By Tom Cushing
"Here Comes The Sun"Uploaded: Dec 18, 2015
Old King Sol is on a merry roll, or at least a power trip -- from Paris, to Washington, to the CPUC in San Francisco. The sun, in the form of solar-generated electricity, has gotten three good, solid jolts of encouragement this month.
The Paris climate summit achieved many things, including the announcement of a 120-nation coalition to pursue solar alternatives, especially in lesser developed tropical climes. The idea here is to mobilize the vast financial, technology transfer and physical capabilities needed to promote clean development, by leapfrogging older technologies in favor of renewables. Climate Change News called solar and related technologies the ‘biggest winner’ coming out of the Paris Conference.
Of course, solar has a very long way to go, as only a minuscule portion of the world’s total energy output is now so generated. That said, the potential is nearly unlimited, as ‘tis claimed that enough solar energy shines down on us in an hour to power the entire world for a year. It is also said repeatedly (but all quoting the same source – uh-oh) that, at current rates of conversion, a solar array roughly the size of our fair California (or Spain, if you prefer living here), could power the globe.*
The sun is getting a second bump in the current federal budget deal, just announced. An Investment Tax Credit program offsetting 30% of the cost of solar collection systems appears to be extended for another five years, along with similar credits for other renewables. The program had been set to expire after 2016, and reports of its possible demise had cast a pall over the supply chain of businesses in that arena.
Finally, and most immediately, the California Public Utilities Commission this week issued a proposed ruling that extends favorable so-called ‘net metering’ regulations, much to the chagrin of the state’s three major utilities.
Following the thumbish rule that if PG&E opposes it then it’s probably a good thing, this appears to be an excellent outcome for residential energy consumers. I will attempt a further explanation that strains the limits of my very incomplete understanding of the issues. Chime-in, oh ye experts!
So (the new universal start word), when you buy electricity from PG&E, you are not only paying for the electrons that you use, which are generated or purchased by the utility and passed on down the power lines. You are also paying for the lines themselves – the development, care, maintenance and repair, improvement and (dare I say) safety of those wires and pipes. We are all well-served when those conduits don’t explode, and otherwise stay invisible to us.**
A residential rooftop solar array is generally sized to meet about 80% of the expected electric usage***, as output varies by season and weather. Its meter is reversible, so that it can push current onto the grid in daylight, and draw from it at night or in peak demand periods. PG&E states that its service area contains fully 25% of the country’s rooftop installations, with a new system coming on-line every seven minutes (day and night, apparently). Still, solar covers only about 3% of the state’s overall residential usage, and roof-top systems are inefficient, relative to larger arrays.
The utilities have begun to feel the revenue pinch, and they believe that their solar customers are not paying full freight to maintain and upgrade an aging grid that was never designed for two way traffic. Solar customers already pay a recently enacted access fee to maintain their connections, but PG&E and its brethren would prefer a much higher toll. In Arizona, where the citizenry takes apparent pride in so-called Regulatory Capture, the utilities now charge $50/month for such access. It dramatically alters the economic payback on a solar investment, such that the state’s new solar installations have barely cast a shadow since those new regs took effect.
But wait – there’s more. Add battery storage to the mix and the incentive for solar folk to abandon the grid entirely absolutely glows. It is widely believed that economical storage is not far over the horizon. That would mean no hook-ups at all, for either back-up or downtime. On an individual level, that’s a plus, but it puts the utilities into what they call a regulatory death spiral – remaining Non-solar customers end up footing larger-and-larger fractions of the grid system’s costs as their numbers shrink.
Thus the utilities proposed to replace the current net metering system with more assured revenue, albeit to protect their investment in a system that will be increasingly out-of-step with its customers. Like most large institutions, they appear to have difficulty re-imagining a future fundamentally different from the current one they’ve invested heavily in creating. Here, that means a static, centralized, longlines (and physically vulnerable) approach.
Specifically, they advocated paying solar customers wholesale price (I think like ¼ to a third of retail) for outgoing wattage, and retail prices for what they provide. That would fundamentally change solar economics, as reflected in PG&E’s VP of Customer Solutions claim that “we will still allow customers to save over 50% on their bills.” ‘Allow?’ That’s some customer-focused ‘solution.’
Essentially, it would amount to PG&E capturing a big share of the advantage inherent in the huge decline in solar system costs – estimated at about 50% in the past five years. Solar has been becoming a great bargain, and everybody seems to want their piece of the sun pie.
The CPUC’s proposed ruling this week instead continues most of the current net metering format. It does require a significant one time hook-up fee (up to $150). But it avoids the substantial ongoing consumer cost, uncertainty and complicated math associated with the utilities’ approaches. The ruling also recognizes the need to revisit these issues under future circumstances. Together with the renewed ITC, it should provide a further boon to local residential installations.
Direct sun power will continue to partially by-pass the middle man.
And I say, “it’s all right.” ****
*Of course, it wouldn’t be all in one place, and I recently learned from an entirely unrelated source that all the world's looms currently produce just about that much fabric of all kinds – every year; so there’s a factoid that may make the task seem a bit less daunting.
** We know this because the utility has been incessantly plying us with folksy, oh-so-family-oriented messages to that effect, since roughly … San Bruno. I despair to think that we ratepayers are probably underwriting that propaganda campaign, as well.
*** thinking of an electric car? Solar systems are expandable, and I’m told that fueling the car is unlikely to require more than a minor fraction of overall household use.
**** I want to thank my former spouse, who’s recently left the installation business, for providing both a telephone primer and significant background materials. It’s one of the better things we’ve done together recently – maybe ‘tis The Season? Anyway, thanks Deb!