Rate-design wars are the sound of utilities taking residential PV seriously

http://blogs.berkeley.edu/2013/11/12/rate-design-wars-are-the-sound-of-utilities-taking-residential-pv-seriously/

by MaysonL • 13 years ago

42 26 13 years ago

blogs.berkeley.edu

hohead2• 13 years ago

Hawaii gives us a glimpse of the future of what solar will look like in the US. They are the hottest solar market in the US due to having the highest electricity rates combined with excellent conditions for solar. The primary utility in Hawaii (HECO), has started denying many permits to homeowners due to grid saturation on many circuits.

Infrastructure investments must now be done by HECO to allow for increased solar adoption - something that may not be in the best interest for the utility.

thuuuomas• 13 years ago

I'm uninformed, "grid saturation" meaning what?

simcop2387• 13 years ago

I'm not positive, but I might imagine that it's that the solar power generated by that particular grid either equals or exceeds the amount used by it. If there's multiple grids it could be that the residential area is nearly self sustaining during the day, and they don't have the capability to move that generation successfully to the other places that need it because the grid interchanges weren't built with that in mind.

toomuchtodo3• 13 years ago

Can you simply disconnect from HECO and self-generate?

hohead2• 13 years ago

You could, but you would need to purchase and setup batteries.

ChuckMcM• 13 years ago

Interesting, it is getting more "real" to the utilities. It should also be shifting the transmission load around, I don't know if that helps or hurts.

Brakenshire• 13 years ago

What makes the policy debate so difficult to resolve is that tariff design is a very indirect way to support residential PV. In Germany, they’ve gone with feed-in tariffs for solar PV instead – a direct subsidy for every kWh of energy coming from your PV system. Much simpler, and allows a reasoned debate on tariff design apart from solar PV policy.

I'm fairly confident this section about Germany is wrong - Germany has feed in tariffs which operate in addition to net metering, not as an alternative. That is certainly the case in the UK, whose system was modelled on Germany's.

Still, the basic point of this post is correct, net metering is an indirect subsidy, but there is an obvious technical solution: using the article's metaphor, to encourage people to eat their own zucchinis, or to use the solar energy on-site rather than automatically exporting it to the grid.

At present, PV systems export generated electricity directly to the grid, separately from the grid-connection used to bring in electricity which is consumed on-site, all of which is imported. Solar could fulfil normal electricity demand, and also be used to charge up storage heaters, or storage a.c. To the utilities, the house would look like any other, except with lower electricity demand.

sehugg• 13 years ago

Sure, PV exports to "the grid", but practically speaking you are reducing the power requirements for your local area. Since peak demand to the area is lessened, utilities get to defer infrastructure upgrades, thus saving money.

toomuchtodo3• 13 years ago

Until there is enough renewable generation that you're actually reducing or eliminating their profits on the fixed-cost of generating equipment they have in play.

I think that's the concern. It was all, "Ha ha look at solar, how cute and expensive." Now its more, "Its going to eat our lunch." and its only getting cheaper year by year.

moocowduckquack2• 13 years ago

Dig a 15 meter pit 5 meters across and suspend a 5 meter cube of ferro-concrete on a cable feeding onto a drum above it connected to a gearbox and motor/generator. Attach this to your PV and then relax.

csense• 13 years ago

Google says density of concrete is 2400 kg / m^3. Multiply that by 5x5x5 m^3 and you have 300,000 kg of concrete (300 metric tons).

   m = 300000 kg
   g = 9.8 m/s^2
   h = 10 m

The total amount of potential energy you can store is:

   m * g * h = 29400000 J = 29.4 MJ

The more customary unit of energy in electric circles is the kW hr. Converting a kW hr to joules gives:

   1 kW hr = 1 kJ hr / s
           = 1000 J hr / s * (60 s / min) * (60 min / hr)
           = 3600000 J
           = 3.6 MJ

So the potential energy stored in the parent's system is:

   29.4 MJ * (kW hr / 3.6 MJ) ~ 8.17 kW hr.

Probably needs to be bigger to supply a decent sized household. Not to mention issues with inefficient conversion of potential energy to electricity, maintenance, and a backup plan for cloudy days.

moocowduckquack2• 13 years ago

Thanks for that, I thought it would give around a couple of days of backup, however I had completely fudged the numbers somewhere along the line.

URSpider945• 13 years ago

I don't have time to look for the cite now, but I've read a proposal to build electric traction railways up some steep slopes in SoCal, then load up cars of rocks, mine tailings, slag, etc. The trains would head up the mountain at night when electricity is in surplus, then back down in the daytime when demand is near peak.

Seems outlandish, but the calculations predicted very high efficiency and comparatively low cost per MWh of storage.

lsc2• 13 years ago

Hilarious.

"they want to further reduce the incremental energy price by implementing a fixed monthly charge on each customer, aimed at covering some of the costs of retail distribution, metering and billing."

That's straight out of the 1975 hippie classic "Ecotopia: The Notebooks and Reports of William Weston" - and is one of the Casus belli California cited when seceding from the union in that book.

rbaud• 13 years ago

Thanks for sharing this book...and the Latin!

Links for both below if anyone else is interested:

http://en.wikipedia.org/wiki/Ecotopia

http://en.wikipedia.org/wiki/Casus_belli

jonah• 13 years ago

I keep getting notes from SoCal Edison with each bill wanting to tack on fees for every little thing. New distribution lines, cleaning up their nuclear mess at San Onofre. In other businesses those are costs of doing business and are factored into their balance sheet rather than getting directly passed on to the customer.

lsc2• 13 years ago

Just so long as you don't start setting up artillery on the sierra nevadas.

danielharan• 13 years ago

Higher fixed monthly charges will only delay the inevitable. In places like Hawaii, it could actually speed it up.

Suppose you were a homeowner with solar panels installed. Right now, you're not paying very little because of net metering. Two years from now, the utility decides you'll need to pay monthly for grid connection.

It might then make sense to just cut the grid connection. Adding panels and batteries is the obvious choice, along with upgrading appliances with more energy efficient ones. Batteries are expensive, though they could be in your electric car.

One step further, if neighbourhoods or condo associations organize in micro-grids, big utilities are again stranded with useless assets.

tanzam75• 13 years ago

Batteries are very expensive.

It costs $10,000 to buy a battery system large enough to carry your whole house. And you're cycling the batteries every day, so you'd be lucky to get 10 years use out of them.

Even with the higher fixed charges mentioned in the article, it is still cheaper to connect to the grid than to buy the batteries.

EEGuy2• 13 years ago

The IBP (tiered rating) isn't a birthright of utilities, geez. It's a conservation measure!

Whether I shave off my higher-tiered consumption by changing my thermostat, changing my lighting or by putting in solar, that lost high-profit consumption isn't the company's property, it's mine to do something else with.

URSpider945• 13 years ago

I don't think most utilities have a beef with shaving off high-tier consumption (well, I'm sure they miss the revenue, but they are not stupid enough to go back on years of telling their customers to conserve).

Their bigger concern is net metering, by which I can sell them solar power during peak hours at their retail rate of, say, $0.45/kWh and then buy it back from them at, say, $0.06/kWh at night, or maybe even 6 months later in the dead of winter.

Not paying for power you didn't use is one thing, but using the power company's own transmission network to arbitrage its rates with no fee does seem long-term unsustainable. If the current rates reached their ultimate conclusion, the power companies would have to make massive, massive investments in storage systems capable of buffering months worth of demand, as their net revenues trend towards $0.

EEGuy2• 13 years ago

I am a net-metering solar PV owner who's not averse to a reasonable, independently audited "connection charge".

But I would be adverse to having to pay via a "connection charge" for what looks to me like a failed uprating of a nuclear plant, if I were I a Southern California Edison customer.

URSpider945• 13 years ago

I can understand why people are hostile towards utilities for trying to change their pricing. However, keep in mind that utilities are some of the most regulated private companies in our economy. Their rates have to be approved by the government. They are allowed to make a profit, but not a big one. If they start making losses, then the lights are going to go out ...

For those who have suggested going off the grid, keep in mind that even in sunny California, we do have a rainy season. I've reviewed my friends' electric bills with them, and even those with quite large PV installations are still net consumers through most of the winter. To make it through, you'd likely need a generator (dirty, loud, expensive).

I think the bigger issue here is that people have made long-term commitments (20 year lease agreements) to finance solar installations, counting on net metering and a continual increase in power rates. If the utilities change the game, you're going to screw over a lot of fairly well-off consumers (vs. the mean), which doesn't usually go over well.

Rate-design wars are the sound of utilities taking residential PV seriously

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