If you believe burning carbon fuels is a big negative externality, then solar users are subsidizing everyone else.
When the utility puts up capital to build a plant, they are promised a return on that investment over time.
Which doesn't mean it's bad policy! The solar industry needs help to grow. But this sort of thing (utilities ending net metering) is only to be expected. California switched to NEM 3.0 with only 20% rooftop solar adoption. Nationally we are at like 4-5% (but I might be out of date).
https://americanexperimentnd.org/stealing-with-solar-how-wea...
If the energy company is paying you $0.12 to sell electricity for $0.09 - they're losing money. Not to mention, they aren't covering any of the costs of maintaining their network (which is a large chunk of the overall cost).
If they're forced to buy rooftop solar from homeowners at a loss - they are FORCED to transfer that loss onto other costumers - which means the other customers are subsidizing that.
There isn't anything tricky about who is subsidizing whom.
Your issues with "dirty" energy are entirely separate.
The utilities and ISO’s do not argue against this. They want to eliminate NEM 2.0 in favor of NEM 3.0 bc the difference in rates are to then be provided by alternative incentives such as battery pay-for-performance programs.
Disclaimer: I own an energy company that does C&I and Residential energy aggregation and participates in wholesale market energy supply and incentive programs.
If you look into e.g. PG&E's financials, their expenses are dominated by operation and maintenance of the grid, not what they pay for electricity.
You appear to be claiming that the grid fees cover this cost entirely, but they're not high, e.g. $15/mo on some plans.
You're obviously very knowledgeable about the space, but I suspect you may be talking your book a bit here.
Given that they are correcting a "common misconception", I think it's entirely appropriate to ask for a source.
I'm not against subsidies. Germany pushing solar well before it made financial sense, enabling the economies of scale we see today, was one of the greatest wins of public policy in the 21st century. I paid a lot of tax when I lived there and was happy to contribute in some small way to that effort.
But subsidies risk turning into middle class welfare, continuing long after they make sense from a public policy point of view because interest groups form that don't want to give them up.
It's not really, that's the entire idea behind economic externalities. Power generation using carbon sources brings with it a cost in the form of pollution and greenhouse gases not directly paid by the customer. That cost is effectively spread out evenly across society, so those who use less carbon intensive energy are more or less subsidizing those who use more. Or to put it another way, if the folks with rooftop solar were instead just using electricity from coal or gas plants like their neighbors, their neighbors would have an increased pollution/global warming cost even if they don't see it in their electric bill.
Of course the math may or may not actually work out since the net metering costs for rooftop solar are based on electricity rates rather than any pollution based externalities. But the idea that it's strictly an economic transfer from people without solar to those with solar doesn't seem entirely accurate. And the economic impacts of "dirty" energy are definitely not a separate issue.
Distributed generation is great because generation and consumption are next to each other, and this can theoretically reduce peak load on the grid. The problem is that the sun goes down every day at the same time, and we're back to the same peak load.
The lowered rates in NEM 3.0 actually incentivize homeowners to buy batteries and load shift, which does actually help reduce peak load. Batteries are still too expensive, though, and the hope is that falling battery costs make it economical.
Externalities exist, yes, but they only matter when they get priced in. Capital moves energy markets, not vibes.
They spend 0.12 for power that would have cost them much less than 0.12 to generate. The consequence is that they make up for it by charging other customers more.
If you supply a kWh to the grid at midday and then consume a kWh overnight, what should your balance of payments be? If you're getting the wholesale rate during the day, do you also get the wholesale rate at night?
What this is really about is, how should we pay for the fixed costs of the infrastructure?
There isn't an objective answer to that. You could say that everyone pays a fixed service charge and then there is no contribution per kWh, and then the per-kWh rate for retail and wholesale are exactly equal. That's the most economically efficient thing, but then people who don't use a lot of electricity are paying a high fixed fee.
Another high efficiency thing is to use time of day metering, so that the difference between the wholesale and retail pricing is highest when supply is most outstripped by demand. That also gets rid of your problem with solar because then they can get retail, but get retail based on the time of day, so supplying power when it's cheap and using it when it's expensive isn't going to net out.
But charging retail and paying wholesale to the same customers isn't ideal, because those customers also have a choice. If they're getting paid $0.04/kWh for generation during the day but then paying $0.12/kWh or more at night in order to pay for the infrastructure, they might find it more economical to install a battery system locally and then stop buying power from the power company at all on most days. And then they're still not contributing anything per kWh to the fixed costs of infrastructure, but now you've actually made it worse, because a local battery system is going to be configured to align with the needs of the owner rather than the needs of the grid. Instead of incorporating the battery system into the grid so it can dump its full capacity during the nasty part of the duck curve and then fulfilling the lower demand for the rest of the night from baseload generators, the homeowner has the incentive to sell nothing from their batteries to the grid at 7PM (because they're only getting wholesale) so they can have it left to use for themselves to avoid paying retail at midnight.
Then the grid still has to cover its fixed costs from the other customers and can't even affect their usage with time of day metering because retail off-peak is too close to wholesale on-peak.
How does that figure?
I won't even insist you account for second order effects of having the solar panel, just that the consumer is only paying for their net draw of energy from the grid (which has decreased).