Sunday, August 14, 2016

Why home solar panels no longer pay in some states

Why home solar panels no longer pay in some states
New York Times, 26 July 2016, by Diane Cardwell

Energy policy analysts have been pointing out problems looming on the horizon for quite a while now.  As solar's share of the energy market increases, various stresses are created that are difficult to cope with.  One problem is that you begin to have a glut of energy when the sun is shining strongly, while developing a deficit at other times.  This article shows that this "intermittency" problem is beginning to rear its ugly head.  Utilities in high-solar-adoption states, such as PG&E in California, are changing their pricing models to charge consumers much more for off-peak power while paying them less for the power their solar panels send in to the grid during peak times.  Consumers are discovering that their solar installations are no longer cost-effective and may never pay for themselves as a result.  The same dynamics are playing out in Spain and Europe now, and are impacting states from Hawaii to Arizona.

My take: It is important to recognize that this is not the result of greed or backwardness on the part of the utilities; it is a simple consequence of the law of supply and demand.  If the utilities did not decrease the price paid at peak solar times, they would be unable to sell all the power generated at those times.  Conversely, if they did not raise the price at off-peak times, demand would outstrip the available supply, and brownouts or rolling blackouts would inevitably result.  Fixing these issues is not simple.  Power could be transported from areas with too much to areas with too little; but since day and night each cover half the globe at any given time, the distances involved are very large and power grids are not nearly up to the task at present (not to mention that large losses due to long-distance transmission would result).  Power could be stored in batteries to be taken out later when the sun isn't shining; but the battery capacity needed to get a large region through a long period of overcast skies (much less a single night) is staggeringly large.  Both of these options are immensely expensive, and these costs ought to be considered part of the cost of solar power, since it is solar's intermittency that creates the need for them.  In short, today's technology gives us no good solution to the intermittency problem in general.  This will limit how much market penetration will be possible for solar (and for wind, which has similar intermittency issues).  Many analysts predict that about 50% is the maximum we could handle; the rest of our energy simply must come from "baseline" sources that can be turned on whenever they are needed: coal, natural gas, oil, and nuclear.  As this reality becomes more clear, we can expect subsidy programs such as generous feed-in tariffs to evaporate, as the article illustrates is already happening in many markets (even though we are still very far from 50% market penetration of renewables).  As the article says, "Energy experts predict a bumpy transition."  I'll write about another angle on this problem in a future post.

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