Solar And The Power Company

I Just Found Out, I'm Mad as Hell...

It's March of 2022, and a bill is set to go before the governor that will potentially upend residential solar in the state.

But what are the arguments, and what are the facts?

The local power providers in the state contend that it's "unfair" for solar customers to pay "less" than their non-solar neighbors for power.  It is said that residential solar generators are being "subsidized" by non-solar customers.  They also contend that they're not getting enough income from solar customers to offset upkeep costs.

Is it true?  Let us consider some numbers.

Based on Actual Data

I took an hourly data report from my Sense for the period of May 17 to June 16, of the year 2021, which recorded both solar production and overall energy usage.  From this I could calculate how much we sold back to our provider, and how much we would have purchased without solar.  

If anyone is interested, I can rerun this experiment with a whole year of data.  I picked this particular period somewhat at random: it had good solar production and represented a warm-to-hot time of year.  This production period is near the top - most elsewhere in the year, we will produce less energy from our system.  Anyone who complains that I cherry-picked data will receive nearly a year's worth of raw HOURLY data in reply.

At the end of the period, we had generated 3,265 kWh.  We used overall 2,392 kWh, leaving us with an energy credit of about 872 kWh.  Now, power isn't grain - unless you have huge batteries, you can't store it for long.  So what happened to all this extra power?

It Was RESOLD...

This power didn't just disappear...  Our provider resold it.  How they resold it, to whom they resold it, we do not know.  But they buy power from other providers, and they sell power to other providers, and of course they sell to us customers.  Solar customers, according to one report, represent 1% of that customer-base.

The power my system generated went to "the grid."  What does this mean?  Well, it went up and down the same power lines feeding all my neighbors, to put not too fine a point on it.  There is no way that I know of to differentiate power we generate from power the provider generates, if looking at someone else's meter box.  This is why we monitor usage at the residence, not at the provider or the substation.  Once power gets onto those two or three skinny pole-suspended wires, all trace of who produced it is lost.

So let's say there's one other neighbor on the immediate line that feeds my transformer.  They don't have solar.  Our provider is charging them at standard rates - the same rates they charge me when the sun doesn't shine or we don't generate enough to cover our usage.

Now, I'm going to simplify numbers here.  Our provider has tiered billing, but let's just consider usage costs up to 1000 kWh, which boils down to 13.266 cents per kWh of energy, fuel, and assets.

If our neighbor benefited from our solar generation, so did our provider, to the tune of at least $115 for the period in question.  That would've been our provider's income for the 872 kWh we supplied over our usage.  Our provider would have "sold" it to our neighbor, assuming our neighbor used it all (and they very likely did), and our provider charged them accordingly.  That's just income, not profit.  So what was our provider's costs?

What Does It COST?

We don't know what it costs to run a power company, but we can take a guess based on the changes presented in the legislation.  

Under the guise of making power bills more "equitable", the legislation reduces the value of kWh's supplied to power companies from 1-kWh-credit per kWh-generated down to 1/2 kWh-credit per kWh generated -- 50% of what is produced.  This means that if I generate 872 kWh over for the month, my provider will be able to say that I only produced 436 kWh for them.  They'll still get to sell 872 kWh, and charge others for 872 kWh, neither of which they produced.  I am, at worst, renting their power lines and maybe a few small transformers.

I, on the other hand, will be at a loss in both the short and long term: the energy credit I would be carrying into the darker months of the year won't be there, and my winter bills will skyrocket because I won't be "generating" enough power - by this bookkeeping - to offset my usage.  In my spreadsheet, for that period of May to June I wouldn't have "produced" enough power to even avoid "using" grid power, let alone carry a balance into next month.  Whereas I would have had 872 kWh of credit, I would have owed 171 kWh to my provider, with nothing banked for the next or any future month!

This is what we affectionately call "getting shafted."

It should be noted that after almost a year of production (my system came online in February), I was in the "negative" by the end of December - I had used up all my credits and had to pay a rather ugly power bill for my usage overages.

So, how much does our provider profit?  If they are willing to reduce the value of our production by upwards of 50%, then they must be able to produce power or buy power for around that rate.  This would mean they are charging a 100% markup on power sold (i.e. they buy for $0.05, and sell it for $0.10 - these are not actual values, just examples to be clear what I mean by the markup).

If they produced and sold 872 kWh of power (for $115), it should cost them around $57.  That gives them a $57 profit.  But they're not spending $57 in fuel, generation equipment and whatnot, when they get power from me.  My power might not even be making out to most of the equipment that they are otherwise using to transfer power from place to place.  It might be getting used by my numerous neighbors (not just the one in this example), and never touching any of the equipment located miles away.

My provider is already $57 better-off thanks to my generation.  If it actually costs them less to produce or buy power, then they are even better-off than that.  Why exactly do they deserve or need more?

Shafting the Future

Given that I had used up all my credits before the end of the year, and expect to do so again this year, I would expect that a system generating (or receiving credit for) only 50% as much power would have substantially higher power bills.  This doesn't benefit my pocketbook, to be sure, and might drive me to invest in batteries.  

I would even want to take it a step further and not even provide power back to the grid, if I could.  After all, why should they profit so pointedly at my expense?  They aren't paying for my panels, they didn't help with the install, they wouldn't be paying for battery installation and upkeep, they would basically just be getting super-cheap power and I wouldn't be able to negotiate a goddamn thing.

Free-Market Power

If we want a free market for power, we cannot live under the guidance of utilities.  They have a profit motive, as any good and successful business does.  But they have no competition - except from small-time residential solar providers.  A surefire way to dissuade people from "going solar" is to take their power and give them little-if-anything in return.

Here's a little-known fact: according to my provider's own "how to go solar" page, you can't build a system that generates more than you use on average.  I use a lot of power, so I was allowed a large system.  But most people don't, and so most people won't, even if they have the roof-space for it.  That lost real-estate in solar-generating-potential will now cost them even more.  

Do we assume our energy needs will stay the same or diminish over time?  Every time I plug in my car, I consume between 5 and 15 kWh of power.  Do that every day for a month, and suddenly my usage is through the roof.  With more people buying electric cars, using electric gizmos, and sucking power like there is no tomorrow, usage isn't going to go down.

Still, here we are with utility companies talking "equity."  Equity for whom?  Wouldn't it be more equitable to charge my neighbors less?  After all, why should they pay for fuel that the utility didn't consume?  Or maybe I should be receiving some of the profits as an incentive to keep my grid-tied system tied to the grid!  Where is my profit in all of this?  "Good Feels for the Planet" doesn't put food on the table.  But money back to customers makes cheap power available to the lowest-income groups and helps them more than charging local energy-producers over-and-above.

An Allegory

Can you imagine a gas station charging more for a fuel-efficient vehicle to fill there?  

If you drive up with a beastly, gas-guzzling and aging SUV, you pay $3 per gallon.  But if you arrive with a brand-new Toyota hybrid, the gas station charges you $6 per gallon.  

Why?  

Because your vehicle uses less fuel, which means you normally won't buy as much gasoline as the SUV, and it's not equitable to make the SUV pay more than you even though you paid a lot more money for that advanced fuel-efficient technology.  Plus, the gas station has to be able to do upkeep on their pumps, pay their attendants, and maybe occasionally paint the place.  Your more efficient vehicle, they say, costs everyone, and therefore you should pay for it.

How in the every-loving-**** does this make sense?

In Summary

To summarize: We analyzed collected data from an actual month of energy usage and solar production.  At the end of that period, we had - by original design - a surplus of 872 kWh of solar credits, to be used in the darker months of the year or whenever the sun doesn't shine.  

The legislation will eventually reduce this to 50%.  Our surplus is obliterated, and we end up owing 171 kWh to our energy provider for the month in question.  Other months, I predict based on observations, will be far worse.

Our provider profits from our 872 kWh of produced power, by reselling it to my neighbors.  They sold our generated power for $115, without incurring the estimated $57 of generation and fuel costs.  What's more, the tier structure means that if my 872 kWh reduced my neighbor's usage from above the 1000 kWh limit to below the 1000 kWh limit, my neighbors were then overcharged for fuel and energy that wasn't produced by the provider (since the provider makes no distinction on where my neighbors get their power).

As for infrastructure, power lines do not get "used up" like light bulbs, so the lines that supply their houses and mine are not likely to degrade significantly even if left hanging for 30 years.  After all, when was the last time your utility replaced YOUR power lines?  The upkeep here is minimal.

Other infrastructure does require upkeep (substations, transformers, and whatnot), and for that surely a base cost applied to everyone still applies.  There I think we can all agree, and it shouldn't matter if we're consuming the power or providing it.  Cables don't care which way the power runs.