# It’s Official: More Residential Solar Customers Buy Than Lease



## Brian26 (Apr 15, 2017)

Great to see this trend. I spent months researching solar panels and had some of the big companies over to give me quotes. The lease/ppa model is just outright terrible when you run the numbers and include the fact you don't actually own the panels or get any of the rebates. We went with a local installer who said business is booming as more people realize that buying them is the way to go. I think the big players are going to be in trouble. 

https://www.greentechmedia.com/arti...re-residential-solar-customers-buy-than-lease


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## peakbagger (Apr 15, 2017)

Great news that people are finally figuring out that they were getting ripped off on leases and creative financing.

Unfortunately a lot of damage is already done as folks who rushed into abusive leases get the final insult when they try to sell their house and have to pony up to buy out a lease at well above the cost of new system.


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## 7acres (Apr 16, 2017)

I'm sure happy I own mine free and clear. Hearing the details of the leasing schemes makes me feel like it's akin to time share pitches.


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## woodgeek (Apr 16, 2017)

And as solar continues to get cheaper....utility-owned solar farms have outgrown and will continue to outgrow rooftop....

http://www.seia.org/research-resources/solar-market-insight-report-2016-year-review

26 GW new capacity in the pipeline.

http://www.seia.org/policy/power-plant-development/utility-scale-solar-power

And then they will come for your net meter arrangement.

https://www.greentechmedia.com/arti...-coal-despite-trumps-climate-clean-power-plan


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## 7acres (Apr 16, 2017)

Woodgeek, what do you mean by, "And then they will come for your net meter arrangement."


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## woodgeek (Apr 16, 2017)

Right now, many utilities are making money from net metering arrangements, that generally pay a fixed retail rate for PV power backfed into the grid.  It works because the PV power is often coming during periods of high or even peak demand, when the marginal cost of power is above the retail rate on average.  The generators making that peak power (who may or may not be utilities) are seeing their market share decrease, so they are often lobbying to make net metering less favorable....with varying levels of success.

In the future with higher rates of PV penetration, it seems likely that this trend will get to the point that some low cost power sources will need to be curtailed on some sunny days, so the value of the backfed power may start to consistently drop below the retail rate.  One reason this may occur will be large scale adoption of utility solar in big farms, which will happen when they make a reasonable profit for investors at the daytime **wholesale** electricity rate, which is starting to happen in many locations.

When there is a ton of utility solar feeding the grid at a reasonable wholesale rate, that the distribution utility can sell to customers with the retail markup (which covers their grid costs + regulated profits), then your rooftop array feeding power in at the retail rate (and it should be pointed out, not needing much grid service to the send the juice to your neighbors AC unit) might start to look like an outdated, anachronistic loss leader...which is limiting how much solar **they** can push into the grid at a higher profit.

At that point...the powers that be may well align toward shifting net metering arrangements to something more like a wholesale or time of use rate, likely with much less favorable payback for YOU.  

Voters are willing to defend existing net metering arrangements because renewable energy is popular...efforts to paint rooftop owners as wealthy free-riders on grid services have mostly failed.  Now efforts to neuter net metering are often by stealth...by claiming to make it stronger or more competitive or free-er or some malarkey.  And those are also failing with 'truth' campaigns before the vote.

But the soft underbelly is that American's think we are **already** making a lot of renewable power...many people surveyed 'guess' much higher rates of renewable adoption than is actually the case.  By the time (utility) solar+wind reach 20%, it is possible they might think that renewable energy is 'all done', and if the utility fielding the 20% solar and wind says they need to change net metering to make even more of it....the voters might not come out as they do now.

And rooftop owners will be like early adopters everywhere...helping to make the future happen, but left with a bigger bill than they hoped for when it arrives.


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## georgepds (Apr 16, 2017)

7acres said:


> Woodgeek, what do you mean by, "And then they will come for your net meter arrangement."




From his link "When it comes to DER compensation, utility executives indicated they would most like to compensate rooftop solar and other distributed resources at wholesale rates, "

That's a big cutback from net metering at the retail rate


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## Brian26 (Apr 19, 2017)

woodgeek said:


> Right now, many utilities are making money from net metering arrangements, that generally pay a fixed retail rate for PV power backfed into the grid.  It works because the PV power is often coming during periods of high or even peak demand, when the marginal cost of power is above the retail rate on average.  The generators making that peak power (who may or may not be utilities) are seeing their market share decrease, so they are often lobbying to make net metering less favorable....with varying levels of success.
> 
> In the future with higher rates of PV penetration, it seems likely that this trend will get to the point that some low cost power sources will need to be curtailed on some sunny days, so the value of the backfed power may start to consistently drop below the retail rate.  One reason this may occur will be large scale adoption of utility solar in big farms, which will happen when they make a reasonable profit for investors at the daytime **wholesale** electricity rate, which is starting to happen in many locations.
> 
> ...



I think it depends on the politics/state. The complete opposite is happening here than what's been going on in other states.  Here in New England I don't think net metering is going to be changed anytime in the near future. In fact Connecticut and Massachusetts just passed strong laws last year reaffirming their commitment to net metering.


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## jatoxico (Apr 19, 2017)

woodgeek said:


> Right now, many utilities are making money from net metering arrangements, that generally pay a fixed retail rate for PV power backfed into the grid.  It works because the PV power is often coming during periods of high or even peak demand, when the marginal cost of power is above the retail rate on average.  The generators making that peak power (who may or may not be utilities) are seeing their market share decrease, so they are often lobbying to make net metering less favorable....with varying levels of success.
> 
> In the future with higher rates of PV penetration, it seems likely that this trend will get to the point that some low cost power sources will need to be curtailed on some sunny days, so the value of the backfed power may start to consistently drop below the retail rate.  One reason this may occur will be large scale adoption of utility solar in big farms, which will happen when they make a reasonable profit for investors at the daytime **wholesale** electricity rate, which is starting to happen in many locations.
> 
> ...



So here I am wading in on an issue I don't entirely understand but it seems the utilities may have some points. Under the old model they bought power at a rate that they could then sell for a higher price due to high demand _and_ they needed that power (I know where I live there have been brown out warnings).

But if roof top and other generators start to feed more power into the system than there is a need for then they shouldn't have to buy power they don't need. Remembering they have to maintain the infrastructure which includes keeping enough generation capacity for days when alternate sources that they don't control are not adequately back feeding to meet need.

Maybe Tesla's home battery storage will solve the problem.


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## woodgeek (Apr 19, 2017)

Brian26 said:


> I think it depends on the politics/state. The complete opposite is happening here than what's been going on in other states.  Here in New England I don't think net metering is going to be changed anytime in the near future. In fact Connecticut and Massachusetts just passed strong laws last year reaffirming their commitment to net metering.



Totally. 

Every state is different, but times can change.  Interestingly, one issue California has is its geothermal electricity plant.  As a thermal plant, it can readily throttle up and down in power output.  But when it was built (decades ago) to 'protect it' laws were passed that utilities had to buy the power as baseload, and could not ask to curtail it when the power was not needed.  Those laws are still in effect, and imply that in the future they will have to curtail solar power on sunny days while keeping the geothermal plant cranking. 

Makes no physical sense at all.  You would think they would throttle geo to back up intermittent renewable sources, instead of forcing RE curtailment.  Especially since the geothermal resource is **expendable**...there is only so much heat, and once it is mined out, the plant will need to shut down.

As for New England....the ironical effect of these **feel good** net metering laws (in the sense they only protect a future incentive, not expand a current one) is that they may ultimately slow the adoption of utility scale in those states, and keep the solar penetration lower than if the new laws had never been passed.  Oh well, let's not worry about the future.


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## Highbeam (Apr 19, 2017)

jatoxico said:


> Maybe Tesla's home battery storage will solve the problem.



Yes, and also a utility version of storage to absorb excess production.


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## woodgeek (Apr 22, 2017)

Behold the future of the distribution utility, 'Griddy':

https://www.bloomberg.com/gadfly/ar...a-thermal-bankruptcy-the-state-of-texas-power

bottom line...wholesale kWh costs have been falling for years...kinda like a bunch of new, low cost electrical production tech was invented (PV and wind) and incumbent generators have seen their fuel prices collapse at the same time...Hmmm.

Perhaps coming soon to a grid near you....

https://www.gogriddy.com/

Not clear how they work with net metering.


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## jebatty (Apr 23, 2017)

Our electric utility is in the process of testing new meters which will allow it to monitor kWh usage by customer on a real-time basis, as well as implement much enhanced control and pricing systems based on changing demand and wholesale cost of power. 

From the EIA, cost of wholesale power: https://www.eia.gov/electricity/monthly/update/wholesale_markets.cfm


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## semipro (Apr 23, 2017)

I've been looking into investment in home PV generation in VA and contacted my power company to learn more about net metering.  I was surprised to learn (if I recall correctly from my conversation):
a) that in VA utilities are required to provided net metering only up to 1% of their total generation capacity and; 
b) that they pay only $0.026/kwh for my excess generation while I pay about $0.12/kwh retail and; 
c) they only allow me to install as much generation capacity as I used in the year previous to installation of my PV system.  (I apparently shot myself in the foot with all my wood/pellet burning). 

Obviously there are some strange market and/or regulatory mechanisms at work otherwise why would they not encourage my excess generation when they can sell it for roughly 4x what they pay for it.


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## begreen (Apr 23, 2017)

Sounds like a token net metering program. Are coal and oil lobbyists strong in VA?


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## semipro (Apr 23, 2017)

begreen said:


> Sounds like a token net metering program. Are coal and oil lobbyists strong in VA?


That seems like a good description; "token". 
Our legislature is conservative and seems heavily influenced by conventional providers of power.  
Overall I"m not sure the reasons we're not more progressive on this.


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## jebatty (Apr 23, 2017)

Powerful $$$ and lobbying by the utilities. The "game" is to implement a regulatory framework that keeps the utilities the controlling owner and operator of wind and solar electric, as well as conventional. Private ownership and control threatens their profitability. Actually, except for the 1% limit, the VA net metering is not atypical and does give freedom to the homeowner to go "private" to meet her own needs, while not "profiting" by selling power to the utility at a price higher than wholesale. The question remains whether the $0.026 is wholesale, and I think not. If you look at the chart above, utilities are frequently paying more to much more than $0.026/kWh for wholesale power, so buying from you at that rate means they can reduce their power costs, increase their profits, and probably make money off the power they buy from you.


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