But California has net metering, which is a huge, non sustainable subsidy.
Ad absurdum, consider if everyone purchased enough solar for their household to be net zero. The power companies would not be able to charge anything, but need to maintain the grid and provide power at night, cloudy days etc, with capital costs mostly the same as with 24x7 generation.
There's no way power companies would agree to net metering in a free market, so any calculations about the relative cost of solar based on its existence are flawed. It's essentially a calculation of the cost of solar when unlimited battery capacity is provided for free.
That doesn't necessarily mean such a policy is bad; artificially lowering the cost of solar increases production, and increased R&D and economies of scale should make the true break even point come sooner.
But net metering absolutely will need to be wound back eventually - most likely by grandfathering in those that already have their panels, because nobody wants to piss off a bunch of middle class voters by suddenly making their investments underwater.
> Ad absurdum, consider if everyone purchased enough solar for their household to be net zero. The power companies would not be able to charge anything
Untrue. Electric utility tariffs in California include both "Energy Rates" ($ per kWh in multiple tiers based on multiples of baseline monthly kWh usage) and "Minimum Charge Rates" ($ per meter per day, irrespective of usage).
With net zero usage, only the Minimum Charge Rate could be collected. But, given the way tariff setting works, if net zero was common, the Minimum Charge Rate would be much higher than it is now, to cover infrastructure, etc. costs.
The system also includes "standby reservation charges" for energy customers that are also energy generators, but small solar and some other generation systems that aren't selling energy as a primary function and are exporting only "incidental" amounts back into the grid are exempted from those charges under, e.g., PG&E's current tariff schedule. That limited exemption is more defensible as an unsustainable subsidy to small solar (and some other) generators than the basic net zero arrangement is.
I think you're missing my point; if everyone went net zero, and the minimum charge rate increased to compensate, the current payback calculations of solar will go out the window.
If everyone were to buy solar (ignoring production issues) at today's price and technology, the seven year payback rate of the OP would not hold. That's why it is unsustainable.
I think it's unlikely that net metering will be maintained with an increase in fixed rates; eventually the price of power at peak solar will be negative, and it makes no sense to credit households for feeding even more in.
Residents building useless solar panels, overproducing at peak so they can charge their Teslas for free at night, and power companies building massive resistors to burn that power of during the day and coal plants for the night is Kafkaesque.
The right thing to do (long term) is to treat those feeding power back into the grid as commercial customers/producers, where they're compensated and charged based on current market rates. Anything else distorts the incentives significantly.
Edit: And this isn't some pie in the sky theoretical situation I'm talking about - South Australia has already experienced negative power prices at times due to solar, see
> The right thing to do (long term) is to treat those feeding power back into the grid as commercial customers/producers, where they're compensated and charged based on current market rates. Anything else distorts the incentives significantly.
Yes. As pleased as I am to see solar taking off, I see net metering as an incentive to build the industry and bring prices down -- which it is doing -- but one that has to come to an end at some point, maybe not too far in the future.
>But California has net metering, which is a huge, non sustainable subsidy.
Net metering can be a subsidy, but the act of paying for power is not inherently a subsidy, and should continue. There is no reason why people who generate power should not be paid market rate for it.
>Ad absurdum, consider if everyone purchased enough solar for their household to be net zero. The power companies would not be able to charge anything, but need to maintain the grid and provide power at night, cloudy days etc, with capital costs mostly the same as with 24x7 generation.
You're right, this is absurd. You've just declared power generation to be a cost free exercise.
>There's no way power companies would agree to net metering in a free market
I think it's absolutely hilarious that you can un-ironically use the phrase "free market" in the context of defending monopolistic power companies.
The reason why power companies don't agree to net metering is precisely BECAUSE it's the furthest possible thing from a free market (monopoly on infrastructure) and they don't like pesky competition.
> Net metering can be a subsidy, but the act of paying for power is not inherently a subsidy, and should continue. There is no reason why people who generate power should not be paid market rate for it.
I'm happy to talk about this, but you just seem to be looking for straw men to knock down, and are in this thread to push an agenda. My other post, made hours before your reply, says:
"The right thing to do (long term) is to treat those feeding power back into the grid as commercial customers/producers, where they're compensated and charged based on current market rates. Anything else distorts the incentives significantly"
i.e. my position is the exact opposite to what you're claiming, and agrees with your rebuttal to a point I never made.
> You're right, this is absurd. You've just declared power generation to be a cost free exercise.
No, net metering does that (more specifically, grid maintenance, and backup power generation). Which is my point.
>"The right thing to do (long term) is to treat those feeding power back into the grid as commercial customers/producers, where they're compensated and charged based on current market rates. Anything else distorts the incentives significantly"
i.e. net metering.
Position #2, which contradicts position #1.
>There's no way power companies would agree to net metering in a free market
>my position is the exact opposite to what you're claiming,
Correct. Also the exact opposite of what you claimed elsewhere.
>with your rebuttal to a point I never made.
"There's no way power companies would agree to net metering in a free market" = a point you made.
If your point was actually that net metering should not be a vehicle to deliver subsidies... well, you probably should have been more clear about your point, and if so, should be discussed only in the context of other subsidies and tariffs (e.g. heavy coal and natgas subsidies).
Ad absurdum, consider if everyone purchased enough solar for their household to be net zero. The power companies would not be able to charge anything, but need to maintain the grid and provide power at night, cloudy days etc, with capital costs mostly the same as with 24x7 generation.
There's no way power companies would agree to net metering in a free market, so any calculations about the relative cost of solar based on its existence are flawed. It's essentially a calculation of the cost of solar when unlimited battery capacity is provided for free.
That doesn't necessarily mean such a policy is bad; artificially lowering the cost of solar increases production, and increased R&D and economies of scale should make the true break even point come sooner.
But net metering absolutely will need to be wound back eventually - most likely by grandfathering in those that already have their panels, because nobody wants to piss off a bunch of middle class voters by suddenly making their investments underwater.