Unintended circumstances. Boy, do we do those well. (In other words, we don’t do things all that well.)
Now, don’t get me wrong. I am absolutely in favor of renewable energy. It is, indeed, the future program for energy generation- for us…and the rest of the world.
But, we need to think things through and be cognizant of the tradeoffs and considerations these choices offer to employ our best alternative.
After all, solar and wind facilities demand some 10X the land area that a natural gas-based power plant will utilize. And, sure, we can use that land for pasture and/or farming- but if we are talking about a smaller community, someone will have to be able to contribute to the tax base that has been diminished through all that dedicated land use.
Or, the fact that we have been subsidizing a bunch of rooftop solar companies. Using net metering concepts to make the installation of residential solar more cost efficient for those who are rich enough to buy them. Which explains why- up until 2020- California was the leading state for rooftop solar installations. (California accounted for 1/3 of all the new 2020 solar installations in the USA. And, some 15% of all residential homes in the state have already installed rooftop solar.)
Let’s back up a second. Do you know what net metering is? That means the local power utility must buy the excess electricity a homeowner generates via solar (or other energy production) at the exact same rate the power utility charges the homeowner for delivered power.
Except those power companies never buy power from another vendor (such as a nearby power facility) at retail prices. They negotiate significantly lower rates- often below wholesale- at which they are willing to purchase power to supply their customers.
And, who do you think is going to make up that extra cost the power utility firm has been shelling out? You and me- the folks who don’t have enough cash to ante up the funds to install rooftop solar. You know, the folks that are at the lower end of the income strata.
Except now, they also have to pay higher utility bills to cover the subsidy (excess payments) rooftop solar residential units are receiving for their power generation. That cost has been estimated (nationwide) to range between $ 1 and 3.5 billion a year!
There’s at least one other factor to consider. Some power companies simply can’t absorb all the power they are forced to buy during the day. (Those in the State of Hawaii certainly come to mind.) They may also need to spend precious capital to install an energy storage system (batteries, pumped water storage)- which also assumes they can incorporate that stored power into their grid supply at a later, more opportune, time.
These considerations certainly do explain why new rules (abandonment of the net metering system) are being developed. Instead of rooftop solar units getting 17 to 44 cents per kWh (kilowatt-hour, the unit of purchased or sold energy), it is to be decimated to 3 or 4 cents! That’s good news for the power companies and for those who don’t have installed rooftop solar units. But, it does mean the breakeven point for rooftop solar is going to be 11 years minimum- up from the 7 years that was promised to them when they bought those units. (Note- this may improve [be of shorter duration] dependent upon any tax incentives the state or federal government offers for alternative energy installation.)
There may be a silver lining for those with installed rooftop solar. They can install their own storage systems. (Obviously they won’t be able to incorporate pumped water storage systems as shown above- but battery backup will make sense.) That would change the breakeven point for rooftop solar (with incorporated battery storage) to 6 years- not those 11 under the new rules.
This is going to get interesting, right?
SIX more days until we can file taxes. (Business have been able to do so since last Friday.) Have you obtained your copy of my book to help you negotiate the 2021 tax filing season?
Why does corporate America do so much to ruin the environment? Do they need the money that badly? So frustrating – and eye-opening. Thanks for sharing – and good to see you again. 🙂
Elisa Heisman recently posted..The Best of Book Clubs
Again- this is not an issue with corporate America. The net metering policy was adopted to enable folks to adopt solar very easily. That time- where energy is purchased from the homeowner at retail rates- has come and gone.
I am always surprised by revelations of how it’s the taxpayers who pay instead of the big corps who can afford it. Have to admit that I knew nothing about rooftop solar, but I see that it is yet another example. Hope you’re right about the promising change.
Not sure why you would think corporations should be paying for residential solar. But, the ratepayers – those who don’t have solar- have been paying when the net metering concept applies. Requiring power companies to buy up the power is one thing- but it needs to be done at wholesale rates.
We have considered getting solar power but we have other things on our list that need to be done first. Thank you for telling me about the rule changes. That will definitely factor in…
Dominique recently posted..Black Bean and Sweet Potato Soup
I, unfortunately, live where tree cover would make solar an iffy proposition. But, it always intrigued me, Dominique.
We just had a door to door salesman come through our sub-division yesterday (even though it says no solicitating) and he starts out by name our local electric company making it sound like he’s working for them. He isn’t though. Not sure if I would live long enough to make solar worthwhile.
Martha recently posted..Sons of Thunder
Oh, Martha- I’m fairly certain, that where you live, solar would work very well.
Solar needs a well thought out plan of action.Very interest and helpful post.
It certainly needs to include some sort of storage system, Dr. A.
This was an interesting read! Thanks for sharing
Thank you so much for you visit and comment.
When I moved back to Delaware in the 1980’s we were again having high gas prices. And, of course, gas rationing of 1979 was still on our minds.
That was when I noticed a strange anomaly. Locally, we had long platforms at most area farms that would be ideal for solar panels, but none were being used. I mentioned this to people and they looked at me a bit strangely – that ‘you know nothing’ look – but made no comment. I had been snubbed and told to mind my own business. Finally, a chicken farmer gave me the answer: The chicken processor paid the fuel bill, not the chicken farmer. Unless the buyer – Purdue, Townsend’s, Allen’s – put up the panels, forget it.
That was then, when most chicken houses weren’t automated or near as electrified as they are today with moving curtains, tv monitors, sprinklers, electric heat, etc. The question still remains.
Today we have two main suppliers of electricity: DelMarVa Power and the Delaware Coop. Both are trying to become less dependent on fossil fuels. Delmarva buys power from third parties using wind and sun. The Coop may do the same, but it also has a “solar farm” of hundreds of acres of arable land here in Sussex County.
Since the 1980’s, the permanent population of Sussex, as well as Kent, has grown at least tenfold with concomitant home building. In fact, farmland is vanishing before our eyes as greed and retirement meet.
Now I see vast expanses of ‘development’ – some attractive and interesting but most cookie-cutter and cluttered. What do they have in common? A vast expanse of shingled and metal acres of roofs uncluttered by solar panels.
Why?
First would be the desire for quick, cheap construction to turn a fast dollar before moving on to the next ‘development.’ Second is the lack of initiative on the part of both the builder-developers and the utilities.
While this could be a cheaper source of power for the utilities, they sit on their hands awaiting individual homeowners to approach them only after third party salesmen have delivered.
Yes, Delmarva Power is legally required buy unused excess electricity at a set price. So what? If they need it here, why not source it here?… or sell it to the grid rather than bear the expense of long transmission?
No, the Coop is not required to buy at the price its members are charged, or, indeed, at all. Why doesn’t the Coop sit down with a developer and negotiate a contract for the total development, agreeing to pay 85-90% of its charges for excess electricity.
If solar panels are part of the initial build, the cost of installation plummets and the proper inverters – specified by the utility – will be correctly installed right next to the EV charger.
So far, everyone benefits. The new homeowner now knows his cost of electric heat, car charging, electric stove, washer-dryer, etc. will be greatly discounted and possibly more reliable. The builder can charge a bit more for the buyers’ convenience and future savings. The utility increases its required ‘green’ footprint while getting a local source of power likely cheaper than sacrificing farm- or living- land.
If this seems too easy, maybe it is. Why hasn’t it happened? When will it happen?
If we are all going to use more electricity — and we definitely are — let’s do so efficiently now, rather than later, when, probably, zoning will demand it.
I think that’s a great plan. Have you considered asking the County Officers to take the initiative?
We need that sort of thinking to make a difference for our communities.