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It's worth noting that while net metering is helpful for bootstrapping rooftop solar, ratepayers are essentially subsidizing solar arrays on the houses of (weal

It's worth noting that while net metering is helpful for bootstrapping rooftop solar, ratepayers are essentially subsidizing solar arrays on the houses of (wealthier) homeowners. The utility company would normally pay wholesale rates for solar energy (which has an aggressive duck curve), but instead they're forced to pay retail prices to net metering customers. California pays wholesale rates now (they're on NEM 3.0) with a fixed fee for maintaining the wires even if you don't use them a whole lot.

lokar 1y ago
I’m not sure it makes sense to pick one spot in such a complex system and say “x is subsidizing y” If you believe burning carbon fuels is a big negative externality, then solar users are subsidizing everyone else. When the utility puts up capital to build a plant, they are promised a return on that investment over time.
- onlyrealcuzzo 1y ago
  > If you believe burning carbon fuels is a big negative externality, then solar users are subsidizing everyone else. If the energy company is paying you $0.12 to sell electricity for $0.09 - they're losing money. Not to mention, they aren't covering any of the costs of maintaining their network (which is a large chunk of the overall cost). If they're forced to buy rooftop solar from homeowners at a loss - they are FORCED to transfer that loss onto other costumers - which means the other customers are subsidizing that. There isn't anything tricky about who is subsidizing whom. Your issues with "dirty" energy are entirely separate.
  - abracadaniel 1y ago
    They’re also simultaneously selling it again for $0.12 ensuring that your surplus free electricity is used by your neighbors. Conceptually it’s a wash, because they then scale down the amount of power they generate. The real world consequence is that power generation is not easily scaled on demand.
    - mgraczyk 1y ago
      "because they then scale down the amount of power they generate" They spend 0.12 for power that would have cost them much less than 0.12 to generate. The consequence is that they make up for it by charging other customers more.
      - AnthonyMouse 1y ago
        One way of thinking about this is in terms of kWh rather than cents. If you supply a kWh to the grid at midday and then consume a kWh overnight, what should your balance of payments be? If you're getting the wholesale rate during the day, do you also get the wholesale rate at night? What this is really about is, how should we pay for the fixed costs of the infrastructure? There isn't an objective answer to that. You could say that everyone pays a fixed service charge and then there is no contribution per kWh, and then the per-kWh rate for retail and wholesale are exactly equal. That's the most economically efficient thing, but then people who don't use a lot of electricity are paying a high fixed fee. Another high efficiency thing is to use time of day metering, so that the difference between the wholesale and retail pricing is highest when supply is most outstripped by demand. That also gets rid of your problem with solar because then they can get retail, but get retail based on the time of day, so supplying power when it's cheap and using it when it's expensive isn't going to net out. But charging retail and paying wholesale to the same customers isn't ideal, because those customers also have a choice. If they're getting paid $0.04/kWh for generation during the day but then paying $0.12/kWh or more at night in order to pay for the infrastructure, they might find it more economical to install a battery system locally and then stop buying power from the power company at all on most days. And then they're still not contributing anything per kWh to the fixed costs of infrastructure, but now you've actually made it worse, because a local battery system is going to be configured to align with the needs of the owner rather than the needs of the grid. Instead of incorporating the battery system into the grid so it can dump its full capacity during the nasty part of the duck curve and then fulfilling the lower demand for the rest of the night from baseload generators, the homeowner has the incentive to sell nothing from their batteries to the grid at 7PM (because they're only getting wholesale) so they can have it left to use for themselves to avoid paying retail at midnight. Then the grid still has to cover its fixed costs from the other customers and can't even affect their usage with time of day metering because retail off-peak is too close to wholesale on-peak.
  - gusgus01 1y ago
    At least in New York state, they've recently tried to deal with this discrepancy while still keeping the incentive to install solar. There's a flat rate fee for all electricity customers to be hooked up to the grid to support grid infrastructure. There's also an additional fee to those that have solar panels called the Customer Benefit Contribution that is based off your generation to help fund energy efficiency projects and low-income programs.
  - Y_Y 1y ago
    > they are FORCED to transfer that loss onto other costumers How does that figure? I won't even insist you account for second order effects of having the solar panel, just that the consumer is only paying for their net draw of energy from the grid (which has decreased).
  - herewego 1y ago
    You are stating a common misconception. That being that solar owners should be paying for anything other than the cost to push power into the distribution grid. The grid fees solar owners pay account for that. They should not be paid for supplying power at wholesale rates bc that assumes a wholesale power flow model, which is not physically applicable to solar owners who support the local distribution grid. If you look at the portion of the grid that a solar owner interacts with, how their power flows through it, the efficiencies of supplying that power locally are clear and should be at retail + distribution fees only. It’s the solar owners that are actually (marginally) subsidizing the non-solar owners in reality. The utilities and ISO’s do not argue against this. They want to eliminate NEM 2.0 in favor of NEM 3.0 bc the difference in rates are to then be provided by alternative incentives such as battery pay-for-performance programs. Disclaimer: I own an energy company that does C&I and Residential energy aggregation and participates in wholesale market energy supply and incentive programs.
    - reitzensteinm 1y ago
      Do you have a source for "The grid fees solar owners pay account for that"? If you look into e.g. PG&E's financials, their expenses are dominated by operation and maintenance of the grid, not what they pay for electricity. You appear to be claiming that the grid fees cover this cost entirely, but they're not high, e.g. $15/mo on some plans. You're obviously very knowledgeable about the space, but I suspect you may be talking your book a bit here.
      - cycomanic 1y ago
        I'm not sure I understand how what you say contradicts what the previous poster said? Can you elaborate? I think the point implied in the previous comment was that pushing into a grid locally is much cheaper for the grid operator than distributing power from a far away power plant?
        reitzensteinm 1y ago
        It's not an outright contradiction, just an explanation of why I doubt their claim. I am not myself making a claim. Given that they are correcting a "common misconception", I think it's entirely appropriate to ask for a source.
  - rainsford 1y ago
    > Your issues with "dirty" energy are entirely separate. It's not really, that's the entire idea behind economic externalities. Power generation using carbon sources brings with it a cost in the form of pollution and greenhouse gases not directly paid by the customer. That cost is effectively spread out evenly across society, so those who use less carbon intensive energy are more or less subsidizing those who use more. Or to put it another way, if the folks with rooftop solar were instead just using electricity from coal or gas plants like their neighbors, their neighbors would have an increased pollution/global warming cost even if they don't see it in their electric bill. Of course the math may or may not actually work out since the net metering costs for rooftop solar are based on electricity rates rather than any pollution based externalities. But the idea that it's strictly an economic transfer from people without solar to those with solar doesn't seem entirely accurate. And the economic impacts of "dirty" energy are definitely not a separate issue.
    - conradev 1y ago
      Utilities already have mandates to buy X% of their power from renewable sources. They primarily do this by building/buying utility scale renewables because that is more cost effective than paying homeowners retail rates for their electricity. Distributed generation is great because generation and consumption are next to each other, and this can theoretically reduce peak load on the grid. The problem is that the sun goes down every day at the same time, and we're back to the same peak load. The lowered rates in NEM 3.0 actually incentivize homeowners to buy batteries and load shift, which does actually help reduce peak load. Batteries are still too expensive, though, and the hope is that falling battery costs make it economical. Externalities exist, yes, but they only matter when they get priced in. Capital moves energy markets, not vibes.
- conradev 1y ago
  The primary point I was trying to make in saying that "x is subsidizing y" is that it is literally unsustainable. All net metering has to (and will) end at some point along the curve from 0% to 100% rooftop solar adoption because it becomes financially unsustainable for the utility. Which doesn't mean it's bad policy! The solar industry needs help to grow. But this sort of thing (utilities ending net metering) is only to be expected. California switched to NEM 3.0 with only 20% rooftop solar adoption. Nationally we are at like 4-5% (but I might be out of date). https://americanexperimentnd.org/stealing-with-solar-how-wealthy-californians-used-solar-panels-to-pick-the-pockets-of-low-income-families/ https://americanexperimentnd.org/stealing-with-solar-how-wea...
  - lokar 1y ago
    I think a rational and fair thing to do is offer clear binding rules up front for new installs, time limited. 10-15 years should be enough.
pfdietz 1y ago
And it's not just for maintaining the wires, but for maintaining the backup power sources for when everyone with solar and batteries suddenly needs them. One is not just buying power from the grid, one is buying the capability of demanding that power at any time.
tannedNerd 1y ago
I didn’t think I’d see corporate utilities propaganda on hacker news but here are. The main rebuttal to this is why are non of the public utilities (Sacramento, Santa Clara, and La power) in California trying to get on nem 3.0 if it’s such a profit loss and causing so much “unfairness”? The answer is because it’s made up and the investor utilities want to be able to sell you all the power. They would love to get rid of rooftop solar.
- conradev 1y ago
  Both can be true! IOUs like Dominion and especially the ones in California are corrupt. They do want to discourage rooftop solar and NEM 3.0 is a battle between the solar industry and IOUs. But the economics still stand, and your local power co-op is still going to have to end net metering at some point, too. Its a matter of when, and you could absolutely argue it’s too early. My ideal model is what the city of Cambridge, MA did: They built their own solar farm, started their own retail electricity provider (only found in MA and TX), and automatically opted everyone into cheaper, cleaner power by default. We need the flexibility of REPs to de-emphasize the role of IOUs in building generation. Because then they don’t compete as directly with distributed generation.
yummypaint 1y ago
I think this post confuses net metering with feed-in laws. With net metering, if a customer generates more energy than they consume, the utility does not cut them a check at the end of the month, it only offsets their use, possibly with limited rollover. On average, the customer only consumed their own energy and the utility got some for free as well. I would also point out that with solar this free excess is directly helpful to utilities because it happens in the middle of the day when summer energy use peaks. This allows the utility to have less base load capacity which saves everyone money. Feed-in laws require utilities to buy all power fed to the grid at retail rates. They generally don't exist in the US but Germany grew a lot of its renewable capacity that way.
- conradev 1y ago
  > It only offsets their use This is exactly the problem. During the day when solar energy is plentiful, the homes don’t use energy – great! But at night, they do, and it costs the power company a lot more money to serve this power at night than they are saving during the day. > I would also point out that with solar this free excess is directly helpful to utilities because it happens in the middle of the day when summer energy use peaks It is not. Peak load happens in California in the summer, yes, but the moment the Sun goes down. Not during the day. If the houses have batteries for load shifting, then yes, distributed generation is helpful for peak load. But not without. Feed-in tariffs in Germany were a huge “gift to the world” [1] and instrumental to the solar industry. But not sustainable :P 1 - https://gregnemet.net/book/ch5 https://gregnemet.net/book/ch5

lokar 1y ago

I’m not sure it makes sense to pick one spot in such a complex system and say “x is subsidizing y” If you believe burning carbon fuels is a big negative externality, then solar users are subsidizing everyone else. When the utility puts up capital to build a plant, they are promised a return on that investment over time.

onlyrealcuzzo 1y ago
> If you believe burning carbon fuels is a big negative externality, then solar users are subsidizing everyone else. If the energy company is paying you $0.12 to sell electricity for $0.09 - they're losing money. Not to mention, they aren't covering any of the costs of maintaining their network (which is a large chunk of the overall cost). If they're forced to buy rooftop solar from homeowners at a loss - they are FORCED to transfer that loss onto other costumers - which means the other customers are subsidizing that. There isn't anything tricky about who is subsidizing whom. Your issues with "dirty" energy are entirely separate.
- abracadaniel 1y ago
  They’re also simultaneously selling it again for $0.12 ensuring that your surplus free electricity is used by your neighbors. Conceptually it’s a wash, because they then scale down the amount of power they generate. The real world consequence is that power generation is not easily scaled on demand.
  - mgraczyk 1y ago
    "because they then scale down the amount of power they generate" They spend 0.12 for power that would have cost them much less than 0.12 to generate. The consequence is that they make up for it by charging other customers more.
    - AnthonyMouse 1y ago
      One way of thinking about this is in terms of kWh rather than cents. If you supply a kWh to the grid at midday and then consume a kWh overnight, what should your balance of payments be? If you're getting the wholesale rate during the day, do you also get the wholesale rate at night? What this is really about is, how should we pay for the fixed costs of the infrastructure? There isn't an objective answer to that. You could say that everyone pays a fixed service charge and then there is no contribution per kWh, and then the per-kWh rate for retail and wholesale are exactly equal. That's the most economically efficient thing, but then people who don't use a lot of electricity are paying a high fixed fee. Another high efficiency thing is to use time of day metering, so that the difference between the wholesale and retail pricing is highest when supply is most outstripped by demand. That also gets rid of your problem with solar because then they can get retail, but get retail based on the time of day, so supplying power when it's cheap and using it when it's expensive isn't going to net out. But charging retail and paying wholesale to the same customers isn't ideal, because those customers also have a choice. If they're getting paid $0.04/kWh for generation during the day but then paying $0.12/kWh or more at night in order to pay for the infrastructure, they might find it more economical to install a battery system locally and then stop buying power from the power company at all on most days. And then they're still not contributing anything per kWh to the fixed costs of infrastructure, but now you've actually made it worse, because a local battery system is going to be configured to align with the needs of the owner rather than the needs of the grid. Instead of incorporating the battery system into the grid so it can dump its full capacity during the nasty part of the duck curve and then fulfilling the lower demand for the rest of the night from baseload generators, the homeowner has the incentive to sell nothing from their batteries to the grid at 7PM (because they're only getting wholesale) so they can have it left to use for themselves to avoid paying retail at midnight. Then the grid still has to cover its fixed costs from the other customers and can't even affect their usage with time of day metering because retail off-peak is too close to wholesale on-peak.
- gusgus01 1y ago
  At least in New York state, they've recently tried to deal with this discrepancy while still keeping the incentive to install solar. There's a flat rate fee for all electricity customers to be hooked up to the grid to support grid infrastructure. There's also an additional fee to those that have solar panels called the Customer Benefit Contribution that is based off your generation to help fund energy efficiency projects and low-income programs.
- Y_Y 1y ago
  > they are FORCED to transfer that loss onto other costumers How does that figure? I won't even insist you account for second order effects of having the solar panel, just that the consumer is only paying for their net draw of energy from the grid (which has decreased).
- herewego 1y ago
  You are stating a common misconception. That being that solar owners should be paying for anything other than the cost to push power into the distribution grid. The grid fees solar owners pay account for that. They should not be paid for supplying power at wholesale rates bc that assumes a wholesale power flow model, which is not physically applicable to solar owners who support the local distribution grid. If you look at the portion of the grid that a solar owner interacts with, how their power flows through it, the efficiencies of supplying that power locally are clear and should be at retail + distribution fees only. It’s the solar owners that are actually (marginally) subsidizing the non-solar owners in reality. The utilities and ISO’s do not argue against this. They want to eliminate NEM 2.0 in favor of NEM 3.0 bc the difference in rates are to then be provided by alternative incentives such as battery pay-for-performance programs. Disclaimer: I own an energy company that does C&I and Residential energy aggregation and participates in wholesale market energy supply and incentive programs.
  - reitzensteinm 1y ago
    Do you have a source for "The grid fees solar owners pay account for that"? If you look into e.g. PG&E's financials, their expenses are dominated by operation and maintenance of the grid, not what they pay for electricity. You appear to be claiming that the grid fees cover this cost entirely, but they're not high, e.g. $15/mo on some plans. You're obviously very knowledgeable about the space, but I suspect you may be talking your book a bit here.
    - cycomanic 1y ago
      I'm not sure I understand how what you say contradicts what the previous poster said? Can you elaborate? I think the point implied in the previous comment was that pushing into a grid locally is much cheaper for the grid operator than distributing power from a far away power plant?
      - reitzensteinm 1y ago
        It's not an outright contradiction, just an explanation of why I doubt their claim. I am not myself making a claim. Given that they are correcting a "common misconception", I think it's entirely appropriate to ask for a source.
- rainsford 1y ago
  > Your issues with "dirty" energy are entirely separate. It's not really, that's the entire idea behind economic externalities. Power generation using carbon sources brings with it a cost in the form of pollution and greenhouse gases not directly paid by the customer. That cost is effectively spread out evenly across society, so those who use less carbon intensive energy are more or less subsidizing those who use more. Or to put it another way, if the folks with rooftop solar were instead just using electricity from coal or gas plants like their neighbors, their neighbors would have an increased pollution/global warming cost even if they don't see it in their electric bill. Of course the math may or may not actually work out since the net metering costs for rooftop solar are based on electricity rates rather than any pollution based externalities. But the idea that it's strictly an economic transfer from people without solar to those with solar doesn't seem entirely accurate. And the economic impacts of "dirty" energy are definitely not a separate issue.
  - conradev 1y ago
    Utilities already have mandates to buy X% of their power from renewable sources. They primarily do this by building/buying utility scale renewables because that is more cost effective than paying homeowners retail rates for their electricity. Distributed generation is great because generation and consumption are next to each other, and this can theoretically reduce peak load on the grid. The problem is that the sun goes down every day at the same time, and we're back to the same peak load. The lowered rates in NEM 3.0 actually incentivize homeowners to buy batteries and load shift, which does actually help reduce peak load. Batteries are still too expensive, though, and the hope is that falling battery costs make it economical. Externalities exist, yes, but they only matter when they get priced in. Capital moves energy markets, not vibes.
conradev 1y ago
The primary point I was trying to make in saying that "x is subsidizing y" is that it is literally unsustainable. All net metering has to (and will) end at some point along the curve from 0% to 100% rooftop solar adoption because it becomes financially unsustainable for the utility. Which doesn't mean it's bad policy! The solar industry needs help to grow. But this sort of thing (utilities ending net metering) is only to be expected. California switched to NEM 3.0 with only 20% rooftop solar adoption. Nationally we are at like 4-5% (but I might be out of date). https://americanexperimentnd.org/stealing-with-solar-how-wealthy-californians-used-solar-panels-to-pick-the-pockets-of-low-income-families/ https://americanexperimentnd.org/stealing-with-solar-how-wea...
- lokar 1y ago
  I think a rational and fair thing to do is offer clear binding rules up front for new installs, time limited. 10-15 years should be enough.

pfdietz 1y ago

And it's not just for maintaining the wires, but for maintaining the backup power sources for when everyone with solar and batteries suddenly needs them. One is not just buying power from the grid, one is buying the capability of demanding that power at any time.

tannedNerd 1y ago

I didn’t think I’d see corporate utilities propaganda on hacker news but here are. The main rebuttal to this is why are non of the public utilities (Sacramento, Santa Clara, and La power) in California trying to get on nem 3.0 if it’s such a profit loss and causing so much “unfairness”? The answer is because it’s made up and the investor utilities want to be able to sell you all the power. They would love to get rid of rooftop solar.

conradev 1y ago
Both can be true! IOUs like Dominion and especially the ones in California are corrupt. They do want to discourage rooftop solar and NEM 3.0 is a battle between the solar industry and IOUs. But the economics still stand, and your local power co-op is still going to have to end net metering at some point, too. Its a matter of when, and you could absolutely argue it’s too early. My ideal model is what the city of Cambridge, MA did: They built their own solar farm, started their own retail electricity provider (only found in MA and TX), and automatically opted everyone into cheaper, cleaner power by default. We need the flexibility of REPs to de-emphasize the role of IOUs in building generation. Because then they don’t compete as directly with distributed generation.

yummypaint 1y ago

I think this post confuses net metering with feed-in laws. With net metering, if a customer generates more energy than they consume, the utility does not cut them a check at the end of the month, it only offsets their use, possibly with limited rollover. On average, the customer only consumed their own energy and the utility got some for free as well. I would also point out that with solar this free excess is directly helpful to utilities because it happens in the middle of the day when summer energy use peaks. This allows the utility to have less base load capacity which saves everyone money. Feed-in laws require utilities to buy all power fed to the grid at retail rates. They generally don't exist in the US but Germany grew a lot of its renewable capacity that way.

conradev 1y ago
> It only offsets their use This is exactly the problem. During the day when solar energy is plentiful, the homes don’t use energy – great! But at night, they do, and it costs the power company a lot more money to serve this power at night than they are saving during the day. > I would also point out that with solar this free excess is directly helpful to utilities because it happens in the middle of the day when summer energy use peaks It is not. Peak load happens in California in the summer, yes, but the moment the Sun goes down. Not during the day. If the houses have batteries for load shifting, then yes, distributed generation is helpful for peak load. But not without. Feed-in tariffs in Germany were a huge “gift to the world” [1] and instrumental to the solar industry. But not sustainable :P 1 - https://gregnemet.net/book/ch5 https://gregnemet.net/book/ch5