# Article on grid defections



## Hasufel (Jun 30, 2017)

Just saw an interesting article on grid defections on slashdot. The basic premise is that with solar being popular and low-cost battery storage solutions on the rise, it's making more sense to "defect" from the grid. Using Arizona as an example, partial defections (where homeowners generate most of their electricity and use the grid as a backup) purportedly will make economic sense as early as 2020, while full grid defections will make sense by 2028. Other "solar-friendly" states like California, Nevada, and New York were kind of lumped into the same category (although when I read that I started singing "one of these things is not like the other..."). Anyway, food for thought--I know some folks here are using solar but has anyone gone completely off grid?


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## begreen (Jun 30, 2017)

Seems similar to landline defections. At some point though that implies that the remaining, smaller customer base will be footing the bill meaning higher rates.


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## jebatty (Jul 1, 2017)

With wind and NG out-competing coal, PV also or soon will be out-competing coal, and in the near future PV out-competing all other energy sources, energy costs should be dropping. Are we seeing rate reductions from the utilities? Also, wind and solar are easily turned "on" and "off." I look at my PV, installed at my capital cost and maintained by me without cost to the utility or other rate payers, as a money-saver for the utility and other customers. My system provides peak power during summer A/C periods, and also briefly during winter heating periods. It should be reducing utility demand for peak power from generating sources. That power is very costly to the utility and I provide that at $0.11/kwh rather than the many $/kwh that the utility pays for peak power. Customer owned PV should be leading to rate reductions, not increases.


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## begreen (Jul 1, 2017)

jebatty said:


> Customer owned PV should be leading to rate reductions, not increases.


The difference being that yours is grid-tied and not defected from the grid. If say half the grid-tied customers defected and that grid was powered by a $10B debt, then the remaining customers are going to be picking up the tab.


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## Where2 (Jul 1, 2017)

Hasufel said:


> I know some folks here are using solar but has anyone gone completely off grid?



Solar = YES, but firmly _attached to the grid_ until my power company makes it unreasonably expensive. At the moment, (just after noon local time), I'm feeding ~1kW back into the grid (for my neighbors to use), while doing a load of laundry on an extra hot "Sanitize" cycle and while the electric water heater is recovering from what the washer is using. My array is actually producing around 3kW at the moment, and the house is using ~2kW between the ceiling fans, refrigerator and other typical electric loads.

If you're wondering how the water heater is using so little power to recover, my city tap water comes in at 77°,and I have a 1500W element as the lower element in my water heater. I intentionally swapped out the original 4500W element to the 1500W element because my house of two doesn't need super fast recovery times. The smaller element runs a longer duration, and that works well to help limit what I'm feeding back to the grid, further limiting my grid impact, no matter whether the sun is up or not.

My 3.5 ton A/C just kicked in. Now I'm buying ~1.5kW from the grid. That's a much lower impact to the grid than the 4.5kW I'd be pulling out of it if I didn't have a PV array on my roof.



jebatty said:


> Customer owned PV should be leading to rate reductions, not increases.


In South Florida, the grid customer base is still expanding as urban sprawl continues, but the power company continues to lobby the state Public Service Commission to be the sole provider of energy whether it comes from nuclear, NG, or solar sources. I see no great rate reductions on the horizon. The power company likes their present distribution of profit to shareholders position.


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## WoodyIsGoody (Jul 1, 2017)

Electricity on the Island of Kauai is provided by a ratepayer owned co-op and they are steadily decreasing their rates in response to the cheaper electricity provided by an ever increasing number of large co-op run solar farms while they reduce electricity generated by oil. But yes, consumer owned solar systems can cause grid rates to rise (particularly in areas that have special net metering incentives paid by the utility). This is good because it drives faster adoption of solar.


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## woodgeek (Jul 2, 2017)

The undiscussed issue is cost.  There are still economies of scale at play....a utility might be able to field a very large PV array, a large stationary battery, get a sweet lease on a brownfield to locate it, and use an optimal (smaller/cheaper) battery size through a cheap (legacy) NG backup system and then...be able to make electricity a lot cheaper than a homeowner can, even factoring in (shortish-range) delivery.

If you were a partial grid defector....why wouldn't the grid charge you a premium (i.e. just less than homeowner genny power) when you do need juice?

Of course, you can argue that it is cheaper to take the bus than drive a car...and most people will take the car.  But unlike that example, electricity from the grid versus your private grid....kinda invisibly different to the user, so long as both work reliably.

I guess I don't see the defecting model, en masse, unless utilities start price gouging, or refusing net-meter arrangements.


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## jebatty (Jul 2, 2017)

I agree that individual en masse grid defections are unlikely, mostly because a large portion of users do not have highly suitable sites for efficient solar at a cost that would encourage defection. A greater defection likely will occur from commercial development of large, commercial/utility scale arrays which have the potential for reducing the cost of electricity as PV cell efficiency continues to rise and storage technology becomes increasingly cost competitive. Not to be overlooked is the fact of near $0 cost of operating a large commercial scale PV array. With an operating life span in excess of 20 years, no equipment and labor to mine, process, transport, store and load fuel, scrub the stack emissions, dispose of waste, and expensive turbine and operating maintenance, PV is very attractive. 

Last week a viewed a 1 MW array installed under a PPA which provides a large percentage of power for a college. No employees present, just clean power being generated with just about nothing for anyone to do. My own 12.3 kW system is the same: just sits there and produces power on a one-time capital cost investment. Some quick calculations based on local utility retail kWh cost at $0.11/kWh shows that retail value of a one acre array is more than $50,000/acre/yr of land coverage and could approach $100,000/acre. Plus, with a little bit of thought and depending on the site, the ground on which the array is installed might also be usable for additional revenue production: small animal grazing, shade tolerant agricultural production, etc. Large arrays on suitable sites at utility or commercial scale already are economical and improving technology will make them irresistable.


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## WoodyIsGoody (Jul 2, 2017)

woodgeek said:


> If you were a partial grid defector....why wouldn't the grid charge you a premium (i.e. just less than homeowner genny power) when you do need juice?



Electrical utilities are regulated monopolies so they can only charge a premium if the regulator says they can. But there is already a "line charge" that is paid by everyone who is connected. This charge is a flat rate paid monthly and is billed before you use the first kW just for the right to be connected.


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## jebatty (Jul 2, 2017)

The line charge also is regulated. Line charge + kWh charge = return to the utility. A low line charge and higher kWh charge encourages conservation because the user can take actions to minimize kWh usage. That cannot be done with the line charge. Some utilities claim that the line charge somehow should be the same for all meter customers based on the argument that it costs the same for all. Bogus. Those who use more kWh require a more robust distribution system, which means a greater cost distribution system than those who use minimal electricity. The distribution system is sized to meet the needs of the greatest users, including greatest peak users. Therefore, the right to be connected should be much higher for large users than for small users.


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## woodgeek (Jul 2, 2017)

WoodyIsGoody said:


> Electrical utilities are regulated monopolies so they can only charge a premium if the regulator says they can. But there is already a "line charge" that is paid by everyone who is connected. This charge is a flat rate paid monthly and is billed before you use the first kW just for the right to be connected.



Indeed, and important to remember.  If defection becomes significant, wouldn't the regulators step in to 'protect' the utility, namely through allowing them a reasonable rate of return, by allowing a higher line charge or usage fee, to 'partial defectors'?


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## Hasufel (Jul 2, 2017)

Just saw another interesting article about the economics of grid-based PV. Apparently California has so much excess capacity that it occasionally has to pay Arizona to take it, while at the same time Californians pay about 50% more than the national average for electricity! (LA Times article here.) Rather mind-boggling...


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## WoodyIsGoody (Jul 2, 2017)

woodgeek said:


> Indeed, and important to remember.  If defection becomes significant, wouldn't the regulators step in to 'protect' the utility, namely through allowing them a reasonable rate of return, by allowing a higher line charge or usage fee, to 'partial defectors'?



In theory it's the regulators job to protect the consumer from monopoly power. If the regulator is acting in the public interest, they would be more inclined to grant an increase to the kW rate than to allow a higher line charge to solar producers (partial defectors). "Solar producers" or "partial defectors". Two different terms for the same thing. See how loaded words are?


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## WoodyIsGoody (Jul 2, 2017)

Hasufel said:


> Just saw another interesting article about the economics of grid-based PV. Apparently California has so much excess capacity that it occasionally has to pay Arizona to take it, while at the same time Californians pay about 50% more than the national average for electricity! (LA Times article here.) Rather mind-boggling...



Good article. My first impression was that California regulators are in the pockets of the power producers they are supposed to be regulating. And the arguments of the power industry didn't change my mind. 

Too much energy is actually a good "problem" to have and an easy one to solve. Simply mandate that employers with more than 1000 employees (for example) provide smart charging jacks at every employee parking space. Then, millions of cars will be recharging from their morning commute with "free" electricity and CA won't have to pay Arizona to take the electricity. The money saved by the utility can help fund the smart chargers.

Problems like this are so much easier to solve when you don't give the private sector the power to influence decisions for their own profit motive. Yes, the utility companies interests (in being as profitable as possible and maintaining as large a market share as possible) are 180 degrees opposite the peoples interest. Someone needs to replace the CA regulators. 

Good, common sense governmental regulation that blossomed in the 1930's is what made modern America great. People need to take an unbiased look at American history before they declare the problem is too much government. They will see the real problem is government working against the common interests of Americans (in favor of the moneyed interests of a few).


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## Where2 (Jul 2, 2017)

woodgeek said:


> If defection becomes significant, wouldn't the regulators step in to 'protect' the utility, namely through allowing them a reasonable rate of return, by allowing a higher line charge or usage fee, to 'partial defectors'?



*Why?* How is a "partial defector" or "Solar producer with personal onsite storage" any different than a low consumption typical consumer? 

Maybe the low consumption consumer is on a fixed income with more "free time" than monthly electric dollar budget and chooses to line dry their laundry, uses their air conditioning sparingly, has a gas stove and gas water heater and heats their home with oil, gas, wood or something other than electricity.  Should we put the screws to those on a fixed income for not fully supporting the shareholders and profits of a regulated monopoly when demand for a monopoly regulated service starts to dwindle?

Maybe the low consumption consumer lives in a "tiny home" and follows a "greener living" lifestyle. Should a regulated monopoly charge a higher rate to someone who chooses to have a smaller carbon footprint than the "average American" around them?

When you call up to get electric service, the power company doesn't send someone out to go through a home and total up all the grid connected appliances in the home to determine how much to charge them as a "line charge" or "monthly base meter fee". If you have a gas stove, gas water heater (or solar water heater), and gas dryer (or clothes line), you don't get any cheaper monthly connection fee than the guy next door who has an electric stove, electric water heater, electric dryer, and electric baseboard heat. Why? Because you could swap those appliances at any time without requiring notice to the electric company, cancel your gas service and go all electric in an afternoon. The base meter fee assumes some generalities between the average household consumers.

If defection becomes significant, how is a "solar producer with onsite storage" any different than a neighboring low consumption consumer?


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## EatenByLimestone (Jul 2, 2017)

Actually, there is a different rate schedule for those with electric heat.


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## begreen (Jul 2, 2017)

Where2 said:


> If defection becomes significant, how is a "solar producer with onsite storage" any different than a neighboring low consumption consumer?


Interesting question. How is this handled in FL where many homes are only occupied in the cold months?


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## jebatty (Jul 3, 2017)

woodgeek said:


> Indeed, and important to remember. If defection becomes significant, wouldn't the regulators step in to 'protect' the utility, namely through allowing them a reasonable rate of return, by allowing a higher line charge or usage fee, to 'partial defectors'?


This assumes that the goal of regulation is to protect the utility, that is, provide a rate of return on investment. But that is not the real purpose of regulation, although the utilities would like to convince their customers and the public that this is the goal. In fact, the social welfare objective in the historical case of energy is to ensure low cost, reliable service, not to uphold the welfare of utilities themselves.

Rather than focusing on the return on investment, utilities, regulators, investors and customers all would be better served by focusing on the value of the service provided, just like any other business. The price the local gas station receives for gas sold is not based on investment return. It is based on the value of the gas and other products and services provided. Utilities would do well to do the same.

Instead of viewing ratepayers as passive sources of cost recovery, utilities would do well to view them as customers. The utility should offer its customers value: products and services that satisfy the customers' changing  preferences. They could offer bundles of service and product to their customers, rather than have customers defect and acquire those desired services and product customers want from others. The utility could offer (or if necessary be allowed to offer) bundles of service and products: solar panels, energy storage and management, as well as grid electricity, etc.

[The ideas in this post are not all original with me, but collected from a variety of sources and edited.]


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## begreen (Jul 3, 2017)

Unfortunately with corporate control the shareholder is the customer. FWIW, our regional power provider is now owned by an Australian holding company.


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## iamlucky13 (Jul 3, 2017)

Hasufel said:


> The basic premise is that with solar being popular and low-cost battery storage solutions on the rise, it's making more sense to "defect" from the grid.



What low-cost battery storage solution?

If all of Tesla's claimed specs are accurate , especially the incredibly high 5000 cycle life (normal for lithium ion batteries is 500-2000 cycles to 80% - not clear what depth of discharge the 5000 cycle spec is), it adds $0.14/kWh* to the net cost to your home-generated electricity, not counting any time-value (interest on loan or alternative investment value) on the cost.

On-grid makes sense in many regions. Off-grid is something to do because you want to be independent, and it's not without compromises. It's also not the most efficient use of resources due to duplicated excess capacity to cover your high demand days.

Fortunately, increasing decentralization can help reduce the costs of maintaining the grid, helping keep staying interconnected economically viable. There is a significant potential role for home storage in this, in addition to its value for emergency use.

* Based on 5000 cyles to 80% DoD, 13.5 kWH capacity, no loss of capacity until end of life, 92.5% round-trip efficiency, price from Tesla website ($5500 + $700 "supporting hardware" + $800 install), 0 financing costs.



jebatty said:


> This assumes that the goal of regulation is to protect the utility, that is, provide a rate of return on investment. But that is not the real purpose of regulation, although the utilities would like to convince their customers and the public that this is the goal. In fact, the social welfare objective in the historical case of energy is to ensure low cost, reliable service, not to uphold the welfare of utilities themselves.



If carried far enough, at some point protecting the utility is protecting the social welfare.

Who's going to be the last demographic to be able to afford to lay out tens of thousands of dollars or get credit approval for comparably valued leases to go off-grid? The lower income households. If the cost of maintaining the grid is no longer shared with higher income (often also higher volume) households, the lower income households will see their electricity costs skyrocket.

But again, I think there's compelling reasons for the grid to remain long term.


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## Where2 (Jul 3, 2017)

begreen said:


> Interesting question. How is this handled in FL where many homes are only occupied in the cold months?



For seasonals: If your house in FL uses 0kWh per month, your bill is $7.87. If, like most seasonal residents, you leave the A/C running to keep the humidity from forming mold inside the residence, then the seasonals pay whatever the electric usage actually was, at the tiered pricing structure in effect. Tiered pricing works as follows:use under 1000kWh per month is cheaper, and use above 1000kWh per month trips into a different pricing structure for both fuel (generation) and delivery (transmission) charges.


Along the reverse of your "How's it work in Florida" thought, I got a rather compelling reason to install my second PV system in today's mail. $0.42/kWh (all in) for power to my farm in a rural town Northern Maine. No wonder my neighbors have been asking me what they have to do to build solar setups...


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## Hasufel (Jul 3, 2017)

iamlucky13 said:


> What low-cost battery storage solution?
> 
> If all of Tesla's claimed specs are accurate , especially the incredibly high 5000 cycle life (normal for lithium ion batteries is 500-2000 cycles to 80% - not clear what depth of discharge the 5000 cycle spec is), it adds $0.14/kWh* to the net cost to your home-generated electricity, not counting any time-value (interest on loan or alternative investment value) on the cost.
> 
> On-grid makes sense in many regions. Off-grid is something to do because you want to be independent, and it's not without compromises. It's also not the most efficient use of resources due to duplicated excess capacity to cover your high demand days.


That may be true in today's environment but the point of the original article is that, if the diminishing cost of battery storage continues, then there will come a time when it does make sense to partially or fully defect from the grid. Those living in states more favorable to solar power allegedly will hit the break-even point in three years for partial defections or 11 for full.


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## georgepds (Jul 3, 2017)

Re batteries

They are great for daynight load levelling, but useless for summer winter load levelling (they'd have to be too big)

I don't see defections happening until there is a seasonal storage solution. But then I'm from the northeast.. things may be different in the southwest


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## woodgeek (Jul 4, 2017)

Where2 said:


> *Why?* How is a "partial defector" or "Solar producer with personal onsite storage" any different than a low consumption typical consumer?
> 
> If defection becomes significant, how is a "solar producer with onsite storage" any different than a neighboring low consumption consumer?



I guess I got a bit of attention from my little statement.  I will try to explain.

Some answers:

If I am a partial grid defector, I have invested a chunk of change in a battery system presumably with an economic rationale.... 

Maybe my state doesn't have a good net meter arrangement.  Maybe I put in solar, and my state removed the net-meter arrangement afterwards, leaving me underwater on the PV (these are hypotheticals).  In that case, I buy a battery, and use it to store most of my diurnal production for my later use, minimizing the amount I buy from the grid, but mostly to avoid selling any power to the grid at a loss.

Maybe my state has time of use rates, and my PV/battery can't keep up in low season (like winter), so I still have to buy some power.  In that case, I program my system to buy all of it during the cheapest TOU period.  From a grid operator point of view, this is great.  From a generator POV, I never buy their power except when its almost free....they make no profit on me at all.

I am free to do this in an deregulated electricity market place if I have batteries and a grid connection....I am not saying its bad.

As for the utility regulators, sure, they are put there to protect consumers from the 'natural monopoly' of the electrical utility.  But in practice, this does NOT look like ...how do we minimize costs to grandma on a fixed income or the consumer en masse....and DOES look like a cmte looking over the utilities operating expenses balance sheet, capital investment and repair budget, the utilities request to pay a reasonable, historical dividend to its shareholders, and then saying that they are allowed to charge enough to cover those expenses.  

In other words, the regulator will not prevent them from charging enough to stay in business.  If the business is evolving in a manner that is hitting their bottom line, the regulators will allow them to upcharge enough to stay afloat, even if the remaining customers are up in arms about the cost/rate structure.

In this context, if I were the utility, I would argue to the regulators that the folks with the batteries are wealthy customers that are arbitraging my system, and then I would calculate an all in cost for me to keep them on-grid assuming no $/kWh profit from them, and argue I should be allowed to put that on the line charge of anyone putting in batteries.  And I suspect the regulators would let me do it too.


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## woodgeek (Jul 4, 2017)

WoodyIsGoody said:


> In theory it's the regulators job to protect the consumer from monopoly power. If the regulator is acting in the public interest, they would be more inclined to grant an increase to the kW rate than to allow a higher line charge to solar producers (partial defectors). "Solar producers" or "partial defectors". Two different terms for the same thing. See how loaded words are?



I am using them differently....a solar producer on a net-meter arrangement is very different than a partial defector that sells no power to me, and only buys (maybe in a surge) when the TOU rate is at a minimum.  A solar producer is giving me power at a retail rate during peak periods when generation may cost more than retail (I would otherwise have to buy from peakers)...and I make money then.  The partial defector....its like they're not there at all...and then swoop in when I have some excess generation and take the power and pay me almost nothing.


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## WoodyIsGoody (Jul 4, 2017)

woodgeek said:


> A solar producer is giving me power at a retail rate during peak periods when generation may cost more than retail (I would otherwise have to buy from peakers)...and I make money then.



With the ever growing solar component of grid power generation (both massive solar farms and small distributed generation), peakers tend to not run when the sun is shining.


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## Where2 (Jul 4, 2017)

woodgeek said:


> In other words, the regulator will not prevent utilities from charging enough to stay in business.  If the business is evolving in a manner that is hitting their bottom line, the regulators will allow them to upcharge enough to stay afloat, even if the remaining customers are up in arms about the cost/rate structure.



If enough customers get furious, then there's always the option of modifying the legislation that created the monopolized utility game and letting standard business economics run its course. When the monopoly was created, I'm sure the authors never envisioned a PV array on a roof top converting sunlight to energy.



woodgeek said:


> The partial defector....its like they're not there at all...and then swoop in when I have some excess generation and take the power and pay me almost nothing.



I thought that's what your wind generated power grid needed, consumers willing to pay for the excess rather than having to pay neighboring grids to take the excess?


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## woodgeek (Jul 4, 2017)

WoodyIsGoody said:


> With the ever growing solar component of grid power generation (both massive solar farms and small distributed generation), peakers tend to not run when the sun is shining.



Indeed.  This is why the economics of net metering (which were often favorable for the utility) are becoming less so....and so are more likely with time to be altered.


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## woodgeek (Jul 4, 2017)

Where2 said:


> If enough customers get furious, then there's always the option of modifying the legislation that created the monopolized utility game and letting standard business economics run its course. When the monopoly was created, I'm sure the authors never envisioned a PV array on a roof top converting sunlight to energy.



I am certain that the regulators worry about furious customers....but again, I think IF 'partial grid defectors' started to affect the bottom line of utilities, then the regulators would be more worried about protecting the 'energy poor' than the well-heeled folks with batteries.



Where2 said:


> I thought that's what your wind generated power grid needed, consumers willing to pay for the excess rather than having to pay neighboring grids to take the excess?



Indeed.  But I suspect that utilities will capture much/most of the economic opportunity...be it PV or batteries.  I think they will build out cheap PV and load the grid with solar before many homeowners do. And they will buy batteries at scale/bulk to soak up RE excess (to sell back to YOU at retail) rather than leaving that money/opportunity on the table or letting you pocket the cash!  

Making and supplying energy and delivering it to customers for $$ is what they do....they might be _better_ at it than Joe Homeowner.  While Joe Homeowner might increasingly care about getting green power...most would be happy to buy it at the current or similar cost from their neighborhood utility without having to put anything up front or deal with installers on their roof.  Me included on my shady lot!


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## jebatty (Jul 5, 2017)

woodgeek said:


> Making and supplying energy and delivering it to customers for $$ is what they do....they might be _better_ at it than Joe Homeowner.  While Joe Homeowner might increasingly care about getting green power...most would be happy to buy it at the current or similar cost from their neighborhood utility without having to put anything up front or deal with installers on their roof.  Me included on my shady lot!



I agree, starting with the fact that most Joe Homeowners don't have a suitable site for PV and ending with most Joe Homeowners don't have cash for PV, let alone any significant savings for a life after paid work, aka retirement. PV currently does not have enough of the glitz factor that a new pickup truck, SUV, large screen TV, or junk food has, at least enough glitz to go into debt to do the install, even when the economic rate of return is favorable. The focus of the majority of Americans is on immediate spendable cash, self indulgence if you will, and not on lasting value or actually leaving the world in better shape for their children and grandchildren than the current trajectory indicates.

If the end result of net metering and other incentives is to shock or force utilities into investing in wind, solar, hydro and even nuclear and to up the renewable portion of electric power to 80% and more, which clearly is doable, the fossil carbon portion of the electric power industry will be largely eliminated. Isn't that by itself a worthy goal? 

I think the only wit that utilities give about the "energy poor Joe Homeowner" is to not make the cost of electricity so burdensome that politics and regulators will dictate a rate and service structure that results in the more well-heeled homeowner paying an ever higher rate in order to subsidize a lower rate for the poor homeowner. 

There still will remain a portion of Joe Homeowners who do understand the need to reduce fossil carbon, who do have the cash to install PV, and who do care about leaving the world in a better place, and room likely will remain for them in the energy mix of the present and future, whether it be off-grid, partial defection or net meter.


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## Where2 (Jul 5, 2017)

woodgeek said:


> But I suspect that utilities will capture much/most of the economic opportunity...be it PV or batteries.  I think they will build out cheap PV and load the grid with solar before many homeowners do.



My electric utility is already ahead of your game. They're adding 2.5 million corporate owned panels to their grid this year, continuing their tradition of skimming shareholder profits being in the middle.


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## woodgeek (Jul 6, 2017)

jebatty said:


> If the end result of net metering and other incentives is to shock or force utilities into investing in wind, solar, hydro and even nuclear and to up the renewable portion of electric power to 80% and more, which clearly is doable, the fossil carbon portion of the electric power industry will be largely eliminated. Isn't that by itself a worthy goal?



Definitely. I care a lot more about getting to your stated 80% RE grid goal, asap, than the details of what it looks like when we get there.  But while we're 'in the weeds', let's speculate.

Will it look like 80% of homeowners having PV on their roof and Tesla batteries in their garage (call this the California extrapolation)? I doubt it, since that wouldn't be big enough to get the job done, nor does it seem like it would be the most cost effective in terms of economies of scale.

Does it look like electricity costing 3X as much as now in real terms, hooked up to govt-mandated RE production and storage systems, like off-shore wind and hydrogen fuel cells (call this the Germany extrapolation).  I doubt that the public has the long-term tolerance for such an effort, which would stall out politically at a lower penetration level.

I suspect that we will have a mix of utility owned onshore wind and utility solar, long distance HVDC transmission, grid battery storage, with maybe some added offshore wind and CSP solar with thermal storage (or maybe not, the price is not yet there on either tech).  That can get to 80% seasonal average technically. And people will buy their power precisely as they do now, except maybe have some net-linked demand-modulated smart appliances and TOU rates.  And I suspect kWh prices will be higher in nominal terms, and smaller in real terms, than currently.  That system at 80% energy penetration with current tech (mostly expensive storage) is NOT that affordable....but I am convinced that it will be by the time that RE gets built out to the scale where storage is needed.

And I predict that the average Joe Homeowner will not think about where his energy comes from then any more than they do now.  But they will b#tch that it costs too much.  

And that in that world, likely with low daytime and summer electricity TOU rates, both grid-tie and off-grid solar will be more expensive than grid power (due to their lack of economy of scale).  And neither will ever get to more than a few % rates of adoption.

In this scenario, the heavy lifting will have been done by simple, regulated capitalism.  A 2.2 cent PTC for wind (largely in the US) for a couple decades can provide the tens of billions in engineering development money to build that industry.  Cheap PV will get there with its tens of billions of development money coming from overseas...mostly Japan, EU and Chinese incentive-driven PV purchases driving PV down the cost curve (the US lagged here, with weak net-metering incentives, and not fielding PV at reasonable scale until it got cheap).  Battery storage will get there with early adopters buying EVs driving large Li-ion batteries down the cost curve.  We owe this to California and Elon so far, but are passing the baton to Korea and China, as they are poised to take the lead on EV battery mass production (as they took over PV 8-10 years ago).

So, I don't see where US utilities being forced or shocked had much to do with it.  They were required to buy power from wind producers and rooftop solar.  The first probably helped lead to wind development, how much the latter gave us cheap solar is debatable.  But now that cheap tech is here....simple greed, fear and FOMO will take over to get us on our way to 80%.


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## sloeffle (Jul 6, 2017)

jebatty said:


> I agree, starting with the fact that most Joe Homeowners don't have a suitable site for PV and ending with most Joe Homeowners don't have cash for PV, let alone any significant savings for a life after paid work, aka retirement. PV currently does not have enough of the glitz factor that a new pickup truck, SUV, large screen TV, or junk food has, at least enough glitz to go into debt to do the install, even when the economic rate of return is favorable. The focus of the majority of Americans is on immediate spendable cash, self indulgence if you will, and not on lasting value or actually leaving the world in better shape for their children and grandchildren than the current trajectory indicates.


Personally I see PV as being a horrible investment and that is why I haven't bought into it. I'll gladly lease my 5 solar panels from my electric co-op for the next 5 years at a fixed electric rate. We don't need to re-hash the ROI of having you money in the stock market vs bank vs PV again.

This is coming from Joe Homeowner who has a place he could put a solar array, doesn't have the latest or greatest TV or truck, grows most of his own food, and saves 29% of his paycheck for retirement.


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## georgepds (Jul 7, 2017)

Sorry... re roi.. it depends on where you live..it's pretty good here in Massachusetts

That said, I'd do it (and did) without the roi. Sometimes someone has to point out there is another way ( the usual way being blind consumption)

Hey... this is a wood burning forum, we didn't get here by heating with oil.. why use electricity sourced by fossil fuels?


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## jebatty (Jul 7, 2017)

georgepds said:


> Sorry... re roi.. it depends on where you live..it's pretty good here in Massachusetts. That said, I'd do it (and did) without the roi. Sometimes someone has to point out there is another way ( the usual way being blind consumption)



Same with me. At my original install cost (2013 and 2015), less the FTC, my system has a 5.7% tax free ROI. And at estimated current install cost, the tax free ROI would be 8.6%. I think most people would agree that this clearly is not a horrible investment, but in fact is a very good investment on purely economic terms. And when avoidance of fossil fuel environmental and social costs are considered, PV is an outstanding investment.


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## maple1 (Jul 7, 2017)

Is erosion of capital (depreciation of equipment) factored in to these returns?

And if so how?

Have to say doing this is more on my radar now than it was 2-3 years ago, between lowering costs and a more favorable stance of the power co.


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## georgepds (Jul 7, 2017)

The panels depreciate production by 10% over 25 years.. My enphase inverters have a 25 year warranty...

Capital depreciation is not all that large a consideration.

You could start to consider how they hold up to tidal wave, meteor strike, and thermonuclear effects, but then you are getting into really low probability of occurrence scenarios


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## woodgeek (Jul 7, 2017)

sloeffle said:


> Personally I see PV as being a horrible investment and that is why I haven't bought into it. I'll gladly lease my 5 solar panels from my electric co-op for the next 5 years at a fixed electric rate. We don't need to re-hash the ROI of having you money in the stock market vs bank vs PV again.



Agreed. Resisting the re-hash on solar ROI.


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## begreen (Jul 7, 2017)

Tesla is contracting to install the largest battery bank in Australia with a capacity of 100MW. They have been dealing with brownouts in South Australia for a year. This is to help stabilize their system along with Tesla Powerwall systems in residences and businesses. What is amazing is that Musk is promising it will be completed within 6 months or it's free. 
https://techcrunch.com/2017/07/07/t...ry-storage-facility-for-australian-wind-farm/


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## maple1 (Jul 7, 2017)

georgepds said:


> The panels depreciate production by 10% over 25 years.. My enphase inverters have a 25 year warranty...
> 
> Capital depreciation is not all that large a consideration.
> 
> You could start to consider how they hold up to tidal wave, meteor strike, and thermonuclear effects, but then you are getting into really low probability of occurrence scenarios



(Sorry, don't think I was in on the original ROI hashing  )

Someone doing a purely ROI assessment would have to consider it though? There would have to be some loss on capital over time [depreciation] that should be worked in to ROI - vs. a market investment that would preserve it (an assumption in itself I guess, but on the market side any loss would reflect ROI negatively...).

Not trying to be disparaging, since as mentioned I am more interested than ever in possibly taking the solar plunge.


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## jebatty (Jul 8, 2017)

Back on track with grid defections -- and may not even make the move to PV to disconnect. My probable grid defection is highly motivated by the ever increasing base charge by the utility, that charge now being $22/month, just for the privilege of having a meter.

I have two large farm machine sheds currently served through a meter to our farm site. We are selling a 5 acre tract including the house, garage and barn, also served through the same meter, and with the sale we will need to disconnect the machine sheds from the meter. The alternatives: 1) a new meter install to serve these machine sheds, with a starting cost to the utility for a new meter and an electrician for hookup (about $500 as an estimate) plus $22/mo base charge plus kWh charge; 2) use my existing 5500 watt generator as needed for power, which is for lights, air compressor, small power tools, and occasionally the MIG welder; 3) a small PV system with battery storage (but that might not be able to power the welder); or 4) work out a deal with the buyer to pay the buyer an agreed amount per month to continue the feed through the existing meter.

At this time I'm ruling out #1 and #3 due to expense. #4 is a possibility, maybe $15/mo (would pay for about 115kWh of usage/month), and I doubt most months I would even use that much.

I think #2 is most attractive. I've already switched all lighting to LED, and each building now uses about 50W for lighting, which is the most frequent use of electricity. To avoid needing to start the generator every time just for lights, I could use my existing 400W inverter and a 12V deep cycle battery to run the lights between generator uses, and when the generator is used the battery could be charged. Also I have a 30W PV panel and charge controller which I could use to maintain the battery. Gasoline usage would be very low with the generator, as air compressor and tool usage is not very often, and welder use maybe a couple of times/year.

Interestingly, I would not even have though about grid defection except for the fact of the ever increasing utility base charge. Just a few years ago it was less than $10/month. Indications are that more base charge increases are likely.


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## WoodyIsGoody (Jul 8, 2017)

jebatty said:


> Back on track with grid defections -- and may not even make the move to PV to disconnect. My probable grid defection is highly motivated by the ever increasing base charge by the utility, that charge now being $22/month, just for the privilege of having a meter.
> 
> I have two large farm machine sheds currently served through a meter to our farm site. We are selling a 5 acre tract including the house, garage and barn, also served through the same meter, and with the sale we will need to disconnect the machine sheds from the meter. The alternatives: 1) a new meter install to serve these machine sheds, with a starting cost to the utility for a new meter and an electrician for hookup (about $500 as an estimate) plus $22/mo base charge plus kWh charge; 2) use my existing 5500 watt generator as needed for power, which is for lights, air compressor, small power tools, and occasionally the MIG welder; 3) a small PV system with battery storage (but that might not be able to power the welder); or 4) work out a deal with the buyer to pay the buyer an agreed amount per month to continue the feed through the existing meter.
> 
> ...



Looks like #4 is the best option (share expenses with future buyer). Win, win. If the buyer turns out to be difficult, your other options are still available. But most people are reasonable.


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## woodgeek (Jul 10, 2017)

Here is David Robert's thoughtful take on the grid defection report that started the thread...

His take for utilities: Change or die.

Link: https://www.vox.com/energy-and-environment/2017/7/7/15927250/utilities-rooftop-solar-batteries


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## georgepds (Jul 10, 2017)

High time for the utilities to consider, seriously, micro-grids, and the business models that support them. Rooftop solarand other DER would fit right in. As to business models, I benefit greatly from the incentives Massachusetts put in place for roof top solar.. net metering and SREC sales to name two.  But, as the technology matures, these incentives will no longer be needed. I'd like to see a transaction cost, with my "selling" excess energy at 1 or 2 cents less credit than energy delivered, and the utilities pocketing the transaction fee

The whole thing needs to be thought out more carefully. NRELL has convinced me that there will be a need to wheel power from one ISO to another, to support ~50% renewable energy in the east. So transmission lines and distribution networks will always be here. But the size of the distribution system can be cut back if roof top solar, local PV farms, windmills, and grid storage to over come the day/night load imbalance .  Imagine a series of micro-grids, each powered by a variety of renewable sources, connected to the grid, but capable of standalone for at least a day or two. This would require DER ( distributed energy resources) , and would remove some of the pressure to defect from the grid entirely.

I'm very tired of hearing I'm a burden on the poor because I have roof top solar. A lot of the energy that comes to New England is brought though natural gas pipes, and wheeled down from hydro Quebec. When I dump energy onto the grid none of those transmission or distribution costs are needed. The energy I provide is cheaper because you do not have to allocate/ build out those transmission and distribution costs


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## georgepds (Jul 10, 2017)

"  grid defection makes economic sense today only in Hawaii where retail electricity rates are the highest in the nation"

For green building advisors take on the matter see

http://www.greenbuildingadvisor.com/blogs/dept/guest-blogs/why-we-still-need-discuss-grid-defection


the comments by Dana Dorset make the most sense to me


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## Hasufel (Nov 23, 2017)

begreen said:


> Tesla is contracting to install the largest battery bank in Australia with a capacity of 100MW. They have been dealing with brownouts in South Australia for a year. This is to help stabilize their system along with Tesla Powerwall systems in residences and businesses. What is amazing is that Musk is promising it will be completed within 6 months or it's free.
> https://techcrunch.com/2017/07/07/t...ry-storage-facility-for-australian-wind-farm/


Looks like Tesla did it: Tesla completes installation of world's largest lithium ion battery, beats 100-day deadline. It should be energized in the next few days. I'm looking forward to seeing how well it performs over time!


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## Seasoned Oak (Nov 23, 2017)

Hopefully their Grid business is going better than their car business,lots of people predicting their going out of business altogether sale lately.  One more big promise and not deliver event and they may not make it.


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## begreen (Nov 23, 2017)

I've been reading that prediction on and off for a few years. I guess we'll see. FWIW, the recent opinion by Bob Lutz may be just that. He has always been a Tesla critic.


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## Seasoned Oak (Nov 23, 2017)

The power storage business is probably worth more in the long run for tesla,too much competition in the car market with too many players. They could really be positioned to take advantage of a mass defection of the grid.


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## woodgeek (Nov 23, 2017)

Seasoned Oak said:


> The power storage business is probably worth more in the long run for tesla,too much competition in the car market with too many players. They could really be positioned to take advantage of a mass defection of the grid.



Tesla made $317M in the third quarter of 2017 on 'energy generation and storage', with a 25% gross margin...IOW, they can net about $300M/year at this point from that business.

This was 12X what they earned in energy just a year ago.

http://files.shareholder.com/downlo...3-7EC4E06DF840/TSLA_Update_Letter_2017-3Q.pdf


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