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Comment by Slevin11 | Hacker News Reader

Agreed. I live in the CA, and am a homeowner. I love the efficiency of heat pumps. I have a high personal incentive to install cool efficient tech. I have the 20k lying around to install a heat pump (or 5-7k for a mini split). Yet I will never install a heat pump, because PG&E is running a racket on electricity prices. In fact, I’m considering instead installing a new wood stove / masonry heater.

CA needs to get its incentives aligned to meet any of these goals. You want people to electrify? Just make it cheaper to run in the long term, and everybody will just do it by default.

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On top of this, the CPUC lowered incentives for solar last year:

https://calmatters.org/environment/2023/11/california-solar-...

California was paying rooftop solar owners far too much. Poor people who couldn’t afford solar were subsidizing the grid for solar owners.

Yes, this is what the CPUC said but was a ridiculous argument in favor of raising profits moreso than helping lower income people.

The climate should take precendence over everything else. Incentives for rooftop solar should increase, incentives to help lower income people should increase, electricity record profits should not be a thing.

This is entirely due to regulatory capture, not some "good will towards poor people" that the electricity industry is pushing.

It doesnt make any sense to force utilities to pay retail prices for electricity when wholesale prices are 10x lower. There are much more efficient ways to encourage renewables.

Net metering actually increases both costs and profits.

Power companies have a fixed margin of 10% and a captive market.

If power costs them $1, they make $0.1. If power costs them $5, they make $0.50.

Rooftop solar costs 10X what commercial solar does. Every kw of rooftop power they buy means 10kw of commercial solar isnt built.

> electricity record profits should not be a thing

Unless the electricity consumption is falling faster than inflation, I'd expect the regulated-profit electric utility to be having record profits essentially all the time.

> The climate should take precendence over everything else.

That's an argument for moving from rooftop solar subsidies into storage subsidies, because its already at the point where renewable output sometimes exceeds 100% of demand. (And the strong solar mandates will contnue to add supply without subsidy, especially—and this adds to the pile of reasons that this needs to happen—if housing construction stops being held back by zoning constraints.)

I guess they fixed the glitch by moving to income based utility bills

Which is simply a hidden tax hike, and a wild market distortion.

which is basically incetivizing even more electricity usage by subsidizing large electricity users and punishing electricity savers.

there's nothing more evil than forcing people to pay flat rate for services (electricity) that we should all be cutting back on, not using even more.

The proposal is to set the fixed portion of the bill to vary with income. The usage portion is still billed per kWh.

California CPUC is out of control.

They wanted the state to impose a tax on people using solar panels.

https://krcrtv.com/news/chico-residents-on-possible-solar-pa...

Solar net metering is a weird subsidy. The solar panel owners are not paid for the full value of the electricity they provide. The utility is not paid for the full value of the electricity distribution they provide (you can pull 240V x 200A on demand).

Net metering can only form a small part of the retail market before the fixed costs of distribution get concentrated on remaining customers in a death spiral. A population that is generally less able to take advantage of tax credits (because their tax liability is not high enough), and has less access to capital in the form of homeownership or financing for the solar system.

This is analogous to the "problem" of fuel efficient car owners paying less fuel tax. Some states have added higher registration fees on hybrids and EVs to offset the "lost" revenue. Another similar situation is water utilities that encouraged efficiency through higher rates. Customers saved water and then the utility had to increase per unit rates to maintain enough baseline revenue to cover fixed expenses of maintaining the distribution network to every home.

I don't think that is correct. With net metering residential solar owners are overpaid for the value of their power. More than commercial solar plants selling at the same time.

Homeowners may get paid less than their panels cost, but rooftop solar is tremendously expensive and there is no way that it would recoup the cost at actual market prices

It's somewhere in-between: residential solar, when feeding back into the grid, is only using a small fraction of the transmission compared to a commercial solar plant (in terms of length of wiring and number of transformers used to transmit a given amount of power). In fact, it will generally be (unless in a neighbourhood where nearly every house has solar installed) reducing the overall load on the grid. So it's not reasonable to expect that the value of that electricity is the same as that of the same amount coming from a large utility, but it's still probably not worth retail prices, either (though maybe it is, in certain circumstances. In cases with a very overloaded grid it may conceivably be worth more!)

the grid is a fixed cost, which is needed unless we are willing go without power every night and winter. Once it is in place, it costs the same if it is sitting idle or being used.

There are absolutely no savings from an unreliable local power source.

PG&E is charging you to pay for wildfire lawsuits and to bury power lines so that people can keep building cities in forests.

The state should pay for that out of general taxes rather that shifting the economic incentives of power use

IMO the state should have forced PG&E into liquidation, bought all the assets, and converted the whole mess to a public utility. It would surely take some time to learn how to operate PG&E’s disaster of a system, but it’s not as though PG&E can competently operate its own system right now.

I hated this idea at the time, but have come around to it. Im fairly libertarian, but understand that competition is difficult for the power distribution network.

As much as I think the state is inefficient, a cost plus regulated monopoly is even worse. Municipal power companies in CA run $0.10-0.20 per kwh, while PG&E is $0.40-0.50 cents, and going up.

It would be amusing to require PG&E to match the average rates of the municipal utilities plus 10%. And then liquidate them when their stock goes to zero as a result :)

Which leads to opening up a whole nother can of worms regarding forest mismanagement and lack of controlled burns.

They are also regulated to have a 10% profit margin, so that only way to increase revenue is to drive up costs year after year.

How is a mini-split $5-7K in the US? A 6kW Mitsubishi Electric mini-split is $1800 (US$1200) here in Australia and you’ll pay another $650 (US$420) to get it installed… My 5 kW air to water heat pump was about $6K (US$4K) before a $900 (US$600) rebate but they are less common here so I think still cost a bit more than in Europe or the UK.

Yeah so basically the guideline here is 25 btus per sqft, which is 270 btus per m2, house is 110ish m2, so it’s roughly 30k btus. So then get a 30k btu condenser, about $3400, plus three 12k air handlers ($600 each or so), plus labor and the rest of the random parts. Could be overkill, I’m just following guidelines for the estimate.

HVAC companies bid as if they're entitled to $4K of labor/profit for a half-day of on-site work. It's maddening.

Im frustrated with HVAC and solar too, but I suppose that as long as nobody else wants to do the work, they are indeed correct.

Indeed. Not helping are all the "get a heat pump installed and receive a $6K rebate"s (which drive up the bid price by around $5K-$6K).

Yep, same story with solar rebates, most of it goes to the installer.

Home construction work is really interesting, because the transaction costs are so high around locating and comparing the service providers.

It is easy to say there isnt enough competition, but im not sure that is actually true. I think more likely is that most consumers dont collect 10+ quotes and compare, so the price signal is weak.

Second biggest issue with California is the contractors licensing system ended up creating a system of guilds.

First biggest is high rents drives up the cost of labor.

>First biggest is high rents drives up the cost of labor.

Tell me about it. I just got quoted 80k to landscape my residential backyard.

For 1 year of my take home salary.. I'll do it myself.

Yeah 40k of that 80k goes to the workers landlords.

Would you say HVAC companies are more or less "entitled" to that labor/profit, compared to, say, a company that prints business cards for those kinds of small businesses?

Any business is entitled to the profit they’re able to compete for and satisfy their customers, HVAC, lending, printing, whatever, even selling pictures of your butthole on the internet.

When regulation serves to limit via licensing and multi-year apprenticeships is where you get into market distortions that sometimes serve consumers and sometimes harm them. This happens to some degree in licensed trades (price out a drywall crew, painting or carpet [not licensed or at least licensed without apprenticeship in most places] vs a plumber, electrician, or HVAC).

Part of the problem is that buying refrigerant requires a certification/license.

Also in Seattle, only an HVAC company can pull a permit for refrigeration, even though plenty of heat pumps/mini splits are pre-charged and you'll never need to touch refrigerant.

The EPA 608 universal takes about 90-120 minutes online and is free at SkillCat (no affiliation, but I tossed them $50 as a thanks). The 609 (for autos) takes way less time but costs $25 online.

I’ve bought refrigerants online several times over the years without showing any license (even though I hold an EPA 608 and 609). It’s legal to buy for resale, which is probably how suppliers get around checking.

How do you get it installed for $420? You can barely get an HVAC technician to come and say hi for $420 in California.

It's a pretty big market here I guess - this is for a simple installation, of course, with the mini split on a wall back to back with the external wall, running the piping down and hooking up and gassing. But that's about the standard price everyone was charging for that when I put my last one in two years ago. If you were putting in a ducted system obviously it would cost more.

Charged around 1.5k AUD for a recent back to back install in Melbourne. Tradies have bumped up their rates by quite a high margin citing cost of living and with it their profit margins.

You don't. At least not for an install these days. Their data point must have been from a few years earlier.

My experience having installed one a couple of months ago is that the installer charged around 1.5k AUD just for the installation(by my calculation using retail prices) for a back to back "simple" install for the same brand and size mentioned. This is in Melbourne, Australia.

I did get multiple quotes that were the same and this was before peak summer season. The ones that were lower were either not licensed or wanted to do it for cash - meaning they wouldn't declare and pay taxes on it so the customer gets it for cheaper. It also means they won't give you an invoice and good luck claiming damages without evidence.

They blame the high cost of living but knowing some insiders, the margins are huge.

>Just make it cheaper to run in the long term, and everybody will just do it by default

That's how you get exorbitant taxes on the alternatives

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