A "closed" neighborhood Facebook group began discussing this issue and asked me to join in. I found it much easier to respond to specific questions and statement and by the end of the night I found that I touched on most of the aspects that I've wanted to write about. Afterwards, as this topic has come up, I've wanted to point back to what I wrote in that group. So I'm going to highlight some of that conversation here, removing others' identity and editing for clarity: (Actually I did a lot of editing and rearranging to make it flow more logically.)
Saturday, October 8, 2016
Solar Thoughts
For a few days now I've been trying to express my thoughts on the 4-3 decision by the Provo City Council to implement a new fee on rooftop solar customers. I've responded to a couple of email and talked with several people in person, but I felt overwhelmed each time I sat down and stared at a blank screen to write this blog post.
A "closed" neighborhood Facebook group began discussing this issue and asked me to join in. I found it much easier to respond to specific questions and statement and by the end of the night I found that I touched on most of the aspects that I've wanted to write about. Afterwards, as this topic has come up, I've wanted to point back to what I wrote in that group. So I'm going to highlight some of that conversation here, removing others' identity and editing for clarity: (Actually I did a lot of editing and rearranging to make it flow more logically.)
A "closed" neighborhood Facebook group began discussing this issue and asked me to join in. I found it much easier to respond to specific questions and statement and by the end of the night I found that I touched on most of the aspects that I've wanted to write about. Afterwards, as this topic has come up, I've wanted to point back to what I wrote in that group. So I'm going to highlight some of that conversation here, removing others' identity and editing for clarity: (Actually I did a lot of editing and rearranging to make it flow more logically.)
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All this conversation assumes that solar is a net cost. Why didn't the council insist on a cost/benefit analysis instead of just a cost analysis? I can find 8 studies from states across the country that conclude the opposite of what Provo has been claiming - solar adds value. What say you?
ReplyDeleteFor instance, a review of 11 net metering studies by Environment America Research and Policy Center has found that distributed solar offers net benefits to the entire electric grid through reduced capital investment costs, avoided energy costs, and reduced environmental compliance costs. Eight of the 11 studies found the value of solar energy to be higher than the average local residential retail electricity rate: The median value of solar power across all 11 studies was nearly 17 cents per unit, compared to the nation’s average retail electricity rate of about 12 cents per unit.
A 2015 cost-benefit study of net metering in Missouri by the Missouri Energy Initiative found that even accounting for increased utility administrative costs and the shifting of some fixed expenses, net metering is a net benefit for all customers regardless of whether they have rooftop solar. The study used values for two kinds of costs and two benefits and concluded that net metering’s “net effect” is positive. The typical solar owner pays only 20 percent less in fixed grid costs and costs the utility an estimated $187 per interconnection. Meanwhile, solar owners benefit the system through reduced emissions and energy costs.
Likewise, a study by Acadia Center found the value of solar to exceed 22 cents per kWh of value for Massachusetts ratepayers through reduced energy and infrastructure costs, lower fuel prices, and lowering the cost of compliance with the Commonwealth’s greenhouse gas requirements. This value was estimated to exceed the retail rate provided through net metering.
In yet another study, researchers at the University at Albany, George Washington University, and Clean Power Research have found that solar installations in New York deliver between 15 and 40 cents per kWh to ratepayers. The study noted that these numbers provide economic justification for the existence of incentives that transfer value from those who benefit from solar electric generation to those who invest in solar electric generation.
Regulators and utilities need to engage in a broader and more honest conversation about how to integrate distributed-generation technologies into the grid nationwide, with an eye toward instituting a fair utility-cost recovery strategy that does not pose significant challenges to solar adoption.
What say I? Two things: First, you can find studies finding anything you want to find on any hot topic. Second, this is due, in part, to the difficulty in quantifying the value of non-monetary things. What is the value of clean air (in 2016, non-inflation adjusted dollars)? How much is reducing our fossil-fuel carbon emissions worth? It is difficult to convert values into monetary value, and the number selected will have a large impact on "findings" of these studies. It's easy to say that clean air is priceless, but when applied to these studies, that statement would justify the cessation of nearly all human activity.
DeleteThanks for your interest in the topic. I did not get an answer to the question however. Let me try again: When so many studies show value of Solar as a community investment, why do you think the UMPA consultant only talked about how to set rates to maintain a profit?
DeleteHere is my study of the value of a hamburger: If I was starving in the middle of the ocean and needed to hold on for one more day to be rescued, I would be willing to pay at least $12 for one. Therefore, hamburgers are worth $12, even though I can buy one for $2 from a fast food joint.
DeleteMany studies show a large value for roof-top solar because they are looking for a large value. They find that value by assigning a value to non-monetary, external benefits of solar (see my previous reply).
Finding the "value of solar" was outside the scope of the Cost of Service study. If you dive deeply into the report you will see that the consultant was very clear that rates and rate structures are set based on public policy, which should be informed by the cost of service, but also by the community values.
Demand usage may not be here yet, but size of service is. The infrastructure cost line item could be based on size of service until demand usage meters are installed.
ReplyDeleteInteresting idea. So people would be charged based on the size of the meter that they are connected to? Or the capacity of their electrical panel? We recently changed the sewer base rates on commercial customers to be based on the size of their water line going into their facility.
DeleteWould this 'infrastructure cost line item' be assigned to all users? Non- solar customers might need a higher charge because they 'demand' all the time. Solar customers do not demand all the time, they add back much of the time. If you think about how much each type of customer is 'on the grid', maybe attention should be paid to the customer group who is 'putting wear and tear' on the infrastructure 100% of the time....I am hoping you see this as a ridiculous idea, since it is. To focus on this idea of COST all the time masks the value that solar customers ADD BACK. I cannot wrap my arms around why solar generation is not seen as a positive, as adding to the amount of clean power that is available, of reducing loads or rolling brown outs. Are the utilities throwing so much COST info out there that they are training us not to keep our eye on the ball? (Solar customers invested money that the utility does not have to. I could go on...)
ReplyDeleteLet me keep to the water analogy from the last comment. Imagine a small farm that uses drip irrigation that runs 24/7 and a fire hose manufacturer who randomly tests one hose a month for quality assurance. Imagine that they both use the same amount of water each month, but the farm can be served by a 1" water line whereas the manufacturer needs an 8" water line to provide enough flow to test the hose. The overall water usage is the same, but the demand of the manufacturer is much greater. It should be obvious that the manufacturer costs much more in infrastructure to serve. The wear and tear on the 1" water lines from continual usage really doesn't compare to the cost of providing the infrastructure to deliever a large flow of water to the manurfacturer when it is needed.
DeleteThe weakness in the analogy is that the manufacturer adds value to the system when there is a fire and the hoses full of water are needed. The investment pays off when there is a fire. A calculation to consider the value should be part of the computation. Admittedly complex, it can not be ignored. Similarly, the value of added electricity by Distributed Solar Producers should not be left out of the conversation as it is in Berg's 'study'. It is the difference between a 'cost analysis' (Berg's one sided approach) and a 'cost/benefit study' (a more balanced approach which would take into consideration the complication presented by many distributed solar generators.)
ReplyDelete