Furthermore, the energy distributed generation produces during the day is actually more valuable to the grid (daytime electricity is generally more valuable than night time with rate prices being an average).
The energy world is a complex place with plenty of incentives to go around.
Between 15% and 35% import duty on Chinese solar panels.
I don't know if that covers 100% of their externalities, but I'm sure in terms of "taxes paid for externalities caused" they are WAY ahead of any carbon industries now.
This probably wipes out most subsidies too.
In 2013, the average load on the electric grid only stayed in a 2 gigawatt band from midnight through 6pm. When there wasn't much deviation, nat gas combined cycle plants (or nuclear, or coal) can run most efficiently. But by 2020, the growth in solar production in the middle of the day will cause dispatachable power plants (nat gas combined cycle along with nat gas turbines) to deal with a change of 13 gigawatts between 4 pm and 8 pm. This is a huge change in a short amount of time. Thank kind of ramping of power plants is not efficient.
Also note in the graph that the highest system demand occurs at about 9pm. That means that solar does not help cover the highest demand. In this situation, solar does not help reduce the amount of power plants and it leads to the increased use of less efficient (and faster acting) power plants. So while solar seems cheap, it leads to other costs if you want to keep the lights on.
Currently, as I understand, practically all residential PV coming online is grid-interactive without battery backup. The power companies actively oppose homeowners installing battery backup systems, because they're concerned about people charging their batteries using cheap power at night, and then selling that power back to the utility during the day. In some cases they have refused to approve PV installations with battery backup for this reason.
As a homeowner, I would find a system with battery backup to be more attractive than one that's useless in a power outage (though, granted, significantly more expensive, depending on capacity). While I understand the utilities' concern, I think there has to be a solution. Doesn't it stand to reason that with all this PV coming online, power prices in the middle of the day should drop, even below nighttime prices? And the prices should be highest on summer evenings? And that such a pricing pattern would supply the correct incentives to owners of PV systems with battery backup?
I'd love to see some numbers as to if this would actually be better.
This is because daytime (especially summer daytime) electricity has a greater profit margin, and power companies demand the right to engage in monopolistic price discrimination.
If power companies charged the same mark-up on electricity at all times of day they wouldn't care if you charged batteries at night and used during the day (and it would probably stop being cost effective, too).
>While I understand the utilities' concern, I think there has to be a solution.
The solution is to treat utilities like utilities again (e.g. nationalize them / regulate more strongly). Privatization and profit seeking behavior in a monopolistic market are responsible for this gross market distortion. They are also the reason why the electric grid won't be upgraded to accommodate solar and wind.
The very fact that there could be somebody out there fighting against green technologies using lobbyists because they are too successful for their liking ought to make every American sick.
Dumping lots of solar power during the day makes usually efficient power generation inefficient.
When dealing with countries with a majority of coal-generation (like mine), it's even worse because they can't idle a coal plant, so they just keep it spinning and sell the power at a loss. This drives up the cost of the power for other times to subsidise the loss, and makes the overall market distorted. This then makes large scale capital investment for base load stations risky, meaning that grid instability is a given issue for the future.
The hand-wavers will say 'just use grid storage' - but the truth is that this is an order-of-magnitude more expensive than conventional generation.
When the push for design of energy generation stopped being an electrical engineering issue and became a social engineering issue, the seeds of the problem were sown.
The day when extreme cold or extreme heat shuts down a grid because of insufficient conventional generation will be the day people will realise.
But that is an entirely different proposition to subsidising purchase and use of solar panels at above-market rates.
I don't think I agree. Fossil fuels have been subsidized for over a century. Are you saying you don't believe renewables should be subsidized to get us "over the hump" until they're a lower cost option? Because I would disagree with that.
We have the opportunity to move to energy that is clean, reliable, and unable to be controlled by a small group of people. We shouldn't just be subsiding it; we should be producing wind turbines and solar flat out like the US produced tanks and aircraft on automotive assembly lines during both world wars.
I've also seen people argue against solar because it means that plant will have to run at variable temperatures, meaning less efficiency. This is also not true because gas stations usually output around 200MW a piece, and when you have 10s of these plants scattered you can stagger their shutdowns, allowing power plant operates to run efficiently longer.
[1]http://media.cns-snc.ca/ontarioelectricity/ontarioelectricit...
From an economic perspective, one solution is to buy home-generated solar power at the current wholesale rate, which changes throughout the day depending on supply and demand. This is usually lower than what consumers pay, although it may be higher during peak periods.
Since we have a natural gas glut right now, this isn't an immediate problem. Gas turbines go up and down in power in tens of seconds. It's an operational inconvenience, not a big problem. Things will get better if the battery guys ever deliver something cost effective at utility scale.
Your example (and the OP's) is from rooftop solar, which is a different market. It's much more expensive than utility scale solar, which is the real winner right now in terms of solar power cost performance. But don't get my wrong, I do strongly support subsidies for solar power, it's benefits are many-fold: less GHG, more energy independence, more money in solar R&D further bringing solar power to grid parity in more and more states and markets.
If you think about it, fossil fuels will fluctuate, but always trend up, they are limited. Solar power will only go down. In a hundred years, I would be surprised if the grid was 100% Solar/Nuclear(fusion power will be only 50 years away, in a hundred years), with geothermal and hydro here and there.
I don't believe there is too much confusion in terms of what alternative energy source work or do not. There are, however, plenty of entities pushing forward their interests.
For a quick run-down on the truly viable alternative sources:
Solar power:
* Works, it's sustainable, it will only get better. It has already reached grid parity in many markets, this trend will absolutely not reverse but continue. * Is nowhere near it's optimal efficiency, has tons of room for optimization of both cost efficiency and conversation efficiency (basically reducing the area required to reach a desired power output). * Requires a grid that is built with solar power in mind. Requires baseload generation, of which nuclear and natural gas are the best candidates (assuming the natural gas glut continues on).
Wind Power:
* Works, proven technology. It has reach grid parity in more markets than solar. * Is nearly at the limits of it's theoretical efficiency. There are pretty much only manufacturing cost and economy-of-scale gains to be had here, which I think really hurts wind power's future unless some sort revolutionary change happens in manufacturing process takes place. * Also needs a grid that plays nice with, with baseload assistance.
Hyro:
* Not much to say here, it's capped, very little room to grow. Extremely economically efficient but serious ecological effects.
Geothermal:
* See hydro, but will less serious ecological effects.
Biomass:
* Total crapfest. Until such time as we can bio-engineer some plant that turns sunlight directly into petrol or the like, biomass offers a a net gain to carbon emissions, especially in the case of corn. Sorghum/Sugar Cane is more interesting but hasn't panned out as of yet, mostly because of it being picky where it grows (it seems unwise to turn rain forest area into sorghum fields in the name of alternative renewable energy).
Nuclear:
* Massive amount of energy in a small form factor. * Potential for very bad accidents. (see: black swan event) * Nuclear proliferation concerns, nuclear waste to manage. * Decent economic efficiency. * Nuclear has a niche but can hardly be the world's power source. Would you want every country to be full of nuclear plants, including those whose governments change monthly, are prone to extreme corruption, etc. There are plenty of trade groups they are lobbying for support of "safe" nuclear technologies such as Thorium based breeder reactors, but the truth is these designs are almost entirely vaporwear, and have faults and dangers of their own.
I feel rather strongly the solar is the way forward, with nuclear in stable well-regulated countries for base load, with natural gas/hydro/wind/geothermal filling in the rest.
Meanwhile, me I live in corn country. And yes, biomass is a total crapfest, but it's extremely popular with the legislation around here because a lot of moneyed interests stand to make a whole lot more money by convincing legislators to subsidize it. And it's easy enough for them to complete the deal and sell it to the public by choosing a green color scheme for those "10% ethanol" stickers they put on gas pumps. Witnessing those shenanigans firsthand is what makes me extremely suspicious of any forms of subsidy. Excise taxes certainly aren't manipulation-proof, but they seem to be much more resilient to it than subsidies are.
Fuck subsidies. I believe solar/Nuclear/fusion(heh) will rule the future with or without them. Subsidies tilt the market to and fro without a care about reality, often supporting the wrong ticket.
Which means that if there is a market distorting subsidy to one market that you hate (e.g. coal/fracking at the federal level), often the only way to deal with it is create a subsidy or tariff in another (e.g. solar at the local level) as a counter-distortion.
It's also worth bearing in mind that "fuck all subsidies and tariffs" and "let free markets rule" are ideas pushed by carbon-industry funded think tanks (e.g. CATO) when it serves their agenda, but is swept under the carpet when it doesn't (the only solar panel tariffs CATO complained about was the feed in tariff).
Some examples:
Tidal tech here and now:
http://energy.gov/articles/maine-project-launches-first-grid...
http://www.theday.com/article/20130331/NWS01/303319909/-1/NW...
Near future:
More:
The U.S. Navy has committed to get half of its energy from renewable sources by the year 2020. One element of that strategy will be looking to extract energy from tides, currents and waves:
http://www.washington.edu/news/2014/10/24/u-s-navy-awards-8-...
I also think you failed to mention that nuclear is too expensive. That's why places like France (who have had success with nuclear in the past) are transitioning towards alternative energy (like offshore wind) instead of building new nuclear plants.
http://cleantechnica.com/2012/03/26/nuclear-power-too-expens...
More sources of evidence that show why nuclear is too expensive:
http://v1.apebble.com/static/clean/CSI_Nuclear_Power_Fact_Sh...
http://www.smh.com.au/federal-politics/society-and-culture/n...
http://www.forbes.com/sites/jeffmcmahon/2012/03/29/exelons-n...
http://www.ucsusa.org/nuclear_power/nuclear_power_and_global...
http://www.psr.org/resources/nuclear-power-factsheet.html
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
We really don't need to build new nuclear plants to transition and we should work to responsibly phase them out over time. Here's results from a Stanford researcher whose study shows the world can be powered by alternative energy in 20-40 years:
http://scienceblog.com/65427/the-world-can-be-powered-by-alt...
More:
Mark Z. Jacobson - Energy Policy
http://web.stanford.edu/group/efmh/jacobson/Articles/I/JDEnP...
Here's for New York (with more numbers):
http://web.stanford.edu/group/efmh/jacobson/Articles/I/NewYo...
http://news.stanford.edu/news/2013/march/new-york-energy-031...
Jacobson doesn't just throw numbers around, he makes some very salient points along with strategies as well.
We should also factor in advances in decentralized battery storage that are bound to offset current baseload issues. For example, breakthroughs in graphene production, etc.:
http://delta.tudelft.nl/article/making-graphene-affordable/2...
Note this is personal experience with my cash purchased system, as I'm not a fan of consumer debt. Any time a company makes more money off the 'financial products' they sell than the actual physical products or services they sell, you're probably better off paying cash.
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.
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.
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
http://cleantechnica.com/2014/10/23/negative-electricity-pri...
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.
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.
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).
http://www.cleanenergyauthority.com/solar-rebates-and-incent...
There are plenty of other incentives and subsidies as well (http://www.cpuc.ca.gov/PUC/energy/solar) including writing off equipment costs against property taxes (http://www.dsireusa.org/incentives/incentive.cfm).
The significant thing that is making solar installations attractive to consumers currently are the many zero down options including leasing and lease to own on a lien against your house.
It's growing! I'm personally working on sales software to reduce customer acquisition cost. The bottleneck in the future is going to be order fulfillment.
edit: formatting, new here..didn't know anchor tags are disallowed
Would anyone accept that increasing gas taxes to give Tesla owners a cash payment is an ethical proposition?
The people most affected by increased electricity prices are the poor. These are the people most unlikely to have solar panels.
I'm all for allowing people to put their money into whatever they want. I am against subsidies for solar or any other energy, when those subsidies are paid for by the other users. It is very unfair on low income households.
If you want to see where solar panels have really taken off, you should pay a visit to the third world where the US government isn't subsidizing them.
It's pretty much just that and diesel generator, in fact.
Global climate change impacts the poor the harshest. They're the least able to cope with it, and can least afford the long-term impact economically and to their food supply.
The subsidies to solar assist in building out the long-term technology/energy innovation and infrastructure necessary to combat climate change. Those investments must be made, because we're not going to just magically wake up one day with extremely effective solar, we have to build our way there gradually through university science, commercial R&D and product deployment.
I'd argue that the wealthier people buying these panels are paying their fair share of the overall cost when it comes making the energy shift possible, and were even more so in decades past when it was far more expensive and far less efficient. The top 20% pay something around 70% of all income taxes; the bottom ~15% have a negative tax basis; so the wealthy are largely funding the tax credits that they're claiming anyway.
The contribution the poor are making in very slightly higher electricity rates, is their fair share of contribution to the solution of climate change. No different than any other product build out in history, in which the rich subsidize most of the expense of new technology, but poorer consumers also have a role to play as prices come down.
It's also worth noting that in the US at least, the poor often have subsidized utilities. It's the middle class that is actually taking the bulk of the cost hit you're referring to, not the poor.
'Very slightly higher electricity rates', 'fair share of contribution to solution of climate change'
The fact is, household solar panels has - rounded off to the nearest whole number - 0% changed the amount of co2 emitted in countries like the United States. This is because there has been no change in gas or coal power generation as a result of solar panels. The entire contribution of solar is still less than 1%.
Meanwhile the UK government started collecting statistics on fuel poverty and some areas had 15% fuel poverty - mainly in unemployed households in rented accommodation. This number has doubled since 2005, when 'fight global warming' policies by interfering in the energy market became popular and energy prices have doubled or more.
It's incomprehensible to me that anyone can say 'pay more, suckers, I got mine!' when we are talking about energy for people to keep their homes habitable. And all this for an ineffective response to a far-off problem.
I cannot fathom the popularity of such thinking, when the same people, if presented with any other taxation or cost increase on poor people to subsidise consumption of rich people - would say that it is unthinkable.
It takes 'suffer in silence, it's for your own good' thinking too far.
"If you are stating that current poverty should be made worse ... "
Raising electricity prices a fraction of a percent on poor people who are already receiving subsidized utilities, is not making their poverty worse. As you noted, solar isn't widespread, and thus is obviously not raising electricity prices in a meaningful way.
The price of coal moving up or down 1% does more to impact the price a poor person pays for electricity than all of the solar tax credits in the first world combined.
It's clear that the poor in the US are not going to pay a lot more for energy. They're going to receive higher subsidies from the welfare state to compensate for any price increases. Given the poor are already running a negative tax basis, it's accurate to say they're not paying for electricity at all to begin with. And to make this point easily clear: show me the negative tax basis of the average poor person in the US, and then show me the average poor person's electricity bill.
If one actually cared about the poor and their electricity bill, the only meaningful place to start is the Federal Reserve, putting an end to their 40 year debasement of the US dollar and this chart that it has caused:
We are in agreement about the Fed. Only the debasement goes back further than 40 years - that was merely the acceleration point.
NOBODY is suggesting that.
If you want to fix poverty in the United States, there are several very straightforward ways of doing this - bolstering SNAP, extending medicare, raising the minimum wage, building social housing and creating a job guarantee (as was done during the last depression).
These are, incidentally, all things that anti-solar groups like ALEC are also usually against.
Added to which, solar panels are actually the only form of power generation which is within the reach of poor people, which is why millions of people in the third world are taking advantage of it. Give 0% credit for it (as is available to all big banks in the US to play their gambling games) and literally everybody would be rich enough to take advantage of it.
I'm not going to comment on all your other suggestions - that's not the point I want to make. That point is - making poor people pay more for electricity so that rich people can get a rebate is just wrong. There is no justification for it. To fix things, first you have to stop making them worse.
I am absolutely for removing all subsidies for all forms because I am confident that solar presents a much better value. But ask a politician to suddenly start charging fossil fuel users for our wars and pollution and they'll instantly pull out the line that "raising prices hurts the poor".
So subsidizing solar is just more politically feasible. It is certainly not the best solution but reversing a 100 year old industry is basically not going to happen. So if we don't want solar to be at a disadvantage (which would strike me as immoral given the value it offers) we basically have to subsidize it.
But soon, unsubsidized solar will be cheaper than our indirectly subsidized fossil fuels. The raw panels already only cost $4000 or so for a 5kw home system, and great effort is underway to reduce the cost of installation and inverters.
It is unfair to ask non-fossil fuel users to live in a world polluted by fossil fuels, but nobody ever asked us about that one.
It kind of already is, which is why the fossil fuel industry panicked and got Obama to slap tariffs on cheap Chinese solar panels.
Yes, I would accept that. In fact if you consider that we are giving Tesla owners a cash payment when they buy the car, a lot of people accept that proposition.
I'm not sure why you think that the people most affected by the increase in electricity prices are the poor. Sure, poor people are more susceptible to all price increases, but is electricity worse than food? Or even gas? Note that your electricity bill is heavily dependent on the size of your house. My current electricity bill, all in, is $50 a month. I live in a 1 BR in NYC. Back when I had a 3BR condo in CT, it was $150-$350 a month. The size of the house factors in a lot. I imagine most poor people don't have bedrooms to spare that they spend a bunch of money air conditioning in the summer.
I do know that many low income areas are right next to highways, and that pollution from gasoline powered cars impacts the health in those areas greatly.
So if you want to talk about ethics, I think it is very ethically appealing to incentivize people to reduce emissions that are likely harming people near highways a lot more than a slight increase in electrical bills or gas taxes.
The cash payments for Teslas are just wrong. Subsidising the purchase of wealthy peoples cars using taxpayer money is indefensible IMO.
If I change the vehicle from a Tesla to a turbo diesel BmW SUV, is it still ethical? The X5 has lower emissions as well.
Added to which, subsidies are how almost all countries build up their industries which provide jobs and wealth for all. China didn't get rich by letting its currency float and letting free markets reign.
That isn't to say I'm a fan of Ameren. They get up to their own shenanigans, just not these particular shenanigans. I suspect the reason they don't care about this is that it's a perfectly PUC-acceptable reason to raise rates for everyone else. At a co-op with voting members, however, that maneuver isn't so easy.
Surely the economics of the situation dictate that if everyone who didn't have panels had panels, it would be even cheaper, given we are not going to run out of silicon.
If there are less/no customers of the power company, there aren't as much/any funds for those payments.
Not true any more, not that it ever really was, is just a lot cheaper to do now - http://www.aquionenergy.com/
The utilities will change, but I doubt they'll disappear.
That might actually be good in the long run. Part of the actual cost is the maintenance, and installation. Most of the solar power fanatics fail to count all the costs in their calculation. With a large scale utility those things are all in.
There is not really much to maintain in a standard residential solar installation as there are no moving parts. Except for the panels. They need to be kept clear of debris, dust, shade, snow (depending on geography).
It is my understanding that SolarCity does NOT maintain the surfaces. They will let you know of current degradation or fluctuations but it's up to you to debug / clear the problem.
In places with non-optimal solar climate I imagine that clearing the snow will be a pretty labor intensive job?