Tony Clifford unravels the myth that solar customers shift costs to non-solar ratepayers. When you look at the data, it turns out that solar customers benefit the grid and create huge savings.
Solar panels at the Nellis Air Force Base, Nevada (Photo by U.S. Air Force Airman 1st Class Nadine Y. Barclay, edited)
Certain anti-solar forces are spending hundreds of thousands of dollars trying to convince everyone (though the popular press and consumers are the main targets) that solar customers are stealing money from non-solar customers.
The argument is spurious at best, disingenuous at worst and absolutely 100 percent false. But despite the overwhelming evidence to the contrary, public-utilities commissions and governmental entities insist on studying the subject to death.
In a nutshell, here’s the argument the utilities want to prove: Solar customers, by consuming their own energy, are avoiding paying for upkeep on the grid, which (in this argument) means those costs shift to non-solar ratepayers.
Frankly, it’s a compelling sell. If I didn’t know better, I’d probably resent solar customers, too. After all, why should solar customers get the grid for “free” while I’m paying for its upkeep?
Now that they’ve got your dander up, the utilities go in for the kill: This freeloading scenario demands that they charge solar customers special charges (monthly fixed charges, solar tariffs, etc.) so equity for all ratepayers can be maintained. Unfortunately, there is little evidence to show their claims are true.
In fact, 16 states have commissioned cost-benefit analyses on whether having solar consumers on the grid negatively affects non-solar customers (the list misses the studies in South Carolina, Mississippi and Louisiana). Only one study has given even the hint that ratepayers are harmed (Louisiana), and that study was done by a firm so closely tied to the fossil-fuels industry as to be easily discounted.
And yet some states refuse to believe the evidence of their own studies. In recent years, Nevada commissioned two studies that showed solar is a benefit to all consumers. Earlier this year, they commissioned a third study in the hopes that it would show something different.
We’ve seen the same pattern in other states where the fossil-fuel interests are so entrenched that they can fight tooth-and-nail to keep their monopoly power on electrical distribution. Let’s take Maine for an example.
According to the independent consulting firm Crossborder Energy, having solar on the grid in Maine cuts electricity prices for everyone by reducing peak demand on the grid and its associated power plants. The 20 MW currently installed in Maine will save all electricity customers an aggregated $45 million in direct payments alone, not to mention the $17 million in savings thanks to other solar attributes and the estimated $58 million savings from reducing pollution in the state. If the state legislature had passed a clean energy bill that would have increased the state’s solar capacity to 250 MW, the savings balloon to $775 million.
But Maine Gov. Paul LePage insists solar customers want a “reverse Robin Hood” deal, taking money from the poor and giving it to “rich” solar owners, despite all the evidence to the contrary (two studies—one in 2014 by the state’s environmental office and the 2016 one referenced above—prove otherwise). So the battle in Maine continues while a once burgeoning solar market goes dormant.
Here’s a reality the utilities don’t want to face: No matter how many times they attempt to force different outcomes by demanding more studies, the studies consistently show having solar on the grid is a net benefit to everyone. In other words, their arguments are consistently shown to be false.
Tony Clifford is the Chief Development Officer at Standard Solar Inc. He began his career at Solarex Corporation and has since worked for three high growth technology companies that were acquired by major corporations. He was awarded the 2011 Industry Leader Award by the Maryland Clean Energy Center (MCEC), for his contributions to the advancement of solar and other clean energy resources in the state.
This article has been republished with permision from Renewable Energy World.
The illustration is curiously of a solar installation at Nellis Air Force Base. It’s curiously inapt. For the Air Force has to run anyway. Ultimately citizens have to meet the entire costs of the US Air Force, directly or indirectly. If it does not generate its own solar power, it has to buy it from utilities. However, in this case the power will be mostly utilised on site.
The author totally misses the point.
Dirty energy users should pay more (or at least less than RE users) because they are the ones who are loading society up with externalised costs such as ill health due to local pollution or damage caused by global climate change.
In that sense it is they are who getting the free ride.
There are those for whom the Earth is so flat, that they cannot see the facts, even if they are very obvious. The facts fall outside their paradigm.
We have a 18 PV panels and a convertor of 4kW, which means we have to pay 323,28 euro to use the grid in the region where I live here in Belgium. I cannot say whether or not this is a fair amount, but I do understand the logic.
New homes in Belgium will have to become almost energy neutral. Obviously, lots of owners will choose to integrate PV in their projects. In my neighbourhood, several new homes are being built, and off course there has to be gas and electricity infrastructure in the groud. Who will pay for this infrastructure if the “prosumer tariff” as it is called here, doesn’t exist?
You write: “Solar customers, by consuming their own energy, are avoiding paying for upkeep on the grid, which (in this argument) means those costs shift to non-solar ratepayers.”
and:
“having solar on the grid in Maine cuts electricity prices for everyone by reducing peak demand on the grid and its associated power plants.”
So you are comparing the cost of putting cables underneath the streets with savings from lower electricity prices? I don’t think we live in a world anymore where one state-run company is responsible for the grid and electricity generation?
Bottom line: who will pay for the grid when my electricity meter says that I’ve used 100kWh in an entire year? Can you answer this question?
@ joris:
” Who will pay for this infrastructure if the “prosumer tariff” as it is called here, doesn’t exist? ”
These are dead assets like city walls,-gates and ice houses from medieval times.
Or “toxic assets” as the Sueddeutsche writes about atom power:
http://www.sueddeutsche.de/wirtschaft/kernenergie-wie-siemens-doch-wieder-zum-atomkonzern-werden-koennte-1.3221186
Craig’s FIT Surcharge article indirectly explains how too many solar customers can potentially harm non-solar customers. It’s relatively easy to understand that if 25% of consumption isn’t paying the surcharge (or alternately grid fees) then the surcharge/grid fees will have to go up for the 75% of people who do pay.
http://energytransition.de/2016/10/german-renewable-power-surcharge-increases-by-8/
The solution is simple! Force the electric utilities to decouple the price of service from the price of power. Once the price of service is computed, charge EVERYONE that charge for connecting to the grid. Then additionally charge for the price of power consumed. This way, no one is subsidizing the infrastructure for another ( everyone pays equally ) and those who install solar get to benefit from their investment. Simple.
@Joris: Although the article does not mentions it explicitly, it is about the US. There they have in many states still vertically integrated monopolies, and in (almost?) all states a retailer monopoly.
Special tariff rebates are planned in Australia to keep private PV producers grid bound:
http://www.pv-magazine.com/news/details/beitrag/australia–network-lobby-proposes-special-tariff-to-keep-households-on-grid_100026679/#axzz4OIezDL38
Would you believe it ?!
Two or three years ago the opposite was demanded: extra high tariffs for PV owners. Well, by the polit-clowns that was, not by the utilities.