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Power Politics

Gambling State Says the Solar Gamble Is Over 298

New submitter mdnuclear writes: In a strange echo of the depressed oil economy SolarCity recently announced a layoff of a quarter of its workforce as the apparent result of the Nevada PUC's decision to phase solar net-metering customers down from retail to wholesale per kWh. A scathing editorial in the WSJ last December took both solar leasing companies and their financial underwriters to task, calling net metering a "regressive political income redistribution in support of a putatively progressive cause."

Wednesday the PUC fronted a possible compromise, 'grandfathering' existing net metering customers to their current rates to create a third caste of energy consumers, those who had been in the right place at the right time — for awhile. One who had paid $22k into solar lamented, "I'm not happy; my wife isn't happy, we could have done something else with that money." Like many who leave Vegas, perhaps they should have. But this begs the real question... are net-metering schemes ultimately 'right' or 'wrong' for the grid?
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Gambling State Says the Solar Gamble Is Over

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  • Why retail? (Score:5, Insightful)

    by Richard_at_work ( 517087 ) <richardpriceNO@SPAMgmail.com> on Saturday January 23, 2016 @03:37PM (#51357743)

    Why should you be paid retail for generation? That totally ignores the part the grid takes in handling your energy...

    • Re:Why retail? (Score:5, Interesting)

      by Anonymous Coward on Saturday January 23, 2016 @03:43PM (#51357773)

      The argument was that you were supplying the electricity right at the point of consumption (it just flows to your neighbor), hence you aren't incurring all of the transmission costs of typical retail power. You're also likely reducing power company expense -- our local substation can't handle our neighborhood's power draw, and we used to complain about flickering lights...until 3 people on the block got solar, and no no lights flicker and the pwoer company didn't have to upgrade the substation.

      • Re:Why retail? (Score:5, Insightful)

        by PPH ( 736903 ) on Saturday January 23, 2016 @03:52PM (#51357823)

        What about the spinning reserve that the power company has to maintain in the event your solar panels or wind generator drop off line?

        • Re: (Score:3, Insightful)

          by Anonymous Coward

          What about the coal they don't burn, or the gas, or the...

          You can go "What about" all day.

        • by mellon ( 7048 )

          In principle they have to maintain less, so it's a win. In practice, it's early days for new generation mechanisms like solar, despite the rather terrifying amount of capacity that we now have. When everybody has panels, we'll have to have some way to pay for the grid, so obviously net metering _by itself_ doesn't scale, and particularly in states with lots of sunny days, this kind of adjustment was inevitable.

        • What about the spinning reserve that the power company has to maintain in the event your solar panels^H^H^H^H^H^H^H^H^H^H coal plants or wind generator^H^H^H^H^H^H^H^H^H^H^H^H^H or nuclear plants drop off line?

          FTFY ... there is no difference in spining reserves unless you are reaching 50% or more coverage by renewables. And then, they are likely geographically so much distributed that, there is no need for increasing spinning reserves either. A no brainer.

        • How about the 20% grid loss(I^2R) the utility doesn't incure when generating power at peak load, compared to locally generated power which incures almost no losses??

      • Re:Why retail? (Score:4, Informative)

        by Mr D from 63 ( 3395377 ) on Saturday January 23, 2016 @04:12PM (#51357907)

        The argument was that you were supplying the electricity right at the point of consumption (it just flows to your neighbor), hence you aren't incurring all of the transmission costs of typical retail power.

        That argument doesnt hold water. Even local neighborhood infrastructure has a significant cost. When excess solar is available from one home is probably when it is least needed in nearby homes, and solar itself still depends on support from the greater generation/transmission system to be economically viable to begin with as battery storage is still cost prohibitve.

        • Re:Why retail? (Score:5, Informative)

          by Firethorn ( 177587 ) on Saturday January 23, 2016 @04:29PM (#51357959) Homepage Journal

          It still lowers the total power that needs to be generated, and 'daytime' is still the point of highest demand. If they're not having to worry about neighborhoods(remember, more retired people means more power use during the day by retirees), they can concentrate on businesses more.

          I'm going to agree with others - net metering doesn't scale beyond a point. Nevada has NOT hit that point by any reasonable measure, they'd still need 10X the solar installs for that.

          Hawaii has hit that point. I think they're looking into time of use billing (which requires smart meters), and it's quite likely that night time power in Hawaii is going to end up more expensive than daytime due to the amount of solar. The electric company is having to adjust/update their distribution centers to allow backfeeding from them, because a few neighborhoods can actually go negative now.

          Which can actually make batteries(which have been dropping cost too), and other storage solutions viable. When electricity is cheap/free, make sure your hot water tank is 'topped off'. Heck, have a cold water tank for what little AC homes there need, and chill that at that point. Etc...

          • by eyenot ( 102141 )

            They wouldn't have *had* to build to handle power coming back if the entire system had been allowed to naturally turn into a power circuit instead of an out and back again distribution network. So, they kind of brought that expense down on themselves.

            • They wouldn't have *had* to build to handle power coming back if the entire system had been allowed to naturally turn into a power circuit instead of an out and back again distribution network.

              That makes absolutely no sense at all.

            • Plus they have a giant geological energy producer they could tap to make electricity if they really want to. Their only making 30 MW at the moment, but with multiple volcanoes there's no reason they couldn't go 100% geothermal. Well, other than the fact that some natives seem to get really mad about technological progress on their island that is.
              • You have to remember that Hawaii is actually a number of islands. The most inhabited one, as per the last official study, is actually a pretty bad candidate for geothermal power - while they could certainly install it, it'd have to go too deep. That being said, we've developed a LOT of new drilling technology in the last decade or so with the fracking and deep wells and such, so re-doing the math might make it make more sense today.

                The 30MW station is on a different island, which is much less inhabited, a

            • Uh... You might want to explain what you're talking about more, because it is a power circuit, and I'm not sure what you mean by an 'out and back again' distribution network.

              Transformers work both ways, but there's other regulatory equipment that needs to be designed with two-way flow in mind in order to work correctly, and previously that wasn't a design requirement. It required solar reaching 30% to start having that problem show up though, and from what I've read, the upgrades to enable bidirectional f

        • by eyenot ( 102141 )

          "Probably" was a pretty bad term to rely on in an argument you're making that someone else's argument doesn't "hold water".

          "Probably" to whom, when? You're talking about the middle of the day, when most power companies have determined is the best time to charge the most for power, because that's when the most is actually being used--

          wait a minute, have you ever even paid your own power bill? You're not ... 14, are you?

          • And, in the middle of the day, ask yourself, where is most of that power being consumed? In the home or in commercial properties, industry, and businesses? Most people size their residential solar to handle their own usage, but they have excess during the day when they are not at home, and their neighbors are not at home.

            Probably is perfectly appropriate when we are talking about overall behavior, as there are always exceptions when talking individual homes.
      • No, the argument is that in general society wants to get away from fossil fuel usage and solar just is not ready to compete on even terms with fossil fuels (so the only solution is to give solar a artificial advantage). No serious person ever made the argument that paying retail was actually fair.

      • by rekoil ( 168689 )

        I'd be in support for wholesale pricing on generation, or an infrastructure fee to cover the costs of transmission. The problem here is that the Nevada PUC is allowing both.

    • Yes, exactly. The folks who sized solar generation to meet *their* needs aren't harmed by this change. The only ones harmed are the ones who thought they'd get rich quick on an artificial market.

      • The folks who sized solar generation to meet *their* needs aren't harmed by this change.

        If you mean "minimum load" then, yes, they're ahead because they never send any to the grid in the first place. If you men "their average load," not so -- they're paying for the extra KW when the air conditioning kicks on and getting back a fraction when the AC is off.So in the course of an hour, they're behind by quite a bit.

        • If you mean "minimum load" then, yes, they're ahead because they never send any to the grid in the first place. If you men "their average load," not so -- they're paying for the extra KW when the air conditioning kicks on and getting back a fraction when the AC is off.So in the course of an hour, they're behind by quite a bit.

          They are way ahead of where they'd be if they had to use batteries to store their power instead of depending on the grid, which make the whole approach viable to start with.

    • by eyenot ( 102141 )

      Um... by generating power on your side of some transformer, you are reducing the load on that side, plain and simple.

  • by penguinoid ( 724646 ) on Saturday January 23, 2016 @03:47PM (#51357787) Homepage Journal

    Ha ha, suck it mdsolar.

  • by rsilvergun ( 571051 ) on Saturday January 23, 2016 @03:50PM (#51357799)
    here in Arizona when I started seeing these ads on youtube with a bunch of old people talking about something scary, ending with a passionate plea to vote for such and such law, which turned out to be a law that let the power companies stop paying for the electricity folks with solar panels put back into the grid.

    The whole "net metering" debate is just the power companies fighting solar. As time goes on it'll make electricity _too_ cheap. The reason we have public utilities is that businesses are in the business of making money; so for anything more important than a twinkie you're going to get price gouged sooner or later...
    • Re: (Score:2, Interesting)

      by rgbatduke ( 1231380 )

      No worries. With the Great Global Warming Conspiracy in place, power companies have already been raising rates and gouging people for years and anticipated being able to do so for decades. Solar simply bites into that with net metering.

      But it is nothing like the bite that is going to happen if any of the three or four companies or major projects that claim to be on the verge of fusion energy turn out to be correct within the allotted timeframe. Or, better yet, if two or three companies solve it slightly

    • I see net metering as a purposefully over-complicated scheme with a few minor selling points but an all-too-familiar drawback: the added complication allows for all kinds of back-and-forth fenagling, kow-towing, and piles upon piles of legalese to build up. After awhile it will get just as bad as financial securities, savings and loans, and the real estate market in terms of the various ways sneaky language is slipped into the rule set of various regulatory systems interconnected in the network of informati

      • I see net metering as a purposefully over-complicated scheme with a few minor selling points but an all-too-familiar drawback:

        If you see net metering as 'over-complicated', I'd hate to think of what you think of 'carbon trading' schemes.

        At least to the Consumer, net metering is actually about the most simple system.
        Net metering:
        Uses: 1000 kWh. Generated 800 kWh. Electric Bill: 200 kWh@12 cents each.
        Nevada rough example:
        Used:1000 kWh.
        Generated: 800kWh.
        Internally used: 500 kWh
        Sold: 300 kWh @ 6 cents (example amount)
        Bought: 500 kWh @ 12 cents

        That being said, given current generation profiles, solar panels aren't displacing 'wholesa

        • by sjames ( 1099 )

          It would also be worth looking at shifting demand. Set things up to run the dishwasher etc during peak solar production. Pre-cool the house and the fridge. Then size based on that.

          • A good point. A relatively small amount of battery, just to charge at minimum demand/max production points, might also make sense.

      • by thinkwaitfast ( 4150389 ) on Saturday January 23, 2016 @05:00PM (#51358103)

        piles upon piles of legalese to build up

        When I installed my solar, I looked at what sort of incentives that I could get. It would have paid a good chunk of it but after seeing all of the 'legalese ' and who owned what, I decided to go it alone.

        Now a few years later, my system is 100% paid off (ie, already paid for itself), all mine, making free electricity and don't have to bother with any companies. And since I built up a good base system, I can add quite a few more panels without any additional cost. In the years since I set up my system, the price of solar panels have fallen to a less than one year payback time

      • by Ken D ( 100098 )

        Net metering, as someone else said, is the simplest scheme.

        With 'old-fashioned' meters, you get net metering for free. The spinners spin forward when you use electricity and they spin backwards when you generate electricity, leaving the meter to show you the net amount of power you used. simple.

        To do other than this requires the fancy smart meters that can tell whether or not you are consuming or generating electricity, and can meter them separately.

    • That's a big twinkie.

  • Time-of-day metering (Score:5, Interesting)

    by crow ( 16139 ) on Saturday January 23, 2016 @03:50PM (#51357803) Homepage Journal

    Sure, drop the rate back to wholesale for the buy-back of net metering, but then price it based on the spot market at that time, not the overall rate. The prices are highest during the day, so net metering for solar would likely pay more than the retail rate if the utilities had to pay for it based on the time.

    Overall, utilities are saving money from solar--they're reducing what they have to pay to support peak demand, and now they're coming back and trying to suck more money out of their customers.

    This is a money grab by the utilities, plain and simple. This has nothing to do with fairness.

    • by HornWumpus ( 783565 ) on Saturday January 23, 2016 @03:55PM (#51357837)

      Wholesale peaker rate is different than wholesale baseload rate.

      The best price of all is for wholesale on peak dispatchable (on demand) power. Which solar isn't.

      • The best price of all is for wholesale on peak dispatchable (on demand) power. Which solar isn't.

        The spot market dos not care if the 2GW you are about to sell the next 2h are produced by a dispatchable plant or not. The price is the same.

    • by blindseer ( 891256 ) <blindseer@earth[ ]k.net ['lin' in gap]> on Saturday January 23, 2016 @04:43PM (#51358019)

      Spot electricity prices are typically higher during the day but that is not always so. Imagine a situation where a large number of people on a local grid had grid tied solar. On a cool sunny day it is conceivable for the spot electricity price to go negative. Would the people with the solar panels be then expected to pay the utility for taking their electricity? Perhaps the utility should have the choice to simply not buy their electricity at that time.

      As the laws are typically written for rooftop solar the utility must, *MUST*, purchase the electricity from the homeowner at the retail rate. This is awesome for early adopters, and perhaps even for the utility. The problem arises when the number of rooftop solar customers exceed what the utility can handle. Too much solar power and the electric grid is now "running backwards" along some runs, the grid is not designed for that. An electric utility certainly can make an electric grid to handle rooftop solar but then the people with the rooftop solar are no longer "customers" in the traditional sense, they are producers. As producers they should be no different from other producers. Failing that then the economics start to break down, people with rooftop solar could conceivably be paid for the privilege of getting back-up power from the utility. Too many people doing this and the utility will have to raise prices. The income from the utility to the rooftop solar people goes up and the people that cannot have rooftop solar, apartment dwellers (typically the poorer people) and industry see their rates go up.

      Solar subsidies like paying rooftop solar producers retail rates is a wealth redistribution from the poor to the wealthy. It's time for it to stop.

      Solar power is now a mature technology, we don't need subsidies to encourage adaption anymore. Solar makes sense on its own, we don't need to prop it up with government mandates and subsidies. Solar subsidies are now just corporate welfare and regressive taxation.

      • Solar subsidies like paying rooftop solar producers retail rates is a wealth redistribution from the poor to the wealthy. It's time for it to stop.

        We are essentially paying part of the power bills for those people who are in a position to install solar and take advantage of all the financial help. I have always felt the best thing to do is take all that solar incentive money and use it to buy solar panels for schools. Then the schools get the financial benefit, we still get solar panels installed, and those that want solar in their homes will still install it (if it is as good a deal as the solar industry claims).

  • Plan B (Score:5, Interesting)

    by overshoot ( 39700 ) on Saturday January 23, 2016 @03:50PM (#51357809)

    If utilities don't do retail metering, consumers can get similar results by pooling their loads. Solar cogeneration is short-term steady while most domestic loads are intermittent, which means that over an hour a consumer might be a net provider to the grid but get charged amost as much as without cogeneration.

    On the other hand, a buyers' co-op smooths out the load variations and approaches the effects of net retail metering. Which is appropriate, because (unlike wholesale rates) cogeneration does not put extra load on the grid.

    If utilities don't adapt to these realities in a more realistic way than offering wholesale (i.e. solar plant) rates to cogeneration providers, they're likely to see a lot of pressure for cities and especially smaller towns taking over last-mile electrical distribution to get the same effect.

    This last is not completely hypothetical; at least one Sunbelt town (mine) is moving in that direction.

    • by eyenot ( 102141 )

      I think there might still be some municipalities wherein if two properties share their own independent distribution line, then the power supplied by that distribution has to be isolated from the grid entirely. So you would find two people with solar panels willing to maybe run a line between their back patios but not to the rest of their house.

  • by markus ( 2264 ) on Saturday January 23, 2016 @03:50PM (#51357811) Homepage

    The more the utilities push towards charging decentralized solar, the more it becomes attractive to get battery banks and to completely go off the grid. Technology isn't quite there yet. Batteries are still too expensive, capacities are too low, and they need replacement too frequently. But the trend is definitely in the right direction. In a few years, it'll make sense for many current home owners to install batteries and disconnect from the grid altogether.

    Why would you want to pay a monthly interconnection-fee, if you don't really need the grid and if you can't sell excess energy.

  • by mpoulton ( 689851 ) on Saturday January 23, 2016 @03:54PM (#51357833)
    The "real question" is not whether net metering is good or bad. Of course it's good, and it will continue to become more common as solar (and even wind) micro-generation technology improves. It will get an even bigger boost if EV technology with bidirectional charging and large storage batteries become more popular, as Tesla would like them to. The dispute here isn't over net metering itself. The issue is all about the MONEY of net metering. Who pays what, and how? Before net metering, utility rates were set based on a fixed connection fee to pay for certain fixed infrastructure costs, plus an energy charge per kWh to gover generation costs. For large commercial users, the fixed fee was set as a "demand charge" based on peak consumption (since that determines how hefty the grid needs to be to serve the customer). For residential users, the demand charge is usually just a flat fee per month for the connection. In practice the demand/connection fee is not enough to actually cover the fixed costs of the system, and a lot of that expense is rolled into the energy rates. That doesn't matter in a world without net metering - it makes no difference to the utility whether they get their money per kWh or per month, as long as they get the money. Net metering screws this all up. A net-metered user may have zero net consumption in a month, while still requiring the same infrastructure as a user without net metering. As a result, the demand or connection charge needs to be greatly increased to make up for the lost kWh revenue.

    The problem is that the adjustment of rates to accommodate net metering has been a hugely political process with every party trying to screw everyone else to the max. Solar companies want their customers to see huge financial benefits to justify their prices, so they lobby for net metering rates that strongly favor their customers: low monthly charges (ideally the same as for non-net-metered customers), with reimbursement for net metered power at the full retail rate (i.e. 1kWh sold back to the power company nets you the same money you would pay to buy the 1kWh from the power company). This makes solar look like a great investment. The problem is that is really does screw the power company. Since utilities are typically government-controlled monopolies, that means it actually screws the non-solar customers who will all be forced to pay for the net-meter-users' share of infrastructure. Not quite fair. On the other hand, though, we have utility companies trying to get the solar power as cheaply as possible while still collecting full reimbursement for infrastructure costs. They want to treat net-metered customers like power plants: charge them for all the infrastructure costs, and only buy their power at "wholesale" rates that are far less than what the consumer pays for power going the other direction on the same wires. This is also not fair, and screws the people who want to invest in solar by artificially depressing the value of their power. The solution must lie somewhere in-between. Utility rates and their basic method of allocating them will need to change, and it will take honest politicians not bought off by solar companies or utilities to reach a compromise that is fair for everyone. Fat chance of that happening any time soon.
    • In practice the demand/connection fee is not enough to actually cover the fixed costs of the system, and a lot of that expense is rolled into the energy rates.

      In CA the electron prices are straight pass thru from the powerplants.

  • subsidies (Score:5, Insightful)

    by arobatino ( 46791 ) on Saturday January 23, 2016 @04:25PM (#51357941)

    Someone reading the WSJ editorial might get the impression that fossil fuel subsidies don't exist. Sure, get rid of the subsidies. ALL of them.

  • by h33t l4x0r ( 4107715 ) on Saturday January 23, 2016 @04:31PM (#51357971)
    There's a simple solution, just use all the power you generate.
  • I can't view the whole article (paywalled) so I'm curious to know the meaning of the summary quote:

    regressive political income redistribution in support of a putatively progressive cause.

    In Americans politics, "progressive" and "regressive" are usually taken as antonyms, hence the quote would suggest that the supposed income redistribution was going to the wealthy. However, progressive taxation is understood to mean a (purely hypothetical state in this country) taxation system where the effective rate on the wealthiest people is highest and the rate on the poorest is lowest. These seem to be

    • You can view WSJ articles (up to 5 per day) by googling the title ("Nevada's Solar Flare" in this case) and clicking on the WSJ link. It's also possible to bypass the paywall permanently [redflagdeals.com].

    • by dywolf ( 2673597 )

      just typical WSJ editorial word salad.

  • by Fencepost ( 107992 ) on Saturday January 23, 2016 @05:16PM (#51358189) Journal
    The two sets of changes are a gradual drop in per-KwH from 11 cents to 2.6 cents along with an increase in the charge for connecting to the grid, going from $12.75/month to $38.51/month.

    If either one of those wasn't changing or was changing less then it might be feasible to at least break even; I suspect that the combination is actually designed to ensure that it costs more to feed power to the grid than you can possibly get back financially unless you have a huge (and thus expensive) solar array.

    The biggest question now for me would be whether that $38.51/month charge applies even if you're set up to never feed energy back to the grid - if so, then this was absolutely set up to screw anyone with solar. If you can have solar for your own use (e.g. to cover your own AC/heating during the day) and just use the grid as backup, then it may still be feasible - particularly if cost-effective energy storage options become available. Depending on how things were set up, those options might not even need to be very efficient - heating or cooling of thermal masses for overnight temperature control for example.

    Or, if you have electricity that you'll have to pay to send to the grid then it's effectively free to use it on other things. How much do Bitcoin mining rigs cost? Or incandescent-lit signs that say "F*ck The PUC"?
  • The best idea is to cut the cord and make all of your won power. Solar, wind, as well as the occasional generator feeding a decent battery bank can provide power for cautious users. What we expect from power companies is total commitment to getting away from burning fossil fuels.
  • Even if you have solar, and even if you use zero net KWH of energy, your bill is still full of a bunch of different charges that you cannot avoid. These various fixed and distribution-based charges are what pay for the grid infrastructure. Solar only lets you avoid (some of) the supply charges, I.e. the charges for the actual KWH. I have several neighbors with efficient homes and solar arrays who generate all their net energy and even send extra energy back to the grid, but they still have to pay nearly
  • This is done on purpose. It's nothing new. They give a steep subsidy to get the players all excited and people buying in and then they crash the subsidies all at once. It tanks the market and turns people off for decades to come.

  • I think it is fair to pay the solar customers wholesale price when they feed the grid, But it should be wholesale price in the spot market at the time. Most solar customers generate excess energy at the peak summer heat, that is exactly the time the spot electricity price spikes, These solar panels are reducing the peak load of the utilities and the need to buy high priced electricity in the spot market.

    So if the utilities want wholesale price they should pay spot market price. Electronics is cheap, we ca

  • the Republican governor of Nevada doesn't want his citizens to have good paying jobs. Keep 'em down with menial jobs at the casinos.

  • "One who had paid $22k into solar lamented, "I'm not happy; my wife isn't happy, we could have done something else with that money."

    ...paid 22k, but how much did s/he recieve in tax credits, grants, and rebates?

  • SolarCity has bout 16,000 employees. 550 is a quarter of it's Nevada workforce. The article itself is poorly worded.

    (yes, I work for SolarCity)

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