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It isn't very clear what you mean. If utilities are required to do net metering (i.e. buy all power whenever it is produced at the retail rate rather than buy

by opo 2y ago

It isn't very clear what you mean. If utilities are required to do net metering (i.e. buy all power whenever it is produced at the retail rate rather than buy what they need at the wholesale rate) it is a huge unsustainable subsidy to wealthier homeowners paid for by the less wealthy. It's free riding on the reliability provided by the grid, putting large costs on the less well off. As these costs grew, that also provided an incentive for consumer solar installations to increase. Eventually the issue was impossible to ignore and states are starting to remove the subsidies. It is strange that anyone thought net metering ever made any sense. As the statista.com report says >...Rooftop solar photovoltaic installations on residential buildings and nuclear power have the highest unsubsidized levelized costs of energy generation in the United States. If not for federal and state subsidies, rooftop solar PV would come with a price tag between 117 and 282 U.S. dollars per megawatt hour. https://www.statista.com/statistics/493797/estimated-levelized-cost-of-energy-generation-in-the-us-by-technology/ https://www.statista.com/statistics/493797/estimated-leveliz... Looks like that report is a year old, but I doubt the installation costs have really gone down much since then. (Panel prices come down, but labor costs, etc don't.)

nicoburns 2y ago
> If utilities are required to do net metering Sure, but they are not in most places. IMO subsidies made sense to kickstart the industry given the external costs imposed by climate change, but I agree that they don't anymore. > >...Rooftop solar photovoltaic installations on residential buildings and nuclear power have the highest unsubsidized levelized costs of energy generation in the United States. I don't think levelized cost for generation is the correct metric here. That ignores the costs imposed by grid transmission (and utility profit margins). It's also worth noting that installation costs in the US can be much higher than those in other countries (even other wealthy countries).
- opo 2y ago
  >...IMO subsidies made sense to kickstart the industry given the external costs imposed by climate change, but I agree that they don't anymore. In general, if a dollar of subsidy spent on utility based solar will go much further than a dollar of subsidy spent on consumer rooftop solar, then it makes sense to spend that dollar on where it will go the furthest. That is true now, and was true 10 years ago. >...That ignores the costs imposed by grid transmission (and utility profit margins). But aren't those installations also attached to the grid? If not, the costs go very very high if you have enough battery that you don't need to attach to the grid. >...It's also worth noting that installation costs in the US can be much higher than those in other countries (even other wealthy countries). I wouldn't be surprised if some or all the OECD countries also subsidize rooftop solar, so it might be hard to compare actual costs.
rahimnathwani 2y ago
282 U.S. dollars per megawatt hour Here in San Francisco, PG&E charges about $450 per megawatt hour (35 cents for electricity plus 10 cents for delivery, per kWh). So it seems like solar would be cheaper even without any subsidy?
- opo 2y ago
  Providing the infrastructure and reliability of the grid is very expensive, so there is a huge difference between the wholesale costs and retail rates for delivered electricity. From the latest Lazard report on levelized costs, they estimate utility solar has a cost range of about $29 - $92 per megawatt. Rooftop residential has a cost estimate of about $122 to $284. Both are subsidized, but money is limited and is fungible - a dollar spent subsidizing utility solar will go much further than a dollar spent subsidizing rooftop residential solar. https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-...
  - rahimnathwani 2y ago
    An earlier comment said "The thing with rooftop/local solar is that it doesn't need to compete with wholesale electricity prices, it only need to compete with retail prices." You seemed to disagree with that? I'm pointing out that, at least where I live, it appears this commenter was correct.
    - opo 2y ago
      Generally people who install solar also want to have power at night and when it is cloudy or raining. I think the earlier comment was maybe implying that there would be no grid connection - but that only works if you have enough backup battery to cover all the times the sun isn't shining. Battery costs have not fallen like solar panels have fallen and buying power from the grid would be noticeably cheaper. Even with the subsidies, few people who install solar panels also install enough battery backup that they don't need to use the grid.
      - 2y ago
10u152 2y ago
I don’t know where you live, but I can speak to how it works in Australia. Your energy bill has a fixed daily rate to be connected to the grid. That pays for poles and wires, maintenance etc. To oversimplify a bit there’s also your cost per kWh to buy energy and to sell it. Someone using their own PV system during the day and buying from the grid at night isn’t “free riding” like you think. The connection is paid for by the fixed connection fee.
- opo 2y ago
  I guess it all depends on the prices the utilities have to pay to buy the power and whether they are forced to buy the power if they don't need it. If the price is higher than the rate the utility would pay for utility scale solar, than I think you have to admit the owner of the solar panels is getting at least a small subsidy - likely paid for by other rate payers who are unable to put up solar. If the price paid is basically the same, then there should be no complaints from the other rate payers.

by opo 2y ago

nicoburns 2y ago

> If utilities are required to do net metering Sure, but they are not in most places. IMO subsidies made sense to kickstart the industry given the external costs imposed by climate change, but I agree that they don't anymore. > >...Rooftop solar photovoltaic installations on residential buildings and nuclear power have the highest unsubsidized levelized costs of energy generation in the United States. I don't think levelized cost for generation is the correct metric here. That ignores the costs imposed by grid transmission (and utility profit margins). It's also worth noting that installation costs in the US can be much higher than those in other countries (even other wealthy countries).

opo 2y ago
>...IMO subsidies made sense to kickstart the industry given the external costs imposed by climate change, but I agree that they don't anymore. In general, if a dollar of subsidy spent on utility based solar will go much further than a dollar of subsidy spent on consumer rooftop solar, then it makes sense to spend that dollar on where it will go the furthest. That is true now, and was true 10 years ago. >...That ignores the costs imposed by grid transmission (and utility profit margins). But aren't those installations also attached to the grid? If not, the costs go very very high if you have enough battery that you don't need to attach to the grid. >...It's also worth noting that installation costs in the US can be much higher than those in other countries (even other wealthy countries). I wouldn't be surprised if some or all the OECD countries also subsidize rooftop solar, so it might be hard to compare actual costs.

rahimnathwani 2y ago

282 U.S. dollars per megawatt hour Here in San Francisco, PG&E charges about $450 per megawatt hour (35 cents for electricity plus 10 cents for delivery, per kWh). So it seems like solar would be cheaper even without any subsidy?

opo 2y ago
Providing the infrastructure and reliability of the grid is very expensive, so there is a huge difference between the wholesale costs and retail rates for delivered electricity. From the latest Lazard report on levelized costs, they estimate utility solar has a cost range of about $29 - $92 per megawatt. Rooftop residential has a cost estimate of about $122 to $284. Both are subsidized, but money is limited and is fungible - a dollar spent subsidizing utility solar will go much further than a dollar spent subsidizing rooftop residential solar. https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-...
- rahimnathwani 2y ago
  An earlier comment said "The thing with rooftop/local solar is that it doesn't need to compete with wholesale electricity prices, it only need to compete with retail prices." You seemed to disagree with that? I'm pointing out that, at least where I live, it appears this commenter was correct.
  - opo 2y ago
    Generally people who install solar also want to have power at night and when it is cloudy or raining. I think the earlier comment was maybe implying that there would be no grid connection - but that only works if you have enough backup battery to cover all the times the sun isn't shining. Battery costs have not fallen like solar panels have fallen and buying power from the grid would be noticeably cheaper. Even with the subsidies, few people who install solar panels also install enough battery backup that they don't need to use the grid.
    - 2y ago

10u152 2y ago

I don’t know where you live, but I can speak to how it works in Australia. Your energy bill has a fixed daily rate to be connected to the grid. That pays for poles and wires, maintenance etc. To oversimplify a bit there’s also your cost per kWh to buy energy and to sell it. Someone using their own PV system during the day and buying from the grid at night isn’t “free riding” like you think. The connection is paid for by the fixed connection fee.

opo 2y ago
I guess it all depends on the prices the utilities have to pay to buy the power and whether they are forced to buy the power if they don't need it. If the price is higher than the rate the utility would pay for utility scale solar, than I think you have to admit the owner of the solar panels is getting at least a small subsidy - likely paid for by other rate payers who are unable to put up solar. If the price paid is basically the same, then there should be no complaints from the other rate payers.