5 ms·

What this shows is solar is increasingly threatening the electric utility business model. Even without net metering, demand destruction will cause the traditio

by pfdietz 11mo ago

What this shows is solar is increasingly threatening the electric utility business model. Even without net metering, demand destruction will cause the traditional model to stop working.

thfuran 11mo ago
Will it? I’m not sure how the utilities structure their prices wrt the actual cost, but they definitely separate the baseline connection cost from usage on bills (at least in the US), so they may not be killed by people using very little power as long as the connection fee actually covers things.
- kingstnap 11mo ago
  The hardest possible demand to meet is random, reasonal, and spikey demand spread diffusely over a large area. Which is more or less homes. Conversely the easiest possible demand to meet is localized constant and high demand. Basically AI datacenters or industrial users. These guys are basically paying for the grid and residential have it as a subsidy. The supermajority of the price of electricity is fixed costs related to installing and maintaining capacity. The marginal problem of increasing generation or utilization is cheap. I believe it's like under 20% even for gas power where you have to buy gas. For grid solar it would be even crazier because marginally its basically free they really don't care how much you use it even goes negative but the fixed costs are everything. So what causes a lot of social problems is when wealthy people get their own private solar because the whole current pricing structure revolves around wealthy people using a lot of electricity and paying down the connection costs for poor people. If they have solar the poor people are fronting the maintainence cost which destabilizes everything.
  - mjh2539 11mo ago
    Without load balancing, AI datacenters are very swingy (which is bad).
- jaltekruse 11mo ago
  Unfortunately the connection fee does not cover all fixed cost. For a long time the model has been fairly "progressive" in this regard. Some of the fixed costs of the grid have been paid for by amortization over the per Kw cost, which had the effect of charging people who used more a larger chunk of these fixed costs. Now with the option to provide your own power if you have upfront capital for solar can build as big of a system as they want. As other comments in the thread have mentioned, net-metering is largely functioned as a subsidy to give money to people who are already doing fine financially. I want green energy, and I think that decentralization has definite benefits, but it's pretty hard to argue against maintaining the grid to allow re-balancing and covering supply shortfalls in specific areas. Here is a video discussing this problem - https://youtu.be/C4cNnVK412U?si=ZzZhoApFW3khqrdq&t=720 https://youtu.be/C4cNnVK412U?si=ZzZhoApFW3khqrdq&t=720
  - namibj 11mo ago
    What you could do is bill per energy in e.g. 15 minute chunks, and separately bill for transformer/line capacity by e.g. the peak usage in any such chunk over the contract period, like they do in Germany for atypical load profile industrial users since decades ago. Net metering is overall just entirely stupid as a concept; measure inbound and outbound flow separately if you can't just measure the 15 minute chunks; bill grid fees on the energy price on inbound and only pay energy price on outbound. Or even bill grid fees on outbound up to one of many available large substations, and thus handle the issue of demand across large distances making buildout of solar in a convenient but far away place not being disincentivized vs. more-demand-local buildout.
SoftTalker 11mo ago
Most people aren’t interested in being responsible for their own electrical generation. Especially with payback still being on the order of decades
- seanmcdirmid 11mo ago
  Most people don’t have the capital to be responsible for their own electricity generation, except the rich.
  - andor 11mo ago
    It's really not expensive anymore. There's a Black Friday deal on amazon.de for an entry-level Anker Solix system with 4x500W panels and a 2.6 kWh battery. 1200 EUR. For those that don't have the cash, financing is available. Have you read this, about SunKing and SunCulture in Africa, recently posted on HN: https://climatedrift.substack.com/p/why-solarpunk-is-already-happening https://climatedrift.substack.com/p/why-solarpunk-is-already... Their smallest solar products are small lanterns. Simply having a pollution-free source of light is already a quality of life improvement for some people. One step up is to add a USB port to charge phones.
    - seanmcdirmid 11mo ago
      Oh I’m sure, Pakistan has alot of trade with China also so it’s probably cheaper than in the west. But it would still be expensive for the poorer Pakistanis, and would require some investment, they simply have less ability to do that than a richer middle class Pakistani, so the poor pay the poor tax because they can’t invest capital to bring their costs down. Low Chinese prices are making it more and more possible though. I hope the future will be really different.
      - pfdietz 11mo ago
        We're seeing solar with batteries going in in sub-Saharan Africa, so don't tell me something can't be made to work even with the poor in Pakistan.
more_corn 11mo ago
There’s a business model where distributed solar production and storage is the norm and central grid based generation and delivery is the minority. Such a model is extremely resistant and there’s less system infrastructure necessary. It’s quite feasible to redesign the system around a “distributed first” model.
- idiotsecant 11mo ago
  Where do the massive upgrades to the distribution system required for this kind of setup come from? We simultaneously hate utilities and want them to redesign and pay for a distribution system that was not intended for bidirectional load flow. Our municipal distribution systems are barely adequate. Net metering produces essentially no revenue but imposes a huge load on that infra.
  - kieranmaine 11mo ago
    My understanding is there is less of a need for massive grid upgrades in this model due to the use of storage. Rather than having to be able to distribute peak loads from solar, requiring a larger connection, you can smooth out the supply and distribute an even amount throughout the day, using a smaller connection. The section "1.1.3 Bringing large savings on grid expansions" [1] has a good explanation. 1. https://ember-energy.org/latest-insights/solar-electricity-every-hour-of-every-day-is-here-and-it-changes-everything/chapter-1-how-batteries-will-unlock-solars-true-po/ https://ember-energy.org/latest-insights/solar-electricity-e...
    - idiotsecant 11mo ago
      This is exactly wrong because transmission and distribution are different things. You can think of distribution as the 'last mile' infrastructure. It's not expensive in the way transmission is - individual services are relatively cheap. The reason it's expensive is that there are enormous amounts of it and municipal distribution systems can be wildly complex. Power flows in these systems are unidirectional. When you throw that assumption on its head you drastically change how these systems must be designed. A major change like that would be astronomically expensive. The only reason it kinda works now is that very few people do grid connected generation after the meter. Once that becomes more widespread it's time for a huge investment, on the order of what the transmission system needs, but it all has to be paid for by local utilities, very few of which can get the capital together to do major projects like that.
UltraSane 11mo ago
What will people do at night?
- peppersghost93 11mo ago
  overprovision for their needs during the day and utilize battery power at night.
  - UltraSane 11mo ago
    Solar panels are cheap but batteries are very expensive.
    - peppersghost93 11mo ago
      They can be depending on your needs. Lithium iron phosphate batteries are pretty cheap for their capacity. If you build your own power station with them you'd be surprised how far your money goes.
      - UltraSane 11mo ago
        It is much more expensive that just buying electricity from the grid at night.
        scheeseman486 11mo ago
        In Australia, if you have the space for rooftop solar, it's far cheaper in the long run to buy solar+battery. We did the math for our household and even if grid prices are stable (which they aren't, they're fast increasing) we're still going to make money back on the investment in less than 4 years. Granted this includes a government rebate for the battery, but overall the prices have plummeted. Any government that isn't pushing for renewables and energy storage at this point is actively working against it's citizens.
        11mo ago
_trampeltier 11mo ago
I think in most countrys, you already pay one bill for the grid and one for the used electric power.
- pfdietz 11mo ago
  The bill you pay for the grid in such cases typically doesn't cover the fixed costs, and would have to be much higher if solar demand destruction becomes big.
ghc 11mo ago
Commercial and industrial use already makes up a large portion of demand. While the model will change to cater less to residential needs, overall demand for stable, high voltage generation is not going to go down.
- jasonsb 11mo ago
  Commercial properties often have enough roof area to meet most of their daytime demand on-site. And industrial consumption in Western countries has been flat or declining for years, so "stable, high-voltage generation" may face less demand than assumed.
- pfdietz 11mo ago
  If long term storage (like Standard Thermal) comes into play, I could see industrial users decide to just decouple from the grid too (or, use the threat to do so as a means to drive down what they are charged.) We may see industrial users preposition themselves in locations with ample nearby PV potential. If I were building a factory in the US (or a data center) I would think twice before putting it in a higher population density area. We may also see local microgrids develop. This would still have distribution costs, but not transmission.
PunchyHamster 11mo ago
if the same solar also had enough battery capacity, sure. But they do not, they still need to buy at out of solar peak and that just causes problems for both sides. I think grid should start moving into selling storage as a service. Just put a bunch of bulk storage at every transformer station and buy solar from consumers at solar peak, sell them back say 80% of it (or whatever margin is required to pay for it) off peak. That way utility no longer have to haul megawatts all the way from the power plant all the time, any peak can be hauled from the batteries and let the other types of power plant more time to spool up, and the grid is more resilient to outages (assuming you were lucky and battery bank local to you still had some charge
- toomuchtodo 11mo ago
  LFP chemistries are approaching ~$50/kWh, and CATL's sodium chemistry is supposed to be ~$40/kWh (per CATL); soon it will be more expensive to ship the battery storage than the storage itself. "Watershed moment:" Big battery storage prices hit record low in China auction - https://news.ycombinator.com/item?id=44504630 https://news.ycombinator.com/item?id=44504630 - July 2025 (4 comments) IEA: The battery industry has entered a new phase - https://www.iea.org/commentaries/the-battery-industry-has-entered-a-new-phase https://www.iea.org/commentaries/the-battery-industry-has-en... - March 5th, 2025 Naxtra Battery Breakthrough & Dual-Power Architecture: CATL Pioneers the Multi-Power Era - https://www.catl.com/en/news/6401.html https://www.catl.com/en/news/6401.html - April 21st, 2025 China Already Makes as Many Batteries as the Entire World Wants - https://about.bnef.com/insights/clean-transport/china-already-makes-as-many-batteries-as-the-entire-world-wants/ https://about.bnef.com/insights/clean-transport/china-alread... - April 19th, 2024
  - kragen 11mo ago
    Currently "Sodium Battery Cell" is priced at US$50–70/kWh on the Shanghai Metals Market, which gives every appearance of being a real thing: https://www.metal.com/en/markets/43 https://www.metal.com/en/markets/43. They list LFP batteries currently at US$38–52/kWh: https://www.metal.com/en/markets/42 https://www.metal.com/en/markets/42 I think you may be dramatically overestimating how much container shipping costs.
triceratops 11mo ago
In most places in the developed world utility-scale solar is much cheaper to build than rooftop solar. And there's value in having a stable grid to fall back on. I think the demand destruction story is overrated.
- kragen 11mo ago
  Balcony solar is even cheaper to build than utility-scale solar.
  - triceratops 11mo ago
    It's limited to 800W in Germany and 1200W in Utah. It isn't about to replace utility-scale generation anytime soon.
    - rjdj377dhabsn 11mo ago
      Those limits are just arbitrary regulations. It's easy to install 10x that on a residential roof.
      - triceratops 11mo ago
        And we come back to my original point. Residential roof installation is the most expensive way to install solar power. Utility scale solar is easily haf the cost of residential.
        rstuart4133 11mo ago
        > Utility scale solar is easily half the cost of residential. If it's only half, the problem it's not going to stop residential installs. By the time that utility power gets to them here in Australia it costs about 3 times as much, so they are going to install their rooftop systems anyway. I can't speak for elsewhere, but here in Australia residential installs tend to be over provisioned. A small'ish install is 5kW. That generates about 20kWh per day. Typical household consumption is 1/2 that. Newer builds like mine tend to have far more - upwards of 20kW of panels. That's to cater for charging EV's. The result is grid solar installs are getting hammered by roof top solar: https://reneweconomy.com.au/wind-and-solar-hit-record-share-of-main-grid-as-curtailment-underscores-need-for-more-storage/ https://reneweconomy.com.au/wind-and-solar-hit-record-share-...
testing22321 11mo ago
> solar is increasingly threatening the electric utility business model The writing is on the wall that the electric utility business model is a dying business like the career of bus or truck driver. Some countries will take a while to realize due to head in the sand , tariffs and corruption.

by pfdietz 11mo ago

What this shows is solar is increasingly threatening the electric utility business model. Even without net metering, demand destruction will cause the traditional model to stop working.

thfuran 11mo ago

Will it? I’m not sure how the utilities structure their prices wrt the actual cost, but they definitely separate the baseline connection cost from usage on bills (at least in the US), so they may not be killed by people using very little power as long as the connection fee actually covers things.

kingstnap 11mo ago
The hardest possible demand to meet is random, reasonal, and spikey demand spread diffusely over a large area. Which is more or less homes. Conversely the easiest possible demand to meet is localized constant and high demand. Basically AI datacenters or industrial users. These guys are basically paying for the grid and residential have it as a subsidy. The supermajority of the price of electricity is fixed costs related to installing and maintaining capacity. The marginal problem of increasing generation or utilization is cheap. I believe it's like under 20% even for gas power where you have to buy gas. For grid solar it would be even crazier because marginally its basically free they really don't care how much you use it even goes negative but the fixed costs are everything. So what causes a lot of social problems is when wealthy people get their own private solar because the whole current pricing structure revolves around wealthy people using a lot of electricity and paying down the connection costs for poor people. If they have solar the poor people are fronting the maintainence cost which destabilizes everything.
- mjh2539 11mo ago
  Without load balancing, AI datacenters are very swingy (which is bad).
jaltekruse 11mo ago
Unfortunately the connection fee does not cover all fixed cost. For a long time the model has been fairly "progressive" in this regard. Some of the fixed costs of the grid have been paid for by amortization over the per Kw cost, which had the effect of charging people who used more a larger chunk of these fixed costs. Now with the option to provide your own power if you have upfront capital for solar can build as big of a system as they want. As other comments in the thread have mentioned, net-metering is largely functioned as a subsidy to give money to people who are already doing fine financially. I want green energy, and I think that decentralization has definite benefits, but it's pretty hard to argue against maintaining the grid to allow re-balancing and covering supply shortfalls in specific areas. Here is a video discussing this problem - https://youtu.be/C4cNnVK412U?si=ZzZhoApFW3khqrdq&t=720 https://youtu.be/C4cNnVK412U?si=ZzZhoApFW3khqrdq&t=720
- namibj 11mo ago
  What you could do is bill per energy in e.g. 15 minute chunks, and separately bill for transformer/line capacity by e.g. the peak usage in any such chunk over the contract period, like they do in Germany for atypical load profile industrial users since decades ago. Net metering is overall just entirely stupid as a concept; measure inbound and outbound flow separately if you can't just measure the 15 minute chunks; bill grid fees on the energy price on inbound and only pay energy price on outbound. Or even bill grid fees on outbound up to one of many available large substations, and thus handle the issue of demand across large distances making buildout of solar in a convenient but far away place not being disincentivized vs. more-demand-local buildout.

SoftTalker 11mo ago

Most people aren’t interested in being responsible for their own electrical generation. Especially with payback still being on the order of decades

seanmcdirmid 11mo ago
Most people don’t have the capital to be responsible for their own electricity generation, except the rich.
- andor 11mo ago
  It's really not expensive anymore. There's a Black Friday deal on amazon.de for an entry-level Anker Solix system with 4x500W panels and a 2.6 kWh battery. 1200 EUR. For those that don't have the cash, financing is available. Have you read this, about SunKing and SunCulture in Africa, recently posted on HN: https://climatedrift.substack.com/p/why-solarpunk-is-already-happening https://climatedrift.substack.com/p/why-solarpunk-is-already... Their smallest solar products are small lanterns. Simply having a pollution-free source of light is already a quality of life improvement for some people. One step up is to add a USB port to charge phones.
  - seanmcdirmid 11mo ago
    Oh I’m sure, Pakistan has alot of trade with China also so it’s probably cheaper than in the west. But it would still be expensive for the poorer Pakistanis, and would require some investment, they simply have less ability to do that than a richer middle class Pakistani, so the poor pay the poor tax because they can’t invest capital to bring their costs down. Low Chinese prices are making it more and more possible though. I hope the future will be really different.
    - pfdietz 11mo ago
      We're seeing solar with batteries going in in sub-Saharan Africa, so don't tell me something can't be made to work even with the poor in Pakistan.

more_corn 11mo ago

There’s a business model where distributed solar production and storage is the norm and central grid based generation and delivery is the minority. Such a model is extremely resistant and there’s less system infrastructure necessary. It’s quite feasible to redesign the system around a “distributed first” model.

idiotsecant 11mo ago
Where do the massive upgrades to the distribution system required for this kind of setup come from? We simultaneously hate utilities and want them to redesign and pay for a distribution system that was not intended for bidirectional load flow. Our municipal distribution systems are barely adequate. Net metering produces essentially no revenue but imposes a huge load on that infra.
- kieranmaine 11mo ago
  My understanding is there is less of a need for massive grid upgrades in this model due to the use of storage. Rather than having to be able to distribute peak loads from solar, requiring a larger connection, you can smooth out the supply and distribute an even amount throughout the day, using a smaller connection. The section "1.1.3 Bringing large savings on grid expansions" [1] has a good explanation. 1. https://ember-energy.org/latest-insights/solar-electricity-every-hour-of-every-day-is-here-and-it-changes-everything/chapter-1-how-batteries-will-unlock-solars-true-po/ https://ember-energy.org/latest-insights/solar-electricity-e...
  - idiotsecant 11mo ago
    This is exactly wrong because transmission and distribution are different things. You can think of distribution as the 'last mile' infrastructure. It's not expensive in the way transmission is - individual services are relatively cheap. The reason it's expensive is that there are enormous amounts of it and municipal distribution systems can be wildly complex. Power flows in these systems are unidirectional. When you throw that assumption on its head you drastically change how these systems must be designed. A major change like that would be astronomically expensive. The only reason it kinda works now is that very few people do grid connected generation after the meter. Once that becomes more widespread it's time for a huge investment, on the order of what the transmission system needs, but it all has to be paid for by local utilities, very few of which can get the capital together to do major projects like that.

UltraSane 11mo ago

What will people do at night?

peppersghost93 11mo ago
overprovision for their needs during the day and utilize battery power at night.
- UltraSane 11mo ago
  Solar panels are cheap but batteries are very expensive.
  - peppersghost93 11mo ago
    They can be depending on your needs. Lithium iron phosphate batteries are pretty cheap for their capacity. If you build your own power station with them you'd be surprised how far your money goes.
    - UltraSane 11mo ago
      It is much more expensive that just buying electricity from the grid at night.
      - scheeseman486 11mo ago
        In Australia, if you have the space for rooftop solar, it's far cheaper in the long run to buy solar+battery. We did the math for our household and even if grid prices are stable (which they aren't, they're fast increasing) we're still going to make money back on the investment in less than 4 years. Granted this includes a government rebate for the battery, but overall the prices have plummeted. Any government that isn't pushing for renewables and energy storage at this point is actively working against it's citizens.
        11mo ago

_trampeltier 11mo ago

I think in most countrys, you already pay one bill for the grid and one for the used electric power.

pfdietz 11mo ago
The bill you pay for the grid in such cases typically doesn't cover the fixed costs, and would have to be much higher if solar demand destruction becomes big.

ghc 11mo ago

Commercial and industrial use already makes up a large portion of demand. While the model will change to cater less to residential needs, overall demand for stable, high voltage generation is not going to go down.

jasonsb 11mo ago
Commercial properties often have enough roof area to meet most of their daytime demand on-site. And industrial consumption in Western countries has been flat or declining for years, so "stable, high-voltage generation" may face less demand than assumed.
pfdietz 11mo ago
If long term storage (like Standard Thermal) comes into play, I could see industrial users decide to just decouple from the grid too (or, use the threat to do so as a means to drive down what they are charged.) We may see industrial users preposition themselves in locations with ample nearby PV potential. If I were building a factory in the US (or a data center) I would think twice before putting it in a higher population density area. We may also see local microgrids develop. This would still have distribution costs, but not transmission.

PunchyHamster 11mo ago

if the same solar also had enough battery capacity, sure. But they do not, they still need to buy at out of solar peak and that just causes problems for both sides. I think grid should start moving into selling storage as a service. Just put a bunch of bulk storage at every transformer station and buy solar from consumers at solar peak, sell them back say 80% of it (or whatever margin is required to pay for it) off peak. That way utility no longer have to haul megawatts all the way from the power plant all the time, any peak can be hauled from the batteries and let the other types of power plant more time to spool up, and the grid is more resilient to outages (assuming you were lucky and battery bank local to you still had some charge

toomuchtodo 11mo ago
LFP chemistries are approaching ~$50/kWh, and CATL's sodium chemistry is supposed to be ~$40/kWh (per CATL); soon it will be more expensive to ship the battery storage than the storage itself. "Watershed moment:" Big battery storage prices hit record low in China auction - https://news.ycombinator.com/item?id=44504630 https://news.ycombinator.com/item?id=44504630 - July 2025 (4 comments) IEA: The battery industry has entered a new phase - https://www.iea.org/commentaries/the-battery-industry-has-entered-a-new-phase https://www.iea.org/commentaries/the-battery-industry-has-en... - March 5th, 2025 Naxtra Battery Breakthrough & Dual-Power Architecture: CATL Pioneers the Multi-Power Era - https://www.catl.com/en/news/6401.html https://www.catl.com/en/news/6401.html - April 21st, 2025 China Already Makes as Many Batteries as the Entire World Wants - https://about.bnef.com/insights/clean-transport/china-already-makes-as-many-batteries-as-the-entire-world-wants/ https://about.bnef.com/insights/clean-transport/china-alread... - April 19th, 2024
- kragen 11mo ago
  Currently "Sodium Battery Cell" is priced at US$50–70/kWh on the Shanghai Metals Market, which gives every appearance of being a real thing: https://www.metal.com/en/markets/43 https://www.metal.com/en/markets/43. They list LFP batteries currently at US$38–52/kWh: https://www.metal.com/en/markets/42 https://www.metal.com/en/markets/42 I think you may be dramatically overestimating how much container shipping costs.

triceratops 11mo ago

In most places in the developed world utility-scale solar is much cheaper to build than rooftop solar. And there's value in having a stable grid to fall back on. I think the demand destruction story is overrated.

kragen 11mo ago
Balcony solar is even cheaper to build than utility-scale solar.
- triceratops 11mo ago
  It's limited to 800W in Germany and 1200W in Utah. It isn't about to replace utility-scale generation anytime soon.
  - rjdj377dhabsn 11mo ago
    Those limits are just arbitrary regulations. It's easy to install 10x that on a residential roof.
    - triceratops 11mo ago
      And we come back to my original point. Residential roof installation is the most expensive way to install solar power. Utility scale solar is easily haf the cost of residential.
      - rstuart4133 11mo ago
        > Utility scale solar is easily half the cost of residential. If it's only half, the problem it's not going to stop residential installs. By the time that utility power gets to them here in Australia it costs about 3 times as much, so they are going to install their rooftop systems anyway. I can't speak for elsewhere, but here in Australia residential installs tend to be over provisioned. A small'ish install is 5kW. That generates about 20kWh per day. Typical household consumption is 1/2 that. Newer builds like mine tend to have far more - upwards of 20kW of panels. That's to cater for charging EV's. The result is grid solar installs are getting hammered by roof top solar: https://reneweconomy.com.au/wind-and-solar-hit-record-share-of-main-grid-as-curtailment-underscores-need-for-more-storage/ https://reneweconomy.com.au/wind-and-solar-hit-record-share-...

testing22321 11mo ago

> solar is increasingly threatening the electric utility business model The writing is on the wall that the electric utility business model is a dying business like the career of bus or truck driver. Some countries will take a while to realize due to head in the sand , tariffs and corruption.