've build your life around no carbon tax (e.g. you live far from work and need to drive) you will personally suffer from such a change and will vocally lobby against the change. We end up with things like the Yellow Vest movement in France or the political instability that happens when any government tries to reduce fuel subsidies. It seems that voters are more sensitive to the price of gas than any other issue and any political party that causes the price of gas to go up gets voted out of office. Paul Krugman wrote a post recently showing that US consumers' inflation expectation exactly tracks the price of gas. I've concluded that any consumer impacting carbon tax cannot work in a democratic system. We need subsidies (both explicit and hidden) to reduce our carbon emissions.
        • stormbrew 5y ago
          > Canada promised to do that and the proposal was still wildly unpopular and abandoned. <...> I've concluded that any consumer impacting carbon tax cannot work in a democratic system. We have a carbon tax in Canada and it's probably not going away any time soon (it is, in fact, scheduled to continue going up), so I'm not sure what you mean here. The provinces can do a rebate/dividend if they want and/or run their own system designed that way but I'm not sure if any have. I'm not sure if your first statement is just saying we abandoned a rebate, but your last statement implies you think any consumer carbon pricing is impossible regardless of that, while your example says otherwise.
  • hardolaf 5y ago
    The delivery fee being artificially low was a political decision to subsidize utility prices for the poor. Every single utility has step function of pricing for usage fees that works to capture the cost of providing the infrastructure. This is why net metering never made sense to utilities and why they were trying to reject it despite states and politicians seeking to force it on them. The utilities who did go all-in on net metering willingly did so at the generator rates which pissed off a ton of homeowners but that was actually a fair thing to do as that reflected the real price of the energy being provided.
    • lotsofpulp 5y ago
      This is why all subsidies should be in the form of cash. Give poor people cash rather than obfuscate prices, which then results in hampering of market mechanisms and results in inefficient allocation of resources.
      • lifeisstillgood 5y ago
        Aside from the obvious problem (which poor people) it is a very interesting idea to remove all subsidies (explicit and implicit). Terrifying but interesting
        • lotsofpulp 5y ago
          The obvious problem is solved by making it universal. You do not need to choose which poor people, just make it everyone, and then collect a marginal income tax. Although, I would prefer marginal sales taxes, but that seems technically impossible with current technology. The reason why it is not done is because it would lay bare all the inequities in the system, as well as require higher taxes due to not being able to hide the inequities in various forms of price discrimination/segmentation. Keeping prices obfuscated means costs can be distributed across the population in an unfair manner / benefits reaped in an unfair manner, as well as ability to punt costs into the future.
          • lifeisstillgood 5y ago
• bmmayer1 5y ago
  Good piece...putting on my econ hat here, it would definitely be more accurate to say that prices are signals that reflect the all-in cost of moving products and their dependencies through a supply chain and to the consumer. These signals can be disrupted by many factors, including competition or lack thereof, regulation or tax policy, etc, that often can make things inefficient. But in the examples the author uses, it's not that the price is divorced from cost, it's that the price of video tapes reflects the all-in cost of production, distribution, as well as the cost of fighting piracy. High medical prices reflect the incentives and constraints of the system that has been built around the service. High drug prices reflect the cost of R&D, not the cost of pouring cheap compounds into a plastic mold. Which is not to say that prices are not truthful per se -- just that pricing signals can be easily disrupted by factors not normally in the consumer's direct field of vision, and can be exploited by "loopholes" (which are just another way to send a signal back to the firm that the price is incorrect).
  • deleted 5y ago
    [deleted]
  • skybrian 5y ago
    From an information theory standpoint, prices are a very simple summarization of overall costs that throws a lot of information away. This is useful to do because supply chains are complicated and understanding them would impose a burden on consumers. But it also means we remain ignorant of how goods and services get to us and what the system constraints are. Also they aren't just about cost, but also about expected demand, and competition to capture that demand. This makes the information about costs a muddy approximation at best.
    • 1123581321 5y ago
      Product and service information is transmitted along with price, and insufficient information drives demand for methods to price more granularity without increasing transaction costs. Or to decrease transaction costs to allow research into purchases more difficult to understand.
• harterrt 5y ago
  OP hints at this - but the problem seems to be net metering lumps capacity payments in with the cost of power. Some markets run a separate capacity market that rewards power generators explicitly for their capacity - independently of whether they actually generate any electricity. (California's market (CAISO) doesn't do this) A long time ago I was involved in setting capacity market prices if y'all have follow up questions.
  • giantg2 5y ago
    My utility charges separate amounts for generation and for distribution. In theory (I don't have solar), the electricity generated by the rooftop panels should be compensated at the generation rate. The the utility would then charge the consuming customer the distribution rate.
  • jdofaz 5y ago
    Speaking of CAISO they have a cool website with electric prices for much of the western US http://www.caiso.com/TodaysOutlook/Pages/prices.aspx http://www.caiso.com/TodaysOutlook/Pages/prices.aspx
  • aidenn0 5y ago
    SCE and PG&E both separate out delivery vs. generation costs, and net metering only compensates you for the generation costs, but (per other comments I see here) the delivery costs are laughably low.
• vehemenz 5y ago
  If some states weren't captured by utility monopolies, then solar users would be legally allowed to disconnect from the power grid, potentially solving the first issue. It's amazing to me that this is illegal anywhere.
  • woodruffw 5y ago
    As far as I can tell, only Florida makes it actually illegal to disconnect from the power grid[1]. It seems to be legal in every other state, subject to doing paperwork. [1]: https://off-grid-home.com/is-it-legal-to-disconnect-your-home-from-the-electricity-grid/ https://off-grid-home.com/is-it-legal-to-disconnect-your-hom...
    • bick_nyers 5y ago
      What if I just didn't pay my bill and the utility company disconnected me from the power grid? Would I be subject to fines and jail time? Absurd, but hey, that sure sounds like Florida. Edit: If you follow the link in the article, it sounds like this was all because of disconnecting the water hookup and has nothing to do with solar power?
      • woodruffw 5y ago
        Purely speculation on my part, but I think the power company disconnecting you for nonpayment probably wouldn't count: they don't physically take the line down, which is the condition that Florida seems to be concerned about.
  • SubiculumCode 5y ago
    Off-grid electricity used to be illegal in California under Title 24. The law required residential homes to have an “interconnection pathway.” However, the law has recently been updated and now specifically allows off-grid electricity.
  • onlyrealcuzzo 5y ago
    I mean - if you aren't using any power - the base charge is usually less than $10/m. This doesn't seem like an absurd amount of money to have power when your system inevitably goes down for a time. Additionally - if you want to sell your house - you're going to lose a fortune taking it off the grid. It wouldn't qualify for most financing. It's not worth saving $10/m for almost any rational/economic person.
• sandworm101 5y ago
  >> For instance, pricey CDs prevented lots of people from listening to music. Nope. Nobody I knew in the 90s had this issue. In fact, higher prices caused more people to listen to more music. Unable to afford CDs, the kids turned to Napster. After that they had access to more music than any generation in history. This in turn forced the music industry to change, to create online delivery platforms. Napster might be gone, but those 90s CD prices are why we have streaming services today.
  • burkaman 5y ago
    There must have been a lot of people that had access to record stores but not to the internet, and not enough money for lots of CDs. And Napster launched in 1999.
    • sandworm101 5y ago
      Napster was the first big name, but there were other schemes for downloading music earlier. Mp3s had been around since the early nineties. Even without downloading, high CD prices saw kids copying and burning CDs for each other as soon as burners were available. So long as you had some social connections you knew someone with access to free music.
    • jdofaz 5y ago
      As a 90s kid with no money, the solution was to wait for the song to play on the radio and record it to a cassette tape.
      • EricE 5y ago
        Thank you. And it was rather commonplace. The idea that music wasn't accessible is crazy.
  • kbos87 5y ago
    There was a long period of purchasing music from stores before Napster was even an option. Having to spend $12-$16 on a CD you intended to listen to one, maybe two songs on absolutely stunted the amount of music people listened to for a very long time.
• giantg2 5y ago
  I only want solar/wind/etc if I can be off grid.
  • kspacewalk2 5y ago
    I can understand why it can be necessary, but why is being off-grid desirable? Having solar/wind/etc is great, but a grid connection gives you a bail-out in case things go south, e.g. an outrageously hot and windless summer night might create a demand that cannot be handled by your battery (if any).
    • StillBored 5y ago
      But your price in that case should be really outrageous because your just externalizing the cost of the utility having to build a peaker plant somewhere and run it on a couple peak days a year (and maintain the infra). That cost should be averaged over the year for someone who uses 100% grid electricity, but for someone who only uses it when the production is the most expensive then they are freeloading on everyone else. That is sorta the point of the whole article. It is also fundamentally the problem with wind and PV even at grid scale. Its true costs are buried behind the (generally) natural gas turbines being built to back it up because the grid can't just say "sorry no power right now, you get to freeze" like happened in TX last year. So, one has to take the max power usage, and assure there is capacity even if it happens to be dark/cold and without wind. Usually there is a fair bit of excess capacity in place to deal with plants have to shutdown for maint/etc so it just becomes a question of assuring that all the plants don't do maintenance at the same time (enron/CA anyone?), and they aren't going to be doing maintenance during the parts of the year when peak power draw happens (generally the dead of winter, and summer).
    • giantg2 5y ago
      Well, if grid connected, then it wouldn't make sense to have a battery that is basically never used. Plus, you pay a fee just to be connected. If building a new house, I would rather save on the expensive hook-up cost. In the event of installing a system, I would want it to be sized appropriately and have proper design of the rest of the system. Better insulation, passive heating and cooling strategies, as well as a geothermal heat pump would all be good improvements. Arguably, those would the best to focus on before implementing solar due to the increased efficiency, reducing the necessary battery size, etc. Some of these my not be easy or practical with existing houses, but many are. Ideally I would like a solar/hydro setup, but that would require a property with a water source.
• user_named 5y ago
• maerF0x0 5y ago
  It seems to me if it's true that the cost of distribution is something like 77%, then it really argues in favor of more houses being off grid -- For the cost it may have been better to build self sufficiency, and/or micro community grids rather than a giant regional one. The economy of scale in generation is lost in the costs of distribution.
  • 7952 5y ago
    In practice local generation and storage has fewer possible customers. The grid has limits on how much can be exported from a residential substation. A generator connected to a big substation can send electricity to millions of potential customers. And a battery can receive energy from all over the grid. The local intermittency is easier to iron out when you can benefit from geographical separation, different modes of generation and different weather conditions.
  • ed25519FUUU 5y ago
    That distribution cost is not at all related to solar. With rooftop solar your power travels across the powerline maybe 1 city block to your neighbor. It's not traveling thousands and thousands of miles.
• cletus 5y ago
  The author here would do well to and understand and use terms like "fixed costs" and "variable costs". There are large fixed costs in the power grid and the author is complaining that the retail price of electricity doesn't reflect the variable costs, leading to distortions and perverse incentives. But this doesn't make prices "lies". > The current net metering system in California is pretty favorable to customers with rooftop solar; in effect, it’s a subsidy. It's quite an overt and deliberate subsidy to foster solar power technology (which has been wildly successful), reduce demand on the grid and to shift the pattern of power usage. Electricity use spikes during daylight hours [1]. This happens to be when the Sun is shining and solar power works. Peak demand is really the only thing that matters in powering a grid. Solar is highly effective at reducing peak usage. I honestly don't know why the author feels like any of this isn't "upfront". [1]: https://www.eia.gov/todayinenergy/detail.php?id=42915 https://www.eia.gov/todayinenergy/detail.php?id=42915
  • SamBam 5y ago
    > It's quite an overt and deliberate subsidy to foster solar power technology I'd say that the issue the author is addressing is that it is not so overt. Sure, if you meditate on it it becomes clear it's a subsidy, but I think the vast majority of the people who take advantage of it simply think "I produce as much as a use, so of course my bill should be zero."
    • dboreham 5y ago
      Can confirm, having talked to family members with recent solar installations.
      • stevemadere 5y ago
        The vast majority of people are unwilling/unable to think deeply enough about the system to understand it. Thus, the simplified rule of thumb that generating electricity reduces your power bill is needed for them to even understand the general direction of what needs to be done. Perhaps the power utility could include an explainer page at the back of the monthly statement for those with the interest and capacity to understand it. Maybe 2% of people will read and understand it. The other 98% can just be smug about their lowered power bill and blissfully unaware of their part in accelerating the market shift to solar.
• api 5y ago
  This is why your bill should separate your grid fee from your generation fee. Net metering could apply to the generation fee but not the grid fee, and your generation cost should be determined by the time you are using power (due to peaking) not just the amount. Want to escape the grid fee? Then you have to actually disconnect with full battery backup. That would promote independence and community microgrids, which would be a good thing for robustness and overall system efficiency. Someday I can easily imagine suburban and rural areas with no "big" grid connection and the grid becoming primarily a thing for industrial and high density areas.
• ridaj 5y ago
  Wait until this person realizes that money is a lie anyway, too!
• ed25519FUUU 5y ago
  This article carries way too much water for PG&E. Sad, but I guess since we're gearing up for a net-metering 3.0[1] fight we'll see more and more articles like this one. Here's the places where I think it misses the mark: * The energy generation costs listed by the author actually includes rooftop solar. PG&E paid exactly $0 for you to spend $30k installing the panels, so that number is low for PG&E for a reason. * PG&E turns around and sells your solar power to people enrolled in "Solar Choice" plans who will pay 50% more for electricity than what PG&E net metered you. * California has a green energy mandate and rooftop solar is one of the ways PG&E can meet the mandate while offloading the entire cost of the system onto the homeowners. * Net metering last for 1 year and after that PG&E "credits" you the wholesale value of your excess electricity, which they value at approximately 1c/kWh even though they charged other people $0.40/kWh during peak time for that power you exported. * The CA legislator mandated all new homes are installed with solar panels. Kind of makes sense why PG&E was favorable of this bill. PG&E again has offloaded the cost of installing green energy generation on someone else. * The monthly non-bypassable fee that the author describes as "pretty low" is actually closer to $10/month and expected to rise with NEM 3.0 to $50 a month or more. Keep in mind that PG&E has 5.5 million customers, so this number is significant. * Grid defection is illegal in most municipalities so even if someone wanted to install a battery and go off-grid they still have to pay the $10 a month non-bypassable PG&E fees. Net Metering 3.0[1] "fixes" the problem the author attempts to describe, but really it's a rug-pull on everyone in CA who spent tens of thousands of dollars to install rooftop solar. Customers installing solar panels at their expense is a subsidy FOR PG&E, not the other way around despite what this spin attempts to portray. 1. https://www.solarreviews.com/blog/california-net-metering-changes https://www.solarreviews.com/blog/california-net-metering-ch...
  • yuliyp 5y ago
    Where is this mythical $0.40/kWh price for electricity (not transmission) actually occurring? Net metering does not expire after a year. You can continue to get any power you need matching the power you had put in on a 1:1 basis. The 1c/kWh is for the excess. Most of PG&E's infrastructure is transmission infrastructure, not generation. They wouldn't be building power plants themselves, anyway. Net metering allows rooftop solar to effectively get paid for electricity at a much higher rate than PG&E or local electricity cooperatives than would be paying on the open market. It is designed as a subsidy to motivate people to install solar. Pretending that it's a subsidy for PG&E is missing the mark.
• lkrubner 5y ago
  About this part: "Maybe Some Lies Are Necessary?" In his book "10% Less Democracy" the economist Garret Jones pointed out that politicians make terrible decisions during election years, therefore, if we had longer terms in office, and therefore fewer elections, we'd have better government. https://www.amazon.com/10-Less-Democracy-Should-Elites/dp/1503628973/ https://www.amazon.com/10-Less-Democracy-Should-Elites/dp/15... Likewise, in 1787, Alexander Hamilton insisted that the USA President should be elected "for life, on good behavior." He imagined that having a leader commit to a country for life should lead to good governance, so long as the person could be easily removed if they behaved badly. "Democracy For Realists" rounds up some of this thinking. While Achen and Bartels don't explicitly endorse longer terms in office, they do quote a lot of people who feel longer terms in office would lead to better government, and also more honest government. I've been studying this issue and using a Substack as the dumping ground for my research notes. If you're interested, here is an excerpt where they talk about the struggle to add fluoride to municipal water, and the pushback the political leaders got: https://demodexio.substack.com/p/democracy-for-realists-part-8-of https://demodexio.substack.com/p/democracy-for-realists-part... Here is an excerpt about the damage done by referendums, of the type that dominate in California: https://demodexio.substack.com/p/democracy-for-realists-part-10-of https://demodexio.substack.com/p/democracy-for-realists-part... "La Follette was eventually the 1924 Progressive candidate for president, but the anti-party spirit of that movement is already apparent in these remarks two dozen years earlier. As Key (1942, 373-374) put is, “The advocates of the direct primary had a simple faith in democracy; they thought that if the people, the rank and file of the party membership, only were given an opportunity to express their will through some such mechanism as the direct primary, candidates would be selected who would be devoted to the interests of the people as a whole.” Some canny political scientists were immediately skeptical. For example, Henry Jones Ford (1909, 2) noted that “One continually hears the declaration that the direct primary will take power from the politicians and give it to the people. This is pure nonsense. Politics has been, is, and always will be carried on by politicians, just as art is carried on by artists, engineering by engineers, business by businessmen. All that the direct primary, or any other political reform, can do is to affect the character of the politicians by altering the conditions that govern political activity, thus determining its extent and quality. The direct primary may take advantage and opportunity from one set of politicians and confer them upon another set, but politicians there will always be so long as there is politics.” I include my own opinion in the Substack, which is that longer terms would help make for most honest government. Achen and Bartels also offer a detailed look at a region of Illinois in which the public was invited to vote on the budget for the fire department. The public voted for the cheapest, least expensive budget they were offered. The public saved themselves a total of just $0.43 cents per family a year, while having to suffer from very slow response times from the fire department. This seems to be a clear example of the public sabotaging its own interests, when invited to vote on issues directly: https://demodexio.substack.com/p/democracy-for-realists-part-12-of https://demodexio.substack.com/p/democracy-for-realists-part... Finally, here is the part where Achen and Bartels come close to suggesting that longer terms would allow politicians to be a bit more honest. They make the point that it was the politicians close to an election who were most likely to pander: https://demodexio.substack.com/p/democracy-for-realists-part-13-of https://demodexio.substack.com/p/democracy-for-realists-part... "For lower-level offices, however, a good deal of variation in term lengths remains, and it seems to have just the sort of consequences suggested by Hamilton and by Canes-Wrone, Herron, and Shotts’s analysis. For example, elected officials facing the issue of fluoridating drinking water in the 1950s and 1960s were significantly less likely to pander to their constituents’ ungrounded fears when longer terms gave them some protection from the “sudden breezes of passion” that Hamilton associated with public opinion. Figure 4.3 shows the dramatic difference that longer terms made to mayoral support for fluoridation. Many political leaders, not caring deeply about the topic, ducked; but those with longer terms had more political leeway to do what was right, and a significant fraction of them used it." It seems likely we could get a more honest kind of government if politicians were elected for a single very long term, of perhaps 15 or 20 years. The top judges in Britain are appointed for 18 years, so perhaps that is the ideal number when you want to ensure someone's independence, while still allowing the regular churn of generational change.
• _ea1k 5y ago
  Honestly, this feels like a bit of a red herring. The net metering issue is getting more airtime lately, but it isn't nearly as big of an issue as the proposed connectivity fee that is only targeted at solar customers and based on the nameplate capacity of solar. That fee is directly designed to capture the benefits of solar for the utility and has little to do with real costs to the grid.
  • ed25519FUUU 5y ago
    This is exactly right. Now that PG&E has built a sizable solar installation base, the NEM3.0 move is to make sure they can capture more profit. Their plan for passing NEM3.0 seems to be to cry and moan about how they're being taken advantage of by individuals who paid $30k to install solar panels on their homes.
    • toomuchtodo 5y ago
      When your business model is getting a guaranteed ~10% return on equity, you’re going to fight hard to not give up your cash cow. https://dms.psc.sc.gov/Attachments/Matter/5f64b1b3-d2bc-4b20-abb7-6e36ed1a220f https://dms.psc.sc.gov/Attachments/Matter/5f64b1b3-d2bc-4b20...
      • skybrian 5y ago
        Not really guaranteed if you consider the risk of bankruptcy due to wildfires.
    • 14 5y ago
      People need to be off the grid completely and when that happens what will these power companies do? If we ever get the affordable battery system that are always just around the corner that will allow this to happen. I look forward to the day. Our electric company has been raising rates and the system is not fair. It is tiered so the more you use the more you pay in hopes to reduce usage. Fair enough. But in my house we have 5 adults and 4 children. We have the same tier as someone with 1 adult and no children. So even though we are more environmentally friendly and our heat heats 9 people, our lights provide light for 9 people, because we use more electricity in other areas like showers we always end up at the higher tier paying a lot for electric even though on a per individual basis we use less electricity. I unfortunately am in Canada and the solar power just isn’t efficient enough here to make it worth while.
• phkahler 5y ago
  >> Greenhouse gas emissions are a classic instance: polluters don’t pay for the carbon they emit. This is the ultimate distorted price: emissions have a high cost, but the price we charge polluters is $0. That price is a colossal lie. I always say if you want to make someone pay for carbon emissions, the easiest way is to tax its extraction from the ground. Tax coal, oil, and gas extraction (or import) and call it a day. No sense creating artificial markets for carbon credits or other such nonsense that just encourages gaming a system and feeding middlemen. The author IMHO totally blew it by digressing from the net-metering thing. Its a really good example of how pricing doesn't match costs, but he offers absolutely nothing as a fix for that situation. Charging people a base rate for the infrastructure plus usage sounds nice, but that causes problems for poor people and kind of subsidizes large users. The current pricing scheme which increases costs with usage (progressive pricing?) seems more fair. Or what about splitting the bill into infra and usage portions, then solar installations would pay infra for power flowing in either direction. I'm sure there are plenty more ideas out there, but the author offers none.
  • LadyCailin 5y ago
    That split bill thing is how it works here in Norway. The nettleie (infra part) is regulated like a utility, because it’s a monopoly in the area serviced, but the actual electricity is fully free market, because you can choose whoever you like to actually provide the electricity. Actually though, now that I’ve typed this out, the nettleie is charged per kWh drawn (as well as peak demand), and I’m not sure how that changes if you have solar panels. Maybe another Norwegian can comment. In any case, splitting the infra and production makes sense to me, and definitely can be done.
• jmacd 5y ago
  The (privatized) power utility in Nova Scotia, Canada just this week proposed a fee of $8/kWh for solar power entering the grid. It was met with a pretty ferocious response to the point the government started re-writing the legislation that governs utility regulation. https://www.cbc.ca/news/canada/nova-scotia/premier-vows-to-protect-n-s-solar-industry-by-blocking-new-net-metering-charge-1.6336302 https://www.cbc.ca/news/canada/nova-scotia/premier-vows-to-p... A very large solar industry has been established around these pricing discrepancies. Not easy to undo (and I guess not obvious if it should be undone).
  • bonzini 5y ago
    Note that it's $8/kW/month (presumably based on peak kW production); not $8/kWh.
    • jmacd 5y ago
      shoot, you are right!
      • bonzini 5y ago
        I checked because it seemed a bit expensive. :)
• epistasis 5y ago
  One thing that's missing from this is that with current California net metering, for new solar customers, you can't dump a kWh on the grid at noon and then swap it for one at 7pm at the top of the duck curve. New plans are all time-of-use rated, meaning that you can only swap kWh within the same time of use band. At least, that's how it's been explained to me, I have not yet been able to find any explicit rules on PG&E's site explaining how time of use and net metering interact. (And for that matter, PG&E goes to nearly excessive length to avoid describing how anything works, what the actual rates and charges are, or generally putting the most useless pablum on their website.) I think that all of these market designs and pricing schemes need to be made with an eye on getting to the lowest cost zero-carbon grid. Current best models are coming from Christopher Clack at Vibrant Clean Energy, and all his modeling shows that if we deploy lots of distributed solar and storage at meters, and upgrade distribution, we end up saving massive amounts of money over the decades. The reason is that by having distributed solar and storage, you can massively reduce other fixed cost parts of the grid as they age out. So really we need net metering policy that encourages that sort of capital investments today, and not just in the wealthiest neighborhoods that have good credit scores or $20k to spend on home improvement on homes occupied by owners, but all over the grid, including rentals. That's going to take not only good net metering policy, but also new innovation in financing and entrepreneurship. Figuring out how to convince landlords to let you install solar and storage all over, and integrating that into a virtual power plant is a nut that somebody needs to crack. Maybe it won't be entrepreneurs, maybe it will be cities making municipal Virtual Power Plants to meet their own ambitious climate goals. But there are a few key pieces missing from the best possible, most economical efficient, energy transition. And if we just let the utilities dictate policy, we will not be getting anything like the most economically efficient grid, we will get grids where they can make maximum profit.
  • conk 5y ago
    For each kwh you feed to the grid you get a credit for the value of that kWh during that time. Say off-peak is $.20 and peak is $.40 (this is an exaggeration but makes the math easy). You would need to feed 2 kWh to the grid during off peak to cover 1 kWh drawn from the grid during peak usage. On top of this there are non-by passable charges for every kWh drawn from the grid regardless of any credits on your account.
• kevindong 5y ago
  In NYC at least, electric supply charges are distinct line items from electric delivery charges. Consumers do have the option of choosing who supplies their electricity (e.g. namely if you want to buy your electricity from a green source). But the local monopoly is always entitled to charge you for the service of actually delivering said electricity to you. Both charges fluctuate from month to month. When I still lived in Indiana, the local monopoly lumped together supply and delivery charges into a single line item which, interestingly enough, was significantly lower than what I pay for just delivery now. The following prices are for roughly April. NYC (ConEd) delivery charge is ~$18/month + ~$0.123/kWh. Supply is usually something like ~$0.115/kWh. Indiana (Duke Energy) total cost (including both supply and delivery) was ~$9/month + ~$0.115/kWh.
  • paxys 5y ago
    It's the same in California. The problem is that the delivery charges are also calculated per kWh (so, the cost of delivering a single unit of electricity to your house). But what happens when the net electricity delivered is zero? You could argue that customers should be charged for both the electricity delivered to their house and the electricity taken away from their house, since they are using the grid and other expensive infrastructure for both. However you are now disincentivising people from installing solar and giving back their excess power.
    • kube-system 5y ago
      Thanks, this is the detail I was missing. Net billing for delivery makes zero sense. I think the reasonable solution is to bill the consumption direction only.
• jplr8922 5y ago
  As an ex-power trader active in the californian market, his analysis is incomplete. The pricing of wholesale market depends on many factors, including 1) the amount of electricity consumed at time T (quantity) 2) the variation on that amount at time T (delta of your quantity) 3) the location (delivery fee for your quantity) The problem with solar in californa is that electricity is produced when the market does not need it, and that it stops production when the demand increases. The current reality is that 'green' power generation increases the dependance on 'brown' power source for reliability reasons. Your can read more about this here : https://en.wikipedia.org/wiki/Duck_curve https://en.wikipedia.org/wiki/Duck_curve That ''net metering'' thing is to electricity prices what Santa Claus is to christmas presents.
• samatman 5y ago
  I'm not sure where to start with this article. Ok, how about here: there is no necessary connection between costs and prices, at all, and this is why some businesses go broke and others are worth a trillion dollars. Starting completely over with the basic microeconomics correct, there's surely an interesting question about public utilities which are paying prices for electricity which no longer line up with amortization and other costs of provision to be answered. Everything said about clubs was not-even-wrong, though.
  • bo1024 5y ago
    Possibly right but in an ideal world for maximum welfare, prices should signal costs or externalities.
    • zopa 5y ago
      That's a nice emergent feature that happens when you have plenty of competition, low transaction costs, perfect information and so on. Sometimes the real world is close enough to that one that you can pretend prices and costs are the same (although even then, just marginal costs, which doesn't include infrastructure that's already built). But it shouldn't be even mildly surprising when they diverge; it's certainly not a lie.
  • ballenf 5y ago
    But isn't the idea of a "utility" that it operates as a unique type of company that prices its services in sync with costs? In fact many utilities are explicitly cooperatives. To me, "privatized utility" is an oxymoron and that point is just a company with a mandated or de facto monopoly.
• kube-system 5y ago
  Many energy deregulated states charge supply, transmission, and distribution as separate line items. Is this not the case in CA? Seem strange that it wouldn't be, how else would you handle billing when someone chooses a different supplier?
• lillecarl 5y ago
  In Sweden there are 2 separate charges, one for infrastructure and one for consumption. The infrastructure bill scales with how big your breakers/fuses (English) are while consumption scales with how many KWh you've used. You often have a different infra provider and power provider. For someone living in a condo/apt the infra cost is usually higher than consumption while in houses where heating often is powered by some heat-pump system(drill, air, ground) consumption is higher. Houses with district heating can scale down their capacity to lower the infra price.
  • secabeen 5y ago
    Yes, this model is common in other utilities in the US (both by water and gas bills are structured this way), with a large meter fee and a consumption charge in line with the resource cost. Electricity could certainly be charged this way (and should), but it would be a huge change in how electricity is billed here, and the PUC would rather just make changes to just the net-metering system rather than open the can of worms of a full rate re-write.
    • Bilal_io 5y ago
      That's how it is for electricity in Texas. You pay a delivery charge, and then usage charge, both based on kw/h.
      • junon 5y ago
        You also pay for power you don't even use, from other power providers, in the case of extreme crisis, it seems. I've never lived there but from the outside Texas's power situation seems broken at best.
        • Bilal_io 5y ago
          That's accurate. We're in constant fear of losing power whenever there is a freeze warning (we're on that today and tomorrow at least), rain or heat. That's all thanks to the greedy for-profit system enabled by "conservative" politicians.
• StillBored 5y ago
  Really, in deregulated markets, a similar concept should apply to wind/solar generators. They should be forced to guarantee 100% reliable production, which means that they are responsible for the batteries or gas plants as well. Then they won't get to financially destabilize the reliable power producers by shifting the costs of having a plant sitting around idle for most of the year to some other org that has to balance the books.
  • krapp 5y ago
    In a deregulated market, no one forces anyone to guarantee anything.
    • StillBored 5y ago
      Well power deregulation has a lot of meanings, here in TX, in which is considered a "deregulated" market (because the producers, transmission and retails are different orgs, and there is an energy market) normal generators have to file servicing/downtime requests, which can be rejected, when they won't be able to deliver their nameplate capacity. That is to assure there is sufficient grid/transmission capacity, they won't be offline during peak demand season, etc. So, power deregulation doesn't mean "free for all", because then they would just play games of assuring under supply and drive the price up, and the grid stability down. In the US it just generally means that there aren't integrated municipal power companies (which can sometimes still exist in deregulated environments). In TX case, the deregulated market has a market regulator called ERCOT. (edit: to expound on this more) An integrated power company generally is responsible for assuring it can meet the peak demands of its customers. Which means it builds the power plants, transmission lines, and gets paid directly by the consumers. This was much of the US a few decades back where individual co/orgs were responsible for their service areas. The grid is more a bunch of regional grids all synced, so while a certain amount of power could be drawn from one region to another it wasn't the normal mode of operation. Anyway, the point being that should such an org build wind/pv they would also be responsible for building/maintaining the backup generation. So the books balanced in the end, that isn't true when any rando can attach an intermittent source to the grid, and reap the benefits when it suits them.
• microfen 5y ago
  People have seen this net metering problem coming from far off. I wrote a very unpolished undergrad thesis on this a while ago. Some standout articles from back then showed how net metering leads to a positive feedback of solar adoption [1] because of how rates are structured throughout this country (and the world for that matter), and it was time to consider modifying the rate setting process [2]. My conclusion was that net metering ends up being a regressive tax on those who can't afford the upfront capital to install solar themselves. It's been a while since I looked at residential solar tariffs, but there were a lot of ingenious solutions being proposed to deal with the downsides of net metering and poorly set feed-in tariff rates. Minnesota's Value of Solar tariff [3] is the one that comes to mind as being pretty clever. [1]: https://www.sciencedirect.com/science/article/abs/pii/S0301421513006526?via%3Dihub https://www.sciencedirect.com/science/article/abs/pii/S03014... [2]: https://www.sciencedirect.com/science/article/abs/pii/S104061901400150X?via%3Dihub https://www.sciencedirect.com/science/article/abs/pii/S10406... [3]: https://www.mnseia.org/value-solar https://www.mnseia.org/value-solar
  • FabHK 5y ago
    Very interesting, and surprising conclusion. I hadn't seen this problem before. (Though, note regarding "coming from far off" - the articles you cite are from 2013, 2014.)
  • cool_dude85 5y ago
    >My conclusion was that net metering ends up being a regressive tax on those who can't afford the upfront capital to install solar themselves. This is the traditional conclusion in the utility business, but I'd say it's also almost meaningless. By the exact same arguments, any kind of conservation winds up being a "regressive tax on those who can't afford the upfront capital", e.g. insulation, fancy windows, high efficiency HVAC. If I can afford a $2400 upfront cost to go above code on my HVAC unit, but it saves 100 a month, that savings is being subsidized by the people who can't afford it. The utility loses 100 a month in revenue but much less than that in costs, and the difference is picked up by the broader customer base. Hell, turning your thermostat settings up in the summer is a "regressive tax on those who can't handle the less comfortable temperature" by exactly the same argument.
• paxys 5y ago
  Cool article, but this is literally the first chapter of any Econ 101 textbook. Nothing new or groundbreaking is happening in California.
• TameAntelope 5y ago
  Shouldn't the people who use the resource more pay more for its maintenance and upkeep? Seems silly to force everyone to equally maintain a resource that not everyone equally utilizes.
• jonahbenton 5y ago
  This piece doesn't go nearly far enough. Blue pill: prices are economic signals reflecting supply and demand and play five distinct roles in capitalist economies... Red pill: prices are a statement of relative power between and among interacting entities that occasionally take economic factors into consideration, but only occasionally. Subsidy irrationality and many other artifacts mentioned in this piece that are difficult to reconcile in a blue pill world make complete sense in a red pill world.
• boringg 5y ago
  I'm not sure I even understand what the point of this substack article is and it is oversimplified. Is it him just examining what net-metering is then realizing that the utility provides more value than just electricity generation and that is eye opening to him? There's no conclusion and no cohesive argument just that the world is full of pricing distortions or that what you pay in prices isn't always exactly what you get (subsidizing some other development). Is it a take that NEM is flawed? Is it him moralizing that the climate tech industry is taking advantage of subsidies? "Don't cling to a subsidy longer and harder than necessary" --> Please look at the on-going subsidies to Oil & Gas - its absurd. If you really want to understand electricity generation pricing you should start looking at all the pricing nodes in real time and bring in energy storage, capacity payments, spinning reserves, non-spinning reserves, day ahead market, 5 minute market etc. On top of that you should start layering in how the federal government subsidizes different energy industries and add that layer on top of it. It's incredibly complex and certainly not clear what you are paying for. The top layer of how retail get's comped for the generation (in California) is interesting and a long-term risk for the utility (if enough people/companies put solar on roof and use NEM) if solar generation truly takes off. Long way to go as someone who works in the industry.
  • FabHK 5y ago
    I agree that the article is maybe not very clear in its conclusion. But one valuable thing I took from it is this pernicious tension I hadn't been aware of before between pricing electricity in accordance - to actual production costs: large fixed "standing charge" (per unit of time), small consumption charge (per unit of energy) - with environmental goals: small fixed standing charge, large consumption charge. You could argue that you should just (that word is doing a lot of work here) internalise the external costs, and then price it as "undistorted" as possible. Does that lead to the right answer here?
    • boringg 5y ago
      You end up with a bunch of other challenges. The infrastructure costs of the grid are quite high to build and operationally expensive. That cost needs to be defrayed somehow. The Time of Use (consumption charges) that aren't explained that well and differ quite significantly depending on the tariff structure you apply to. Consumption for commercial use is charged in two ways kwh that you require but also the peak kW that you need per month. This is in order to recoup the marginal cost of electricity produced at the "peak" of the month. I'm not trying to just muddy up the waters but I think the underlying analysis is overly simplistic and inaccurate. I would hate for people to think that this substack article is an accurate portrayal of the complexities of the energy system and the pricing structures. Residential rates are only portion of the grid.
• gwbas1c 5y ago
  The problem with Net Metering is that some politicians don't understand how electricity (and energy) works, but feel like they need to "do something" in order to tackle climate change. Net Metering was a great way to subsidize solar when it was a niche market. Now it's not. IMO, we should stop subsidizing solar and start subsidizing home batteries. IE, only allow "Net Metering" if there is a battery, sized to match the panels, that the power company can control. This way, we can make the system "win-win." The consumer benefits from cheaper electricity, and the power company benefits because they can tap the generated electricity when it's needed most.
• PaulHoule 5y ago
  Right, the claim that renewables are cheaper than nuclear and other alternatives are a half-truth. It's true that renewables can be highly affordable when the sun is shining but when the wind is blowing but the reason why they work with the current grid is that natural gas is highly available and cheap and the capital cost of gas turbine generators (very similar to jet aircraft engines) is very low. Hydroelectric can fill some of the gap but at an environmental expense: if you want to support a healthy ecosystem you need a relatively continuous flow in rivers. If it is starting and stopping a lot you are depriving the ecosystem of a valuable service. The idea that consumers can match demand and supply is also limited in applicability. If you turn off power to an industrial facility like a microchip factory you can destroy days if not months worth of production. Wholesale electricity prices can range from negative to astronomical and it is outright cruel and unrealistic to expect ordinary consumers to be exposed to that. Options for power storage have improved dramatically in the last decade thanks to the development of electric car batteries but they are still orders of magnitude too expensive. If they follow the same curve solar has they could come within reach but with any setbacks they could remain science fiction.
  • epistasis 5y ago
    > they are still orders of magnitude too expensive This isn't right as of today, stored energy charged by solar is about $0.20/kWh ($200/MWh) which is within spitting distance of the cost of new nuclear. And when you average this cost with the cost of solar/wind delivered directly, it's a huge cost winner. https://www.lazard.com/media/451566/lazards-levelized-cost-of-storage-version-60-vf2.pdf https://www.lazard.com/media/451566/lazards-levelized-cost-o... This is just the cost today, batteries are dropping precipitously in cost. If storage dropped in cost multiple orders of magnitude, and there's reason to believe that it will drop at least an order of magnitude, then thermal cycle electricity will completely obsolete.
    • jeppesen-io 5y ago
      Thank you for saying this. I find in technical circles, like HN, it's often underappreciated how dramatically solar, wind and stored energy are becoming cheaper year by year while production capacity continues to grow
• gennarro 5y ago
  I'm shocked by how easily electricity prices are easy to find yet no one knows what theirs is! Example: https://utility.report https://utility.report
  • greendave 5y ago
    How exactly do they come up with a single price per zip-code given that rates are dependent on choice of electricity plan, on-peak vs. off-peak, % of baseline and so forth?
  • thomastu 5y ago
    those are average rates, not actual retail rate schedules - useful for talking about something like an annual consumption number but not so much for something like net metering where the time of use is a big deal.
• cwal37 5y ago
  ctrl+f "missing money" no hits. A lot of this is actually a very well explored problem in electricity markets, particularly at the wholesale level, and part of why, e.g., capacity markets exist in most deregulated market sin the US (outside of Texas). I know this post is focused on retail, and net metering, but this concept extends pretty broadly across electricity generation and sales. For a little more explanation on the capacity market side of things I'll quote from the Independent Market Monitor for NYISO, ERCOT, MISO, and ISO-NE in a FERC filing from last year (disclaimer, I used to work there)[0]: The purpose of the capacity market is to satisfy resource adequacy requirements. Because an efficient energy-only market would generally sustain a long-term capacity level far below the planning requirements of the Eastern RTOs, additional revenues are needed to sustain capacity levels to satisfy these requirements. The capacity markets, therefore, set prices that reflect the marginal cost of satisfying these planning requirements and provide the “missing money”. This marginal cost or “missing money” in the long-run is equal to the cost of investment minus the operating revenues from the sale of energy, ancillary services, etc. If resources are under-compensated for energy and ancillary services, it will tend to increase the missing money and raise capacity prices. Importantly, if flexible resources are systematically under-compensated, it will inefficiently shift revenues into the capacity market and shift incentives in favor of investment with less flexible characteristics. For this reason, we have repeatedly sought to promote energy and ancillary services market reforms that will reduce the need for out-of-market actions to maintain reliability, which while necessary in the short-term, are particularly harmful to incentives for investment in flexible resources. [0] https://www.potomaceconomics.com/wp-content/uploads/2021/03/FERC-RA-Tech-Conf_PE-Comments_Final-alt-1.pdf https://www.potomaceconomics.com/wp-content/uploads/2021/03/...
• irrational 5y ago
  > If a house on average generates as much as it uses, the electric bill will be zero. (In practice there’s a minimum monthly fee, but it’s pretty low.) This was the case in the last house I lived in. The solar panels generated enough power that there was never an electric bill other than the $12 fee to be hooked into the grid. And this was in cloudy, rainy Oregon. I did think about this scenario. If everyone had panels like that house, how could PGE make any money? Note: we lived in that house for about 10 years before installing panels, so we knew the average monthly electric bill. We paid for the panels with a loan and the monthly loan payment was lower than any of our monthly payments during the previous 10 years. It was cheaper to get panels and pay the loan than to pay the monthly electric bill without panels.
  • secabeen 5y ago
    > The solar panels generated enough power that there was never an electric bill other than the $12 fee to be hooked into the grid. And this was in cloudy, rainy Oregon. Yeah, this is it in a nutshell. You were only being charged $12/month for a grid connection, when a grid connection was clearly worth much much more than that. The usual cost of a full off-grid system can clear $100k if it's sized to cover HVAC.
    • PaulDavisThe1st 5y ago
      > The usual cost of a full off-grid system can clear $100k if it's sized to cover HVAC. Or is essentially absurd... my 6.6kW system generates about 3x more than we need for 8 months of the year, but about 1/3 of what we need for 4 months of the year (the period when our air-source heat pumps, aka minisplits, are in use). To be able to go off-grid would require either: - a systems 3x bigger than we have, generating 9x more power than we need for 8 months of the year OR - a gigantic (10MW?) battery system to store the excess power from the summer Neither of these make any sense to me, and seem like well-intentioned but fundamentally ill-conceived designs.
      • secabeen 5y ago
        This is a fair observation. Interestingly, what you describe (a system 3x larger than your average load) is essentially what the grid has to have. Looking at the California data, here in Winter, today's peak usage is about 28 Megawatts and the overnight low is about 20MW. However, the peak all time usage for California is over 50MW. Our entire electric grid has to handle that 100% delta in usage; it's not surprising that a personal grid would have to handle at least that much delta. That's just what is required to have 24x7x365 electricity; you can't hide from that reality.
• yholio 5y ago
  Rooftop solar was always form of green subsidy: you get the same flat price for energy you dump into the network as the price the utility charges you. But what you put in at random times of your own choosing is much, much less valuable than a guaranteed power feed at any hour or season. At times it might have negative value, the power you put in costs the utility money. That simply cannot scale. The only way I can see the two prices equal is if you provide power in the network on request from the utility, at specific time intervals from your own storage. But then you wouldn't need a power utility.
• nathias 5y ago
  prices as prices aren't lies, they just don't have any immediate relation to costs
• georgeecollins 5y ago
  One of the most common "lies" is price windowing where you charge multiple prices for something that costs you the same. Like when Intel used to sell a 486SX at a lower price because the math co-processor was deactivated on the same chip as the more expensive 486 DX. This pricing "lie" allowed Intel to get more total revenue and sell more total units because they could charge more and less at the same time. Airline ticket prices also work like this sometimes. Why I put "lie" in quotes is that prices always reflect more than cost. They also reflect the utility to the purchaser. Some people are always willing to pay more or less. Beyond cost, price also reflects utility. It's true the price of electricity is manipulated to shape behavior, but its also true that 200 kW hours is twice as useful as 100kW hours and the purchaser may be willing to pay twice as much for it.
  • parineum 5y ago
    > because the math co-processor was deactivated on the same chip I don't know if this is true of your specific example but modern CPUs SKUs that are differentiated by core count do the same thing except they disable those extra cores because they are faulty but will disable a working core to make a quota.
• dangjc 5y ago
  A huge portion of electric bills are paying for wildfire damage/hardening and for expensive transmission lines. Rooftop solar reduces both, but is not being credited for it in NEM 3.0. When electricity is generated and consumed locally, it doesn't need to be transmitted across huge distances using expensive transmission infrastructure. There's also less wires that can trigger fires. But infra is the only way regulated utilities are allowed to make a profit. https://www.nytimes.com/2021/07/11/business/energy-environment/biden-climate-transmission-lines.html https://www.nytimes.com/2021/07/11/business/energy-environme... These increased costs being passed to California consumers could kill electric cars. We're paying $0.30-$0.40 / kwh to PG&E, which pencils out to over $9 / gallon. https://www.caranddriver.com/news/a35152087/tesla-model-3-charging-costs-per-mile/ https://www.caranddriver.com/news/a35152087/tesla-model-3-ch...
  • jeffbee 5y ago
    The only reason that sounds bad is because fuel is under-taxed. Gas should be at least $9/gallon.
  • jefftk 5y ago
    > We're paying $0.30-$0.40 / kwh to PG&E, which pencils out to over $9 / gallon. No way. An electric car (including charging inefficiency) uses about ~0.3 kWh per mile, so at $0.35/kWh each mile costs you ~$0.10 in electricity. If a gas car gets 35mpg, then for each mile to cost ~$0.10 in fuel, gas would need to cost $3.50 not $9. How are you getting $9?
    • ternus 5y ago
      If you have an electric car, you can get PG&E's EV time of use rate. Schedule charging during off-peak hours (past midnight) and it's on the order of $0.13/kWh.
• Dave_Rosenthal 5y ago
  I just moved into a new construction house in Colorado with a substantial (23kW) solar installation. It’s been interesting to see how much, in the words of the author, ‘feeding bread to pigs’ I have ended up doing. The solar installation (which is probably larger than optimal) is dictated by the policy for the house to be “net zero”, which in turn is dictated by a policy based on the size of the house. (In practice, solar is the cheapest way for the builder to get all the way to ‘net zero’ after the usual decent insulation, windows, etc.) So that’s how I got solar, but now I want to turn it on. Well, this is not in the interest of the utility at all (they lose money), but they still by policy get to ‘approve it’. This required a many-month (and many phone call) process of reviews, approvals, etc. which concluded in the utility activating (installing a meter for) the installation. In total it was maybe 9 months from when the solar was all wired up and sitting in the sun until it was producing any electricity for the world! Now the utility gives me a choice of two billing options. At the end of each month, excess energy I’ve generated can either be put in a kWh bank and rolled over as credit, or it can be paid out. However, the payout is hilariously low (like $0.01/kWh) so of course everyone chooses the bank. But now incentives are all screwed up! Since I easily generate more electricity that I will ever use (see above for why policies drove us to an installation larger that necessary) my household has no incentive to conserve at all. E.g. I am heating my garage with an electric heater because it costs me zero. So the net effect of all of these policies intended to promote conservation are: 1) To drive up the price of housing in an area where that is already one of the big challenges the community is fighting 2) To completely disincentivize any actual conservation 3) To have new solar installations laying fallow for 6-9 months I don’t know what the solution is, but the problems are pretty easy to see.
  • JaimeThompson 5y ago
    >To completely disincentivize any actual conservation If you are running off of 100% solar that isn't a net negative impact to the environment to use more power in nearly every case.
    • aftbit 5y ago
      Don't forget the embodied energy of the overbuilt solar system!
• tempnow987 5y ago
  One BIG issue with this article. You are often not allowed to just go off grid and use your own battery as a backup. Does anyone know if they've changed that (zoning / building code / certificate of occupancy) requiring an interconnect with the grid? That is my big issue here. We are getting told how we need to pay for them to build us a bigger / higher power grid. What if I want to go off grid.
  • ohgodplsno 5y ago
    Make your own country. Being interconnected with the grid is a net positive, for everyone, you included.
    • bick_nyers 5y ago
      If the law is going to mandate staying connected to the grid (subject to any maintenance fees the utility company desires, independent of usage), then those grid maintenance fees should be moved to tax dollars.
    • tempnow987 5y ago
      Listening to a big corp like PG&E whine about how they are going to need to spend billions to upgrade a grid I'm not using, and so will need to charge me to have solar and battery power is rediculous if part of the reason they need to spend all this money is they won't allow folks to be disconnected from the grid.
  • jeffbee 5y ago
    I don't know who told you this but I own a 100% off-the-grid property in Mono County that has solar and battery banks (and a generator).
    • tempnow987 5y ago
      Fantastic! Then I have no complaints. The grid is a great resource, IF you are using it, then you should pay for it. And mid-day solar (when PG&E curtails their own solar) does not have same value of power at 6PM - so they need to fix that for sure, which will result in more local battery demand (a good thing).
• Johnny555 5y ago
  Large commercial customers typically pay capacity costs -- i.e. if you need 1MW of power, you pay for that 1MW of capacity on top of your actual demand costs. If they did this with residential customers, it would make residential energy storage (i.e. batteries, but maybe thermal or other storage) more attractive, so instead of paying for a 200A circuit to meet your peak demand, you pay for a 50A circuit to keep your home battery charged and that battery kicks in to meet your peak demand. And once you have that battery, you may as well add solar as well.
• seventytwo 5y ago
  The grid phase needs to be maintained as well, and I don’t know how that would happen without a giant, centralized set of turbines somewhere.
• PaulDavisThe1st 5y ago
  Here in New Mexico, when I connected our 6.6kW PV array to the grid, I had the choice of net metering or not. But there was a wrinkle: if I chose net metering, the power company could use our installation to count towards its own state and federally mandated shift toward renewables. Being a cantakerous old geezer, I said hell no, and opted for no net metering. Works out OK from my perspective: still pay small electricity bills for the excess that we need for 3-4 months a year, and just the $7.70 connection charge for the rest.
• Fr3dd1 5y ago
  Kind of different in germany. I work as a dev team lead for a company that develops billing software for the german energy sector. Its super regulated by the government. For example, depending on the year you got your soloar, the amount of money you get for your energy you bring back into the grid, is different. All has its pros and cons tho
  • FabHK 5y ago
    Can I ask, in Germany, are there (many?) days when households with solar are net energy positive?
• zbrozek 5y ago
  What compels someone to elect a NEM plan? It seems increasingly favorable to avoid them and set your equipment to zero-export.
• jupp0r 5y ago
  The solution to the problem is real time pricing based on the grid's requirements at any moment in time. The current model also disincentives battery installations. If prices were adapted to grid requirements, we'd have negative energy prices during peak solar production hours so customers should be encouraged to charge their own batteries using their solar or even get paid for charging their batteries via the grid. During hours of high demand but little production, batteries should send energy to the grid. Of course all of this requires infrastructure as well, which needs to be paid for somehow.
  • josephcsible 5y ago
    > The current model also disincentives battery installations. Isn't this actually a good thing, at least right now? Wouldn't replacing more ICE vehicles with EVs help the environment more than installing more Powerwalls would, and don't EVs and Powerwalls both share the same currently-constrained battery supply?
• kelnos 5y ago
  The annoying thing about this is that, if the new California metering rules do end up passing, I will definitely not be installing solar on my roof, because it will end up either costing more in the long run, or the break-even point will be so far out that it's not worth it to me. Now, as the article says (or at least hints at), maybe there are better things we can do as a society to reduce carbon emissions than have individuals install solar panels on their house, to the point that it doesn't make sense to subsidize it quite as much as we do today. I don't think I've heard regulators and utilities make that argument, though. I do agree that the generation and transmission infra needs to be paid for, and if I'm giving the grid excess power instead of money, that reduces the utility's ability to maintain their infra (and PG&E is already lacking in that area). And if I do get much lower utility bills (from a solar installation), then that means that eventually utility rates will have to go up. And then essentially lower-income folks, who can't afford solar panels, will be subsidizing people like me who can... which is not remotely fair. However, if we do believe that residential rooftop solar is something that we need to be promoting and incentivizing, then the current/old net metering rules need to stay. And to make up the difference on the infra side, one of two things needs to happen: 1) utility prices should go up, and the government should offer subsidies and credits to low-income folks, or 2) the government should just fund maintenance of the grid directly.
  • GravitasFailure 5y ago
    California requires[0] new construction to have solar now, so while you might not have to worry about installing it you very well may be stuck with a system if you move. I'm not sure I agree with your assertion that increased solar installs will leave less money for grid infrastructure. With the moves away from gas for heating and cooking and the proliferation of electric cars, it seems that demand for residential power is only going to go up with solar offsetting it, so demand on the grid should stay fairly steady with increases in areas that solar doesn't work as well. Higher density housing will also increase energy demands with limited ability to offset the demand with solar. Overall, that should mean income to maintain the grid should hold steady or even go up, though I suppose only time will tell. [0]https://www.energy.ca.gov/news/2018-05/energy-commission-adopts-standards-requiring-solar-systems-new-homes-first https://www.energy.ca.gov/news/2018-05/energy-commission-ado...
• OliverJones 5y ago
  Net bandwidth is somewhat similar. During the first dotcom bubble back in the 1990s, the colocation companies (predecessors to today's cloud companies) sold bandwith based on peak bandwidth usage. It was called the 95/5 plan. It worked like this. They measured my egress data and stored it for every five minutes in the month. At the end of the month they'd calculate the 95th percentile of all those five-minute measurements and then charge me for that. In other words, I paid for peak egress. Now AWS just bills US$0.09 per gigabyte. Their billing algorithm doesn't care about my peak load. And I have to pay just as much for the rest of the year as I would pay on Cyber Monday, when Amazon's bandwidth is spoken for by their own servers. That's a dislocation. Lots of stuff works that way. Electricity, water, sewer, highway tolls. Regulated monopoly electric grid operators traditionally get their rates set as a percentage of the value of their accumulated capital physical plant: turbines, poles, cables, transformers, switches, the land they sit on, and all that. Part of that cost is fixed, but most of it varies with the amount of power they sell. Net billing for domestic solar electric panels isn't fair to the electric grid operator. When I connect to them on a net-zero tariff, I basically get 100%-efficient power storage for free. They're my battery, and a fine battery they are. The local grid has an excellent pumped-storage hydroelectric rig. It's about 70% efficient, and it's about 70 miles from here. Shouldn't I pay something for all that if I use it? (The Northfield Mountain storage facility was originally built to store the Vermont Yankee nuclear plant's overnight output for peak load, and it outlasted the nuclear plant.)
• hbarka 5y ago
  The ultimate answer to this is to go self-powered. The sun will never raise its rates, and PV panels+batteries are getting cheaper. Utilities are not admitting that independent power generators contribute to creating a more resilient grid at no cost to ratepayers/full cost to the homeowner.
  • pphysch 5y ago
    It's certainly increasing the availability of power but I fail to see how it makes a "more resilient grid". Who is gonna fix a power line that goes down?
    • hbarka 5y ago
      A downed power line is minor compared to Hurricane Sandy or the Great Texas Freeze. Who demonstrated resiliency during that time? The ones with Powerwalls and microgrids powered by gas/alternate storage systems kept the lights on in many places. The lesson is that reliance on a centralized grid can quickly turn into a big problem. Distributed and localized energy generation and storage is where the incentives should be placed.
      • pphysch 5y ago
        I see, that makes sense.
• dzhiurgis 5y ago
  At which point is it for utilities to install batteries than to maintain grid? Or is it never since grid maintenance is their bread and butter?
• pabs3 5y ago
  Probably switching to transparent pricing is the way to go. Calculate the costs of things ($X/year for maintaining transmission lines and other over Y customers = $Z infra fee) and charge separately for each of them.
  • josephcsible 5y ago
    This is a good idea, but it would never survive in California, because people would complain that it's regressive. Rich households use more electricity than poor households, but the infrastructure maintenance cost for each is approximately equal, so with your proposal, poor households wouldn't get subsidized by rich ones anymore.
    • pabs3 5y ago
      Not necessarily, you can scale each of the fees by income, either of the household or the average income of the suburb/region. Or just introduce subsidies for poor households.
• caseysoftware 5y ago
  I bought a giant solar array this fall and finally got it activated last month. The initial way I thought "net metering" would work was: If we buy & consume 2000kWh but then produce and sell back 2000kWh, then the total bill should be near-zero. That's not even close. When we buy power, we pay $0.115/kWh but when we produce excess power, they only buy it at $0.027/kWh. Therefore, they bill us for $230 (0.115 * 2000) and credit us $54 (0.027 * 2000) so our bill is still ~$176. In order to zero out our bill, we have to sell back 4.25x more than we consume.
  • sagarm 5y ago
    The article notes that at least in California, infra costs are roughly 75% of real costs so the sounds about right.
  • porknubbins 5y ago
    I didn’t realize it was that bad but kind of makes sense that they are not going to pay you “retail” prices. Another way of looking at it is there is a huge incentive to size your installation for 100%, not just plan to offset some cost of use because you pay a big premium for their power.
• HWR_14 5y ago
  He omits the biggest issue with net metering. He claims "the utility is acting like a giant battery." But it's not. Power plants don't turn off/on with demand, at least not that rapidly changing a demand. And the grid doesn't store electricity. The reason electricity prices have gone negative is that the grid needs to offload the power somehow. If everyone is producing tons of solar during the day, feeding back to the grid, and consuming at night, the utility is twice fucked over. They have to pay to dispose of daylight power, and then pay to generate and transmit night power, all while making no money.
• deleted 5y ago
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