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

[Ampster]

.......
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.
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In California SCE has Virtual Net Metering that allows contiguous users to share a Solar array. I am applying to do that for 3 buildings I own. I can also share some of that with tenants. As commercial buildings they are already on TOU rates required by SCE. Most of my usage is night lighting so I will be generating at high rates and buying back at low rates.

 

[dhanson865]

My average electric bill is below $100, I often see $75. There needs to be incentive or neutrality to me reducing consumption.

I already have a minimum service charge of $14 meaning as I reduce my electrical consumption my net cost per kwh increases.

My average consumption is below 1000 kwh per month. I expect to both add EVs to the household and add solar PV, I'll probably still be a net consumer of electricity after both.

I find it hard to believe that $14 a month isn't already covering cost of transmission/etcetera and that if I somehow add a couple of panels to my roof it will double or triple the cost for the utility to provide me with the same power.

I'm fine with them charging a distribution fee for >10KW systems. But I think small scale solar should be exempt or have a much lower charge.

 

[nwdiver]

Anyone using this yet?

https://www.ohmconnect.com

You can get paid by the utility without even producing ANYTHING...

 

[CalDreamin]

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.

A $50/month fixed cost for residential electricity customers seems too high for a region where the average residential electric bill is $80/month. Pacific Gas & Electric residential users average about 500 kWh per month, far less than the average U.S. residential usage of 900 kWh per month. A $50 fixed monthly electrical cost for PG&E customers would be 10 cents per kWh for the distribution, transmission, and related operational costs. That leaves only $30/month for generation costs, or 6 cents per kWh. Since PG&E residential customers use less electricity than the average U.S. home, the transmission and distribution system doesn't require the same load carrying capacity. Seems like infrastructure costs should be lower per residential user since we don't use as much.

 

[neroden]

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.

This seems much too high. I know distribution is a bit over half of the cost of electricity, but this is frankly way more than I pay for distribution, and NY State is supposedly NOT cross-subsidizing distribution out of power costs.

FWIW, the natural gas (methane) infrastructure has *much* more expensive distribution. Electrical distribution is very cheap to maintain by comparison to pressurized pipes.

Maybe you're using an average which includes expensive-distribution outlying rural locations as well as cheaper-distribution compact urban locations? A lot of the outlying areas should probably go off the grid.

 

[Robert.Boston]

This seems much too high. I know distribution is a bit over half of the cost of electricity, but this is frankly way more than I pay for distribution, and NY State is supposedly NOT cross-subsidizing distribution out of power costs.

FWIW, the natural gas (methane) infrastructure has *much* more expensive distribution. Electrical distribution is very cheap to maintain by comparison to pressurized pipes.

Maybe you're using an average which includes expensive-distribution outlying rural locations as well as cheaper-distribution compact urban locations? A lot of the outlying areas should probably go off the grid.

By "in round numbers" I mean that the right figure is probably north of $30 and south of $70. It obviously depends a lot on local conditions. I was mostly thinking about systems with massive amounts of underground wires (e.g. NYC) that are 4x - 10x more expensive to install than overheads. But I completely agree with @neroden and @CalDreamin that the actual wires charge should be determined by the facts of each utility's particular cost structure.

By the by, all residential customers in every utility I've given close attention to are cross-subsidized by small to medium commercial. There is an intrinsic arbitrariness to how a utility allocates fixed costs, and the political reality of rate cases drives utilities to allocate more of these fixed costs to the parties that squeak least. Residential customers are the primary focus of the "ratepayer advocate," often a lawyer from the state's Attorney General's office; big businesses have enough at stake to send their own lawyers/lobbyists/trade associations in to fight.

Anyway, I wander from the topic. The exact figure isn't really important, but the principle is: grid-connected customers should be paying their fair share towards covering the costs of building, maintaining, and operating the grid. I support net metering -- if and only if the price of power is set equal to the spot price in the wholesale market, both going into your house and coming out. Then there needs to be a lot of careful thought about how to assign the rest of the grid costs. These costs are currently assigned to residential customers by their kWh usage, which was never a good metric and is made worse by distributed generation.

In this model, you can make a profit from your solar array by selling lots of power at times with high prices (daytime peaks) and buying it back when it's cheap (overnight). As more and more people install solar, though, the daytime prices will drop and evening prices will rise, making it less profitable for yet more people to install solar. This market effect will create an equilibrium point at which no more solar is installed because it's no longer economic.

I go back to my favorite metaphor: when you drive across a toll bridge, you don't get that toll rebated when you drive back across. Why then should your infrastructure charges on your power bill be reduced when you "drive power" back across?

 

[wycolo]

> 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 Grid upkeep. [mdemitri]

> 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. [green1]

> those that can install more should be encouraged to install more. [nwdiver]

If I am going to foot the bill for an oversized solar install + Tesla battery backup then I am going to want this to be off grid. No need to constantly follow the ins and outs of grid economics, no need to follow the small producer requirements that are subject to political whims. Amortizing the battery investment is enough of a challenge. And backing up the battery would be petrol for cars and generators and also firewood for heat and hot water. The wild card here will be getting the Tesla Battery to function as long as possible.
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[dhrivnak]

If I am going to foot the bill for an oversized solar install + Tesla battery backup then I am going to want this to be off grid. No need to constantly follow the ins and outs of grid economics, no need to follow the small producer requirements that are subject to political whims. Amortizing the battery investment is enough of a challenge. And backing up the battery would be petrol for cars and generators and also firewood for heat and hot water. The wild card here will be getting the Tesla Battery to function as long as possible.
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Wycolo do you have solar? IF so have you really looked close at your usage? In our part of the country we have long stretches of deep clouds in the winter. So last winter I ran a 1500 KWh deficit over 3 months. Now I made that back over the next 9 months. But a 1500KWh battery is some serious money and space. Yes one can add solar panels but my system which will easily generate over 40KWh in the spring (when I use about 10 a day) has only average 2 KWh a day the past few days when I am now burning 40 KWh/day as I need to heat the home. On a cold snowy day I can run a 60 KWh deficit and it is common to get several of those days in a row. Yes batteries can help but most people have along way to go before they can cut from the grid.

 

[nwdiver]

Wycolo do you have solar? IF so have you really looked close at your usage? In our part of the country we have long stretches of deep clouds in the winter. So last winter I ran a 1500 KWh deficit over 3 months. Now I made that back over the next 9 months. But a 1500KWh battery is some serious money and space. Yes one can add solar panels but my system which will easily generate over 40KWh in the spring (when I use about 10 a day) has only average 2 KWh a day the past few days when I am now burning 40 KWh/day as I need to heat the home. On a cold snowy day I can run a 60 KWh deficit and it is common to get several of those days in a row. Yes batteries can help but most people have along way to go before they can cut from the grid.

Precisely... going off-grid is generally a loose-loose-loose proposition...

You Spend more for batteries (LOOSE)

The utility can't sell your surplus (LOOSE)

You can't profit off your surplus (LOOSE)

We are stronger together; Industrial wind is also a great source of energy in the winter when solar output drops... but you need the grid to benefit from that.

 

[woof]

I go back to my favorite metaphor: when you drive across a toll bridge, you don't get that toll rebated when you drive back across. Why then should your infrastructure charges on your power bill be reduced when you "drive power" back across?

In this metaphor, the bill should be rebated because the power company then went and sold your car to someone else and got paid for it. The bridge is there to facilitate sales of cars, either to you, or from you. The cost of the toll for the bridge in both directions gets built into the price of the cars. If we buy and sell equal numbers of cars, it's identical to buying no cars, and so the bill at the end of the month should be $0.

Now, if you postulate that the bridge is owned by a third party...then both sides would owe $$$ to the bridge owner even if they bought and sold an equal number of cars...so not only would you NOT get a rebate, you would get an additional fee as well. But a sensible person would just raise their prices by that amount and once again at the end of the month the money out would equal the money in, still with a net gain of $0. And the bridge owner would have gotten enough money to keep the bridge in good repair.

 

[rolosrevenge]

Anyway, I wander from the topic. The exact figure isn't really important, but the principle is: grid-connected customers should be paying their fair share towards covering the costs of building, maintaining, and operating the grid. I support net metering -- if and only if the price of power is set equal to the spot price in the wholesale market, both going into your house and coming out. Then there needs to be a lot of careful thought about how to assign the rest of the grid costs. These costs are currently assigned to residential customers by their kWh usage, which was never a good metric and is made worse by distributed generation.

In this model, you can make a profit from your solar array by selling lots of power at times with high prices (daytime peaks) and buying it back when it's cheap (overnight). As more and more people install solar, though, the daytime prices will drop and evening prices will rise, making it less profitable for yet more people to install solar. This market effect will create an equilibrium point at which no more solar is installed because it's no longer economic.

I go back to my favorite metaphor: when you drive across a toll bridge, you don't get that toll rebated when you drive back across. Why then should your infrastructure charges on your power bill be reduced when you "drive power" back across?

You always beat me to this common sense.

 

[nwdiver]

I go back to my favorite metaphor: when you drive across a toll bridge, you don't get that toll rebated when you drive back across. Why then should your infrastructure charges on your power bill be reduced when you "drive power" back across?

As I mentioned in my blog I'm no fan of net-metering which is the only scenario where the toll bridge analogy really applies. If the utility needs to collect $0.02 for every kWh that uses it's lines but the retail value of that kWh is $0.10 that's still $0.08/kWh that should be credited to the home owner.

Basically my point is that homeowners with excess generation should be able to pay for their use of the grid in kWh instead of $$$. The value of a kWh obviously being contingent on supply/demand. The article I initially linked to was unequivocal that residential customers should 'ALWAYS' have a bill.... 'ALWAYS' is FAR FAR to broad a term.

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

If the value of energy goes negative during the day... fine... economics will drive storage and instead of exporting power during the day more people will invest in batteries so they can export the power when it DOES have value.

 

[wycolo]

How I'm thinking to deal with these LOSE-ages:

1. Install TWICE the solar panels, both electric and thermal, than normally recommended for my location. This would attempt to *really* compensate for cloudy spells. At high altitudes we rarely get socked in by clouds for entire days, usually sun appears every so often during a given day.

2. Dump excess energy into heating house, hot water tank, rock mass storage, in that order. That is of course *after* the batteries are 100% full (ok 90% full). The rock can get as hot as the resistor bank itself!

3. If worst case cloudy conditions persist rendering the Teslas unable to achieve minimum weeky shopping trip, 120 miles total, then use the ICEs to run genset and/or make the shopping trip.


> We are stronger together; [nwdiver]

You want togetherness, come soak in my hot tub (another good heat dump! - thanx for the suggestion). :wink:
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[nwdiver]

How I'm thinking to deal with these LOSE-ages:


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No one thinks it's impossible to go off-grid... you're just spending more to get less... You're going to have the most excess energy in the summer. Is that really when you want to be 'dumping' heat into your house? If you have the equipment to keep your home powered off-grid then you probably have the equipment to be an asset to the grid instead of liability. The utility should be required to pay for assets.

 

[wycolo]

> No one thinks it's impossible to go off-grid... you're just spending more to get less... [nwdiver]

It actually *is* impossible to go off grid today and charge a Tesla or two. Try to design such a system at any cost and see the response you get: 'It can't be done, you can't get there from here', etc.
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[omgwtfbyobbq]

I think the best you could do is buy two Teslas and drive the other one every other day. Anything else and you're pretty much paying for wear and tear on two battery packs.

 

[Robert.Boston]

Or do your grocery runs at night? :biggrin:

 

[ItsNotAboutTheMoney]

In this metaphor, the bill should be rebated because the power company then went and sold your car to someone else and got paid for it. The bridge is there to facilitate sales of cars, either to you, or from you. The cost of the toll for the bridge in both directions gets built into the price of the cars. If we buy and sell equal numbers of cars, it's identical to buying no cars, and so the bill at the end of the month should be $0.

Now, if you postulate that the bridge is owned by a third party...then both sides would owe $$$ to the bridge owner even if they bought and sold an equal number of cars...so not only would you NOT get a rebate, you would get an additional fee as well. But a sensible person would just raise their prices by that amount and once again at the end of the month the money out would equal the money in, still with a net gain of $0. And the bridge owner would have gotten enough money to keep the bridge in good repair.

Let d be distribution or delivery
Let s be supply
Let p be profit

Normal price is d + s + p
You output x kWh and input x kWh later
Under net metering:
For your production you earn d + s + p
For your consumption you pay d + s + p
Your net cost is $0

For your production the utility pays d + s + p
It sends it to another consumer who pays d + s + p
For your consumption the utility earns d + s + p
The utility net earning is: d + s + p.
But it has delivered 2x kWh
In other words, it's losing distribution money, which has to be made up the only way it can, by raising the price of distribution/kWh. That doesn't affect you, because you net meter, but affects all the other consumers. I get that the price of supply varies and they may effectively earn more, but if solar PV is to be successful, net metering is a terrible pricing system, and trying to recover distribution costs per kWh is a bad system.

 

[Cosmacelf]

So, a 10kW system that will save at least $120/month from your electric bill, will now cost an extra $7/month. I'm not seeing where the sky is falling.

Do you guys not agree that PV customers should pay some kind of fee for grid use?

 

[bollar]

Last week, Arizona regulators gave the state’s largest utility, Arizona Public Service(PNW), the authority to charge homeowners with solar panels on their roofs a fee for plugging into the grid and in some cases, selling electricity back onto it. Beginning next year, homeowners who install rooftop solar systems will have to pay a monthly levy—the first ever in the U.S.—equal to 70¢ per kilowatt of installed capacity.

http://www.businessweek.com/articles/2013-11-22/arizonas-new-fee-puts-a-dent-in-rooftop-solar-economics

I don't know this is the first. Our utility has levied a $12/month "distributed generation" charge for more than a decade.