When prices dip below $0 the electricity generators have to pay to put power on the grid. Many choose to just put their generators on standby mode to avoid the

When prices dip below $0 the electricity generators have to pay to put power on the grid. Many choose to just put their generators on standby mode to avoid these costs or "maintain output by offering to pay wholesale buyers to take their electricity"[0] As more wind and solar comes online these events will occur more often and for longer periods. "Old" operators are less willing to ramp up and down production as these negative pricing scenarios increase from 5 minutes per day to 60 minutes to 240 minutes. As the costs to develop solar decrease and as economies of scale increase, the acceleration of this effect will only increase. This is great for renewables and for storage companies who are willing to play this game. As solar becomes cheaper (say sub $2/watt) operators will be more willing to pay out during increasingly longer negative pricing scenarios (and internalizing it into their operating budget). These storage companies will be buying kWh at -$0.02 and then selling them back to the grid at $0.05/kWh at night undercutting fossil fuel operators (accelerating the process even more) and bringing in the equivalent of $0.07/kWh. As the cost of solar goes from $3/watt to $2/w to $1/w the price storage companies will be "buying" their electricity will only get better and profits only increase. I personally think that we will be plugging our houses into our battery packed cars at night to keep the lights on and get paid to take kWh off the grid during peak hours. [0] http://www.eia.gov/todayinenergy/detail.cfm?id=6730 http://www.eia.gov/todayinenergy/detail.cfm?id=6730 (as @rwcarlsen pointed out)