Solar Power Customers Will Have To Start Paying - And That's A Good Thing For Green Energy
    By Hank Campbell | June 2nd 2014 01:50 PM | 4 comments | Print | E-mail | Track Comments
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    Imagine this as a business model: You own a large potato farm. You have workers who grow and process the potatoes, you hire people to pay them, you have a sales force to sell them and then you pay trucks to ship them and have people to collect the money. You have fixed and variable costs and you charge enough money to pay those and make a profit. You have created jobs.

    The government decides that it wants to encourage everyone to grow potatoes. So they pass a law saying that if people will grow their own potatoes, they will subsidize it using tax dollars generate by other companies and workers. Then they mandate that in order to make growing potatoes appealing to more people, you will have to buy potatoes from individuals at the same price you sell them.

    You still have the costs of everything, but no margin, since you are forced to let these individual farmers utilize your entire infrastructure for free. And if you can't sell their potatoes, well, you'd better.

    That doesn't work economically, right?

    No, it doesn't. But it's been the oncoming economic train wreck of solar power for four decades. Instead of using taxpayer money to save electricity - by optimizing old, energy-wasting buildings - we have subsidized rich people getting solar panels on their houses. And it was a good deal for home owners because they got state and federal subsidies and then the electric company is forced to buy back excess electricity at the same rate they sell it.

    Canadians have been similarly duped but whereas we get techno-fever-dream ads with shiny panels (watch that efficiency drop after about two weeks of dust builds up) they get Solara - SunnyMoney's GoSolar Girl. Win, Canada.

    Utilities, of course, never had a choice in the matter. Utilities are a hyper-regulated 'unregulated' business, so they can do just about nothing without government approval. They can't raise rates or own transmission lines or, in California, even sign long-term contracts, but they have been allowed to pass along costs for their green energy programs - so poor people who can't afford solar panels in California are still paying $1.3 billion in annual costs for solar power, and that is just from three utility companies.

    Solar customers "avoid charges, not just for energy, but also the costs of the transmission and distribution system. That's why we say it is not sustainable," Dan Skopec, vice president of regulatory affairs for San Diego's Sempra Energy, told Christopher Martin and Mark Chediak at the San Francisco Chronicle.

    It's always been wrong, but such a small amount of money it was silly to worry over. However, when the administration decided to start spending tens of billions on solar and wind subsidies, the problem really became obvious.  Every time a new panel system goes up, taxpayers lose more money.  And it's the environmental gift that never stops costing.

    What would have been better? It seems obvious, but it lacked the aggressive lobbying paid for by environmentalists: If we really cared about saving electricity, we would have instead taken much less money, equivalent to three years of those solar costs, and weatherized every old, inefficient apartment building in California. Problem solved.

    Oklahoma has decided to try and take the first step and stop the madness. In April, they passed a solar surcharge law which would allow regulated electric utilities to impose a surcharge on customers - who have basically been unregulated utilities - who solar panels or wind turbines and use the grid. No more free lunches. In opposition were, of course, environmentalists and solar power companies.

    Why is that good? Because it is obviously the only way alternative energy will ever be viable. We keep being told by environmentalists that solar and wind energy are working, that they are blowing the doors off of natural gas in terms of cost and is as clean as nuclear without the drama, so it seems strange they would object to showing it works by not having individuals be some special class of unregulated, subsidized, individual utility company. If solar is as viable as claimed, people no longer need to be able to sell electricity at the same rate they buy it, nor do subsidies make sense. If the "It will pay for itself in 5 years" claims we always see are true, Napa Valley homes spending $1.45 million for a solar power installation don't need their farm hands chipping in state taxes for $319,000 of it, with a federal subsidy on top of that, and then also paying higher costs for regular energy. 

    The rest of the country should follow suit. There is no miracle of capitalism happening as long as poor people pay for solar installations on rich homes - because cost is no object when people are not footing the bill themselves. When someone really makes solar power work, then you will see companies rushing into it and then we can get rid of fossil fuels once and for all. 


    We wasted over two trillion dollars on 2 wars and your worried about a few billion in subsidies and tax breaks for renewable energy? All that aside you do realize that the 100 year old centralize utility model is doomed. Solar power (and storage) is following Moore's law while fossil fuels are 100% a finite resource. Which energy source do you think will support a global population of 7-9 billion people by 2050?

    PS: I installed a 6.7 KW solar array with zero tax credits or subsidies and I have put over 2.5 Megawatts ONTO the grid since Jan. 2012. I haven't received a dime for it so do you think that's fair?

    You are clearly saving a fortune on electricity so the subsidies are unnecessary, by your reckoning. I agree. But why do you send electricity back to the grid? If an electric company or a hotel has excess product they do not give it away for free so I am not sure why you do.
    I don't get paid because the way net metering laws work in Texas. The way the law is written I should get a check from the utility company right after I disconnect from the grid but they are under no obligation to pay Texas utility customers for their excess generation until they close their accounts. To add salt to the wound, yesterday ERCOT raised the amount they will pay for peak power generation to $7,000 per megawatt. Imagine if I could find a way to store those excess megawatts and sell them back to ERCOT my little solar array could be cash flow positive in 3 to 5 years and I would be paying taxes on those profits!

    Are you paying them for the cost of monitoring and absorbing the surges of the energy you put in, of keeping the phasing under control, of coordinating the backup capacity that has to be brought online when you drop off, and then standing down that backup capacity when you come back online?

    Maintaining the National Power Grid is far, far more than just running a wire from the generator to the home. The lines are several wavelengths long, and three-phase, so controlling the phase of the power going in is critical to keep things synchronized. A certain amount of backup generation capacity has to be held at hot-standby to cope with sudden drops or draws, but there's really little good way to absorb sudden excess surges - or we'd be praying *for* Carrington Events, instead of against them.

    Home PV panels make a lot of financial sense - until you add in the costs of excess storage - all that power you're supposedly selling to the grid.

    For more discussion on the topic of the power grid - try catching on YouTube, or Netflix, or where ever your favorite streaming source is - the first episode of the James Burke series "Connections". Truly enlightening.