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Should Solar PV owner be able to profit off selling excess power?

Discussion in 'Energy, Environment, and Policy' started by nwdiver, Nov 17, 2014.

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Should Residential PV owners be able to make a profit?

  1. Yes

    61 vote(s)
    87.1%
  2. No

    9 vote(s)
    12.9%
  1. nwdiver

    nwdiver Active Member

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    #1 nwdiver, Nov 17, 2014
    Last edited: Nov 17, 2014
    So... here's an article I found mildly disturbing... some segments of the PV industry seem to think that if you're tied to the grid you should ALWAYS have a utility bill REGARDLESS of how much excess power you generate.... Call me crazy but I think if I export 2x more energy than I import I should get a small check...

    Obviously net-metering won't work indefinitely; someone needs to pay to maintain the lines but I don't think it's unreasonable to say... pay $0.02/kWh for exports while charging $0.10/kWh for imports so if you produce enough you can make a profit... thoughts?

    http://www.pvsolarreport.com/minimum-bill-first-step-to-fair-utility-rates/
     
  2. bollar

    bollar Disgruntled Member

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    I pay $12 for a distributed generation charge on top of the $15 customer fee. I must be in the minority, but I think $12 is a great deal for basically unlimited battery backup. I import & export at the same rate (9.6 cents / kWh), so most months, my bill is $23 plus sales tax.
     
  3. mdemetri

    mdemetri Member

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    This has been going on for a while and it is the Utilities way of trying to recoup their lost revenue from declining numbers of captive customers. The usual argument is that because home solar is using the Grid, we need to pay for its upkeep. The question I always ask is if large energy suppliers do not have to pay a minimum fee for Grid upkeep, why does the small energy supplier need to? I have yet to get a good answer.

    The best counter-point is that I am providing energy at peak demand, where they can sell it at the highest profit. Even though I buy energy back at night (with a cheaper retail rate) to charge my Model S using net metering, the bottom line is I am still subsidizing the Utility by providing highly profitable energy and using much cheaper energy. This difference should be more than enough to pay for the Grid upkeep, just like the added profit when buying wholesale from large energy suppliers. This is especially true if one is over-generating.

    Once stationary storage with Tesla batteries becomes viable, the Utilities are in deep deep trouble. I would rather pay more for stationary storage and go completely off grid before paying a fixed monthly fee for for Grid upkeep.
     
  4. green1

    green1 Active Member

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    This is pretty obvious... if a coal fired power plant generates more electricity than it uses, should they be able to make a profit selling it to the grid? or should they always have to pay a power bill?

    When you put it that way the absurdity of the situation becomes obvious. a PV user who generates more than they use is a generator, as well as a consumer, they should get charged for their use, and paid for their generation.

    Net-metering is a good plan as long as it works, and as long as PV is always so small a percentage that it's generating less power than the grid needs, it should be allowed due to all the other societal benefits. If net-metering really is not an option, then PV owners should be paid the wholesale rate of generation at the time the electricity is being exported just like any other power producer (around here, the daytime average wholesale power cost is actually higher than the retail rate I pay for electricity, it works because I use more power in the evening when the rates are less, but if I had solar panels I'd be creating electricity when demand is highest, and when the wholesale price is highest. (we also don't have time of use metering))

    Of course this mindset by many utility companies is exactly why we need cost effective on-site power storage (Tesla batteries anyone?) Not because it's better for society (it most certainly is not) but because for each individual who can go off-grid completely, they won't have to deal with those ridiculous corporations any more.
     
  5. Robert.Boston

    Robert.Boston Model S VIN P01536

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    You should always receive a bill--but it might be a credit. There should be a sharp line between paying for the wires infrastructure and the power.

    Power plant owners have established solid precedent here. Power plants don't necessarily operate 24/7. When they don't run, they still use power for lights, control panels, etc. This usage is called "station power." In most states, station power is net-metered within the month, I.e. Usage is netted off generation within the billing month. Obviously, injections of power above usage are paid for. Net of these power charges, generators pay for the capital cost of their interconnection.

    This could all be very simple for retail customers. Charge us $50 per month per 100A of service panel capacity, for the wires and generation capacity charges. Charge us the hourly price of power, or credit us the hourly price if we have a net injection. Collecting wires charges on a kWh basis is just silly.
     
  6. dhrivnak

    dhrivnak Active Member

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    I voted no as I think we do need to pay something for the grid. So my utility allows me to offset 100% of my usage but no more. I think this is fair as unless we want to be a producer and be held to service level agreements, I think it fair we are capped at 100%. If not then we will have the poor subsidize the rich as they pay us for our excess power and the power plants to be on standby for cloudy days.
     
  7. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    Homeowners should only have the right to make a profit on solar PV when the utility has the right to refuse their electricity and the homeowners get real-time pricing.
     
  8. EVSteve

    EVSteve 110% Solar Powered

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    Instead of paying out my stance has always been unlimited net-metering. No cash payout at rate changes or on a yearly basis just an unlimited bank. This keeps anyone from installing massive amounts of solar on their homes creating the need for huge infrastructure upgrades to handle the excess generation while still being fair to homeowners. It's a self regulating setup. While admirable that someone would install more solar than they need, effectively powering their neighbors homes with renewables, long term it creates a power issue especially when those homes suddenly decide to also install solar. A flat rate interconnect fee is acceptable but should be across the board not isolated to those with on-site generation as has been done by some utilities.

    The thought process must be long term. As solar installations expand having thousands of homes suddenly pushing massive amounts of power into a grid with nowhere to go is disastrous. I've seen first hand what happens in these cases as our array overwhelmed the pole transformer feeding our home and a few others. Power NEEDS to be stored or used as it is produced. Failing to do so causes voltage to rise and eventual damage to components. At the same time cloudy days or winter months must have the infrastructure on standby to fill the holes created. Undercutting utilities by having them payout large sums to residential producers instead of investing that capital into infrastructure improvements only encourages more overkill residential installations which will exacerbate the problem.

    - - - Updated - - -

    Exactly. I think a lot of people don't really understand the complexities of the power generation system, how power is bought & sold. They picture a meter on a power station and a utility paying that power station a kWh rate that rarely changes. They want to be treated like the big generation plants without fully understanding how they operate.
     
  9. nwdiver

    nwdiver Active Member

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    #9 nwdiver, Nov 19, 2014
    Last edited: Nov 19, 2014
    Wow... that's harsh... so ~17% of respondents think Residential PV owners shouldn't be fairly compensated for value added... Even if they install batteries to make power available when it's needed; Even if they participate in a demand response program... I suppose I should have added more qualifiers...

    That is part of the equation; 'Value added' that value is obviously going to evolve over time. The value of energy you export when you're the only guy in the neighborhood exporting is significantly higher than when EVERYONE is exporting. Indeed, energy exported at noon on a sunny day may soon have a NEGATIVE value. So the only way for a PV owner to get paid for power in the future would be to store it during the day and export it at night. Pairing a 4kWh battery pack with solar PV is already becoming common in Germany and I know most people on this forum have seen this...

    solarcityx299_0.jpg

    If Solar PV penetrates far enough perhaps there will even come a time that someone WITHOUT solar panels (due to trees or an urban environment) can use the grid for 'free' by installing a 40kWh pack and assisting in shifting power from day to night.... all kinds of ways to add value.

    Yes, parts of the grid are very complicated and convoluted especially when you start getting into wholesale pricing. But, the objective is rather simple; Maintain 60Hz. Grid Frequency is an excellent indicator of grid health and could be used as a pricing signal and for demand response. Here's a study by BPA on the viability of 'Grid Friendly' devices that switch off when frequency dips.

    http://www.pnl.gov/main/publications/external/technical_reports/PNNL-17079.pdf

    The main objective PUCs MUST work to avoid is allowing price structures to make it economically advantageous to go off-grid. For various reasons not everyone is going to install solar so those than can install more should be encouraged to install more.

    Utilities need to accept the fact that generation is going to be a smaller and smaller part of their business. That doesn't mean they can't be profitable. Just gotta buy low, sell high and charge a toll for every kWh that uses their lines.... and create a pricing environment to encourage conservation when energy is scarce and storage/consumption when it's abundant.
     
  10. Robert.Boston

    Robert.Boston Model S VIN P01536

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    #10 Robert.Boston, Nov 19, 2014
    Last edited: Nov 19, 2014
    I completely agree. Injections and withdrawals of power should simply be priced at the wholesale market price, possibly allowing the utility a margin (i.e. pay you less for injections or charge you more for withdrawals) to cover scheduling costs, etc. Then there should be a charge based on your interconnection to cover the other costs (distribution, transmission, etc.). As you note, the wholesale price can go negative, so you would have to pay to push power out to the system at such times (or get paid to consume more). In such circumstances having storage would be very valuable, as well as grid-aware devices. Super-chilling your chest freezer when power is cheap/free is a very simple wave of 'storing' electricity, commonly used by commercial fish-freezing operations here in New England; when power gets costly, you can then let the temperature coast back up. Your frozen turkey is way cheaper at energy storage than LiIon batteries!

    I'm not sure if you saw, but Southern California Edison recently accepted an offer of 85 MW of distributed storage. So it's already becoming a reality that a utility will pay you to have storage in your cellar, whether or not you have solar panels.

    The electric utilities serving most of the U.S. population are already out of the generation business. I'm guessing from your handle that you live in OR or WA, which never restructured their utility business (thanks in large part to the gorilla-in-the-room Bonneville Power Administration, which blocked every attempt to set up a northwest power pool with independent operational control; such an operator is really a prerequisite to proper restructuring). However in California, Texas, and the east coast from New England to DC, nearly all of the states required that investor-owned utilities sell their generation or move it out of the regulated utility. So, for example, Southern California Edison makes no profit on the power they wheel to their customers (aside from some relatively minor sales from its 1,200 MW of hydro). Its profit is entirely from providing the distribution service.

    I think the utilities are putting the brakes on solar adoption not out of greed but fear. Thomas Edison created a power system with central-station generation, feeding thick transmission wires connecting to thin distribution wires, to 'dumb' customers. It's like the old IBM mainframe systems, with terminals everywhere. Fundamentally Edison's network was still in place without meaningful change until this past decade. The utilities are having a really hard time figuring out what to do with the newly developing equivalent of distributed computing.
     
  11. omgwtfbyobbq

    omgwtfbyobbq Member

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    Is $50/month at cost for transmission/generation capacity? That seems like an awful lot.
     
  12. Robert.Boston

    Robert.Boston Model S VIN P01536

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    In round numbers, yes, $50/month for a residential property seems about right. Remember you're paying not only for the capital costs of your distribution wires, but also your pro rata share of the transmission system, as well as all the employees who keep the system running.
     
  13. dhrivnak

    dhrivnak Active Member

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    You must live in an area with very high cost power as my average bill before solar was only $85/month. So that means I only paid $.035/KWh for power.
     
  14. omgwtfbyobbq

    omgwtfbyobbq Member

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    That's substantial. Given the EIA's figures for average electricity prices and household energy use, distribution/transmission/labor account for nearly half of electricity costs.
     
  15. Robert.Boston

    Robert.Boston Model S VIN P01536

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    On a cost basis, $0.035/kWh is about right for power in many parts of the country. That's about the cost of a gas-fired combined cycle or a good coal plant.
     
  16. Lloyd

    Lloyd Active Member

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    My Dental office uses about 5,500 Kwh per month at an average of $0.27 per Kwh. My average bill is about $1500 per month here in California!
     
  17. macpacheco

    macpacheco Member

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    #17 macpacheco, Nov 28, 2014
    Last edited: Nov 28, 2014
    Except perhaps for Hawaii, USA states still have too little solar PV customers to change the cost system fundamentals.
    But I look forward to 2020-2025 when putting a solar PV system will be absolutely a no brainer, even without any subsidies. And should FITs go away solar PV will still make sense using Li Ion battery storage, and that battery storage will also be economical for purchasing power in ultra low peak prices during winter to make up for solar PV shortfalls.
    In my Brazil we just got FITs 2 years ago, and the vast majority of our population with purchase power to even think about solar PV live in tall buildings, too little roof space if even half of the neighbors decide to go PV. I'm lucky enough to live in a 5 apt building, with plenty of roof space, should be displacing my 7000 kWh / yr demand pretty soon. FITs here can only go as far as zeroing out your electric bill, you can never get a check back from the utility, any overproduction become credits that have a 36 month expiration limit. However they can be transfered to other electric bills with the same user in the same utility, for instance the city property and the beach (or farm) property can share a single PV system to offset both bills.
    Wish we could just install a large PV system in coop for the whole building tie it to the shared building grid and distribute the credits evenly for all owners.
    And instead of having solar purchase subsidies, we have a total 110% import tax on solar equipment. A 3kW kit here costs close to the price it costs for a 10kW system in the USA !
    But Brazil is sunny, very sunny, so it offsets that substantially. In my Vitoria-ES we get an yearly average of 6.5 hrs / day worth or 2372 kWh from a 1kW system.
     
  18. tezco

    tezco Sig P85

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    Our utility wants to cut net metering by 50% ("PV energy comes in at the wrong time and stresses the system") yet they are building huge PV arrays and want to sell that electricity at 150% of retail rates because "it's green". Translation: "We're afraid of losing our monopoly to rooftop solar, so we are going to price it out of existence."
     
  19. nwdiver

    nwdiver Active Member

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    Texas is somewhat onto a solution to this issue... Generation is owned by company A, Transmission is owned by company B and Distribution/Sales is owned by a third company. This allows Residential PV owners to 'compete' with generators to some extent. One unfortunate side effect is that it has become a challenge to build new generation since the old way if raising rates pre-emptively to fund a new plant no longer works. Pick your poison I guess...
     
  20. tezco

    tezco Sig P85

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    #20 tezco, Nov 29, 2014
    Last edited: Nov 29, 2014
    We pay a monthly fee for transmission costs (which is set by our PUC) which is around $15 per month for residences (which seems reasonable to me). There is also an additional transmission adjustment fee that varies with your total useage. Robert's $50 per month seems a bit high--that would represent 50% or more of my monthly bill before solar. Our residential solar is limited to 120% of our annual average before solar, so I almost never produce more than what my old incoming peak draw was before solar. So, there isn't any need to upsize transmission equipment for residential solar in our area.

    We solar folks are currently getting the benefit of generating power at the same reimbursement (ie profit) as the power company. Since we pay for transmission separately, why should we be paid less since we put up our monies up front to build our generating capacity just like the big guys? Obviously the main concern of the shareholders of our power company is erosion of their generating monopoly. Unfortunately, our PUC is made up of industry insiders who tend to vote favorably for the company. I invested a hefty sum assuming that net metering would remain in force. If it is reduced to the wholesale cost of power produntion (the current proposal made by Xcel to the PUC), my system won't achieve payback in my lifetime.
     

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