Another State Increasing Rates on Residential Solar
2GreenEnergy frequent commenter and all-around cool guy Brian McGowan sent me this article on the push-back that residential solar users in Northern Texas are receiving from their power utility. I respond:
Well, at a certain level, all this is business as usual for a power utility: fighting to protect its profits, which means convincing the PUC that this fee is both fair and required. (And based on the article, I’m happy to see that this isn’t going to be a piece of cake.)
At a deeper level, this overlooks a couple of critical ideas:
• Through whatever mechanism, home owners need to be encouraged, not discouraged, to install solar, for the good of the quality of our skies and oceans, not to mention climate stability. We’re still not factoring in the externalities of generating electricity from fossil fuels, and until that happens, it will continue to be possible to force early adopters of solar to pay more than their fair share.
• There is no conceivable force that will prevent solar and wind from eroding market share from coal and gas over the period of the next few decades. Why not figure all this out now? We need a wholesale replacement of our 100-year old relationship that consumers have with the utilities; eventually, this will need to be confronted.
There’s no time like the present, as they say.
And, not to be obnoxious, we should understand that Texas isn’t exactly the garden spot of the U.S. when it comes to social progress. They’re very strong in guns, trucks, and lethal injections, but not too dominant in evolving a gentler and more thoughtful civilization.
Just as we need to rethink the structure and regulation of grid level energy storage we would be wise to reconfigure how utilities get paid.
Both of these things are regulated by the various state public utility commissions. Just having so many different public bodies for regional systems creates problems. This has the potential to go far beyond “eliminating 2 regulations for one enacted” and eliminating 50 for 1.
One solution would be for the DOE to create model regulations. Then just as the NEC or Federal highway standards were adopted locally there could be some consistency without taking power away from the states. In the case of interstates federal money was provided as an incentive to adopt the uniform regulations.
Craig,
New technology is be disruptive to existing infrastructure, especially when the existing infrastructure is governed by complex regulatory regimes created for the different circumstances of a past era .
Naturally, Solar and Wind industry advocates concentrate on the positive aspects of renewable energy while downplaying the difficulties created by the introduction of new technology.
The problem isn’t confined to the US, although the US has one of the most complex methods of governing electricity supply in the world.
Breath on the Wind’s identification of the need for a re-think on the organization of the entire Utility business model is very valid.
The rapid growth of new technology often creates unintended and unanticipated effects on peoples lives. Change is inevitable. The more negative aspects of disruptive new technologies can only be accommodated,even mitigated, by rational and objective planning, not ideological enthusiasm and political opportunism.
Evaluating issues involved with the introduction of new technology for generating and distributing electricity will inevitably be complicated by extraneous interference from individuals and organizations with extraneous ideological and political agendas.
Reactionaries will seek to dilute or prevent the growth of new and disruptive technologies for reasons ranging from self-interest to a fear of the new. Leftist ideologues will seek to exploit new technologies as to advance political and social agendas.
Intense lobbying and propaganda from completing industry interests just adds to the general confusion. Legislators will inevitably produce new regulations aimed at achieving political, rather than rational, settlemenst. The new regulations will be just as ineffective as those being replaced.
That may sound cynical, but it seems to be how our system works.
The cost of power distribution is enormous, especially maintaining and replacing networks and infrastructure designed in a different era and in different economic circumstances.
In Australia, when an elderly neighbor died, (the last of a pioneering family who colonized the valley 120 years earlier) his small holding was inherited an by an idealistic young female relative .
Unfortunately, she possessed little farming experience only the occasional holiday visit
Australia is a hard unrelenting country for agriculture, with few locations suitable for the naive or inexperienced.
While I had my reservations about the viability of their dream, I welcomed the young lady who brought her boyfriend and another couple of friends from university to the valley and did what I could to assist fulfill their ambition to eke out a living from the land.
Naturally, when the Australian government offered generous incentives for the installation of solar panels, these folk enthusiastically embraced the idea, and purchased the solar equipment, deciding on a DIY installation.
Unfortunately, they completely misunderstood the alarm from other landowners and the authorities. Australia is a country terrified of bush fire and amateur installations are unappreciated.
Reluctantly, at the behest of my daughter, I intervened with the authorities on their behalf and helped bring the installation into conformity.
Nor did they fully understand the limitations of solar panels. Although they were content to dispense with most of the necessities of modern living, that all changed with the birth of the first child.
Their rash decision to go “off grid”, meant the local utility removed the old power connection. (Making me happy, as power lines are a major source of bush fires).
Sadly, within a few years, the young couples found “organic” farming exhausting and uneconomic. The idealism of country living, died as the drought deepened. With the departure of the second couple, the young lady luckily found employment as a teacher with a local school helping to supplement their income.
Disaster struck when the cheap Chinese panels developed defects, and the inverter needed replacing. The warranties were valueless and although we did what we could by giving them assistance and even hospitality through the winter, they decided to abandon farm life.
It was when they tried to sell the property, an unintended consequence of going “off grid” hit home. Not only did the local power utility demand a huge sum to reconnect a power supply to a remote location, but the mortgage holder proceeded to issue immediate foreclosure since the property had dropped in value without adequate power supply.
The property was auctioned and as expected the only bids were far below even the reduced value and inadequate to cover the mortgage, which (unlike America) would have left the young family heavily in debt.
Not wishing to lose a young family who had worked so hard to become useful members of our local community, (and to please my daughter) I bought the mortgage and offered our young neighbors an affordable rental tenancy.
By connecting the property to our much larger, Solar/Wind/ geothermal power supply and providing access to better farming resources, we’ve been able to provide an economic basis for one family’s dream of a better life in the country.
I provide this illustration to explain why power production and distribution needs a collaborative approach, not unrealistic idealism.
There are no “bad guys” in this example, I understand the Utility’s position, installing and maintaining a power line almost two miles from the nearest substation, is prohibitive at today’s costs. (It would take over 150 years to recover the cost !).
Nor is the “fault ‘ of the young couple. It’s true they were overly optimistic about the adequacy of solar power, and unwise in their choice of equipment supplier, but they meant well and there has to be ‘first adopters’ or nothing would change.
Marco that was a interesting story and full of the many hidden or not so apparent real costs of changing the infrastructure of providing power that meets all of ones needs.
Nice ending that you were able to help the young couple salvage their Country lifestyle Journey…
In my work with a mixed group of solar and Re enthusiasts getting people off of their limited knowledge of the real economics of the Grid and getting them to let go of their 1 size fits all positions is a challenging task.
They let their hard line positions that the utility is just greedy and wants to block their goals get in the way of finding a middle ground solution that is equitable to all.
Rather than work on a model of design that will enhance the inter action of the Grid with their Distributed Power they choose rather to hold on to Un realistic positions and want their way completely, almost claiming a victim hood status.
The hard core solar promoters want to sell as many panels as possible even if the excess power produced has a very low marginal cost that will take many years to recover the cost to over produce. Like its un economic.
On going battle:
A energy professional will propose some building envelope and proper appliance installations to be done first before the user turns to solar.
Efficiency first strategy which reduces demand and then the need for solar capacity is reduced. The wasteful excess power is also reduced. So when the consumer does install solar they will be getting
a system that is better matched to demand needs and supply capabilities.
This is the more optimal approach.
But because of a combination of emotion ( on consumers part) and profit desires ( of solar provider) resistance to good practices is strong until people have the disappointment of a mis matched system.
it will take a long education process and people need to inform themselves and let go of their emotions and greed.
As far as changing the regulatory structure in the US for utility regulation and rate making and rates of return that utilities need to operate. Yes indeed there is much need for some reforms.
The current model was built around a much different marketplace and economy that has changed. There are structural barriers to embracing new technologies and at the same time these barriers keep utilities trapped into a planning and investment model that goes against the reality of reduced energy usage and flattening demands.
New business models are needed and much work is being done in California and New York along these lines. It requires good balanced policy which flies in the face of the overly simplistic the market place un controlled knows best. that may work with the bubble gum market but it fails the reality test when it comes to clean power that is both affordable, reliable and sustainable.
Market and performance rates of return may be a new financial model that allows utilities to embrace more distributed generation and trans active energy policies. Opening up of the Grid is needed but close attention to infrastructure costs and the fact that these sunk and fixed costs just don’t go away just because one reduces their own energy consumption by 80 or 90 % – there is a cost for the Grid to still be there in the background ready to serve!
This reality gets lost sometimes in the Hubris of going green or dropping off the Grid. Cost Equity issues are complex will take time and effort to work out…
Interesting times much work to be done.
Silent,
Thank you for your well reasoned post.
I suppose all new industries endure an initial phase of overly excited expansion. New technologies tend to attract lot’s of people seeking to make a quick fortune, relying on misinformation and BS instead of bothering to acquire any real knowledge or insight into the complexity of the new industry.
I’m glad to see you’ve take the time and made the effort to educate yourself about your product enabling you to provide your customers with competent and trustworthy advice.
Research and development of energy storage technology is advancing very rapidly. Hopefully, these developments will enable an abundant supply of increasingly clean energy.
I agree 100% with your sentiment, “Interesting times, much work to be done”.