Utility Companies See Rooftop Solar Energy as Business, Grid Threat
July 31, 2013 4:18 PM
comment(s) - last by
They're trying to slow the adoption of solar energy through lawmakers
Utility companies around the U.S. fear that solar companies and renewable energy incentives will replace traditional electricity.
According to a report from
The New York Times
, utility companies view
rooftop solar energy
as a threat to their traditional business model of providing electricity maintaining the grid.
In fact, some utilities have said that they should've fought the solar "disrupt" and are currently working to push back against government incentives for the renewable energy.
The utility companies' worries may seem a little ridiculous at present, considering rooftop solar energy alone accounts for less than a quarter of 1 percent of the nation’s power generation.
However, incentives around the country aim to expand the use of solar power in a big way. For instance,
California has a system
called net metering, which pays both commercial and residential customers for their excess renewable energy that they sell back to utilities. California pays customers very well through this credit system because the payments are bound to daytime retail rates that customers pay for electricity -- such as utility costs to maintain the grid.
reports that from 2010 to 2012, the amount of solar installed each year has increased by 160 percent.
At present, 43 states, the District of Columbia and four territories offer incentives for renewable energy in some form or another.
Solar proponents add that solar customers deserve payment and incentives for their efforts because making more power closer to where it is used (when resold to local utility companies) can alleviate stress on the grid -- making it reliable. It also helps utilities by relieving them from having to build infrastructure and sizable generators.
However, utility companies feel differently. Their argument is that
, at some point, may stop paying for electricity, which means they also stop paying for the grid. This shifts the costs to other non-solar customers.
According to California's three major utility companies, they could lose as much as $1.4 billion in annual revenue to solar customers when the state's subsidy program fills up to full capacity. This means that about 7.6 million non-soalr customers would have to make up for that, paying as much as $185 per year each.
This leads to something utility companies call the "death spiral." This refers to the costs being shifted to non-solar customers, and because of this burden, they switch to solar-powered rooftops -- making utility companies' troubles even worse.
For that reason, utilities have requested that lawmakers limit those who can participate in such programs, including net metering.
Some utility companies are adding rooftop solar to their services, such as Dominion in Virginia. But not all are willing to adapt, and while solar still only amounts to a small percentage of power generation in the U.S., it seems utilities are looking to prevent the renewable energy emergence from spreading.
The New York Times
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RE: Survival of the Fittest
7/31/2013 6:32:18 PM
Already done is some areas.
A friend of mine finished his new "solar powered" house about a year or so ago. He even now owns two Leaf cars. On a good day he powers everything from heating/air-conditioning to hot water to appliances to his cars plus sells back to the grid all from his rooftop solar systems.
He's connected to the grid too.
When it rains for a long period or is extremely cloudy for a very long period he pulls off the grid. When it was a nice, sunny fall or spring day he was pumping power back into the grid at extreme rates.
His bill is broken into multiple parts: base fee for the connection to the grid, off peak rate and peak rate(s).
He averaged, over the past year, zero energy bought from his local utility. He was so proud of his first year results he had to drag a large number of his friends through the design details and power billings.
However, he still had to pay a base rate every month in order to maintain the connection and convenience of being able to connect to the grid and pull from it when necessary. That base fee is effectively the cost to maintain the grid even if he does not draw from it. If that base rate were to even be five times what it is today, he'd still be OK with paying it for the convenience and assurance of having that backup, nearly infinite reserve energy source --- and according to him, his total energy purchase costs would still be less than before he tore down the original house and rebuilt it. Plus he has no solar panels on his garage giving an area for future growth.
Would most of us want to live in such an optimized design? Probably not. The house looks a bit odd as the roof lines and windows (and even the huge wall filled with phase change material to stabilize indoor temperatures) are a bit beyond the aesthetics most of us can support. But it works from him, and it will likely work for many others in the future.
The bottom line is that no matter how much power he makes he still has to pay the base fee just to connect to the grid.
"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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