Taxing Solar Energy

[Colin A]

Originally Posted by a64pilot

Something has to be askew with your numbers, else every house in every neighborhood would be covered in panels, cause you just can't beat 6%, trust me, if I had a return of 6%, I'd borrow the money and come out ahead.

I wish I could get 6% return on my money

I see them all the time here in CT passed 4 residential installations in progress on my way to work. Of course here in CT it's net metered at retail. Honestly I think that may need to be lowered to wholesale green energy rates which around here tend to be 20-30% over general wholesale rates.

[chala]

Originally Posted by jwing

There is no actual energy storage in the grid, so utilites must be able to instantly supply power from their generating station whenever it starts raining or the wind slows down.

https://en.wikipedia.org/wiki/Grid_energy_storage

20 years without requiring any maintenance? Most warranty on inverters are between 3 to 5 years.

[Colin A]

I wonder how feasible it is if net metering switches to wholesale rates? that would seem to be part of the problem.

I have been watching off grid system pricing for awhile now. It's getting closer and closer to making sense. My house uses an average 1050 KWH a month. at $0.168 a KWH delivered (which is what it is now but we were over 0.2 for a while) that's $176.40 a month. My neighbor who does some electrical work for a PV installer worked out an installed cost of around $35,000 to 40,000 (with me doing some labor) for a 9 KW array and a 66KWH AGM pack. Over 20 years that's $166.00/ a month. Of course the batteries will all die well before that so it is currently much more expensive, but honestly it's getting closer. Really what's holding that back is batteries. If I lived somewhere with more sun it might work but then most of those places have lower rates.

[Colin A]

Originally Posted by chala

https://en.wikipedia.org/wiki/Grid_energy_storage

20 years without requiring any maintenance? Most warranty on inverters are between 3 to 5 years.

Yes but I noticed the ads I get in the mail here in CT claim 10-20 year installed warranties. And you have the solar leasing which all have long warranties I believe solar city is 25 years.

[chala]

Originally Posted by Colin A

Yes but I noticed the ads I get in the mail here in CT claim 10-20 year installed warranties. And you have the solar leasing which all have long warranties I believe solar city is 25 years.

Would they still be in business in 10-15 years? I remember buying a PC with 5 years warranty. After 2 replacements in 2 years the company went broke and disappeared.

[Stumble]

Originally Posted by Colin A

I see them all the time here in CT passed 4 residential installations in progress on my way to work. Of course here in CT it's net metered at retail. Honestly I think that may need to be lowered to wholesale green energy rates which around here tend to be 20-30% over general wholesale rates.

That may be a reasonable way to price it. The more I learn about the situation the more complicated I think it is.

The fairest way I think to do it would be to assign a cost for the grid seperate from the recurring energy delivery cost (overhead, repairs, profit, customer service, etc). Then divide that by the number of consumers and have every customer pay an equal flat rate for the use of the grid. Then net meter the solar panels.

Admittedly solar tends to all turn on at the same time, but that is also the point of maximum demand on the grid so it tends to work out. Though some European countries with solar penetration about 20% are starting have to shuffle supply around to use all the power.

In just a few years this time dependent over supply will get better as utility scale storage (water pumping and thermal mass storage) start to come on line.

[tomfl]

Originally Posted by Schooner Chandlery

SNIP

I truly believe utility generation and transmission should be a govenrment function not a for profit one.

SNIP

Public policy nerds describe two types of government functions, cost centers and profit centers. As you noted earlier private electric companies' profits are controlled by law. Any increase in rates has to be justified, usually by upgrades or expansion of the system, same for government run systems. In fact many government run power systems are profit centers and the profits are used to pay for government functions not related to electricity.

What every post I have seen so far is ignoring is that the basic concept of planning is that growth does not pay for itself. If an electric power station and grid can supply 1,000,000 folks and the population grows to 2,000,000 folks the cost per KW of electricity will have to increase (I am ignoring economies of scale with these numbers). Many electric systems have seen an increase in the number of folks they have to serve along these lines in less than the expected life of the system.

There are also other issues power companies (private or government) have to deal with. Most additions to power grids now favor underground lines while most existing power grid facilities are above ground. Same thing goes for smart meters (those things needed for smart metering); newer parts of the system have them while older parts don't. It is not an easy job to figure out how to deal with the issues of expanding the system and upgrading the current system.

While some have noted the per capita use of energy is decreasing this ignores the fact that the total energy use which peaked in 2007 an decreased for a while is not trending up due to population increase.

Bottom line is power companies view solar energy produced by private homes as a tiny fraction of the total energy in the system. Perhaps more to the point they are viewed as more trouble than they are worth.

[Stumble]

Originally Posted by tomfl

Bottom line is power companies view solar energy produced by private homes as a tiny fraction of the total energy in the system. Perhaps more to the point they are viewed as more trouble than they are worth.

No it's actually worse than that. Power production companies are statutorily allowed a profit based upon the capitol investment they make. Build a billion dollar production plant and the producer is allowed a $100 million additional profit (numbers made up). In effect this is a legally protected ROI regardless of market forces. It's a pretty enticing deal.

The downside is that if solar panels mean the producers can't justify building an additional plant, they can't continue to grow.

Worse, because solar panels produce their maximum amount of power at the peak demand daily it means utility producers are least able to justify building new peak power plants. Now guess what plants are allowed the maximum statutory ROI... It's peak power plants. So solar doesn't just supply the grid, it offsets the need to build the most profitable plants a utility can build. It's literly skimming the cream from the profit centers.

This is the downside to privatizing profit of state granted monopolies like power companies. Anything that upsets the monopoly is going to be faced with massive entrenched opposition from very well funded lobby groups.

[jwing]

Originally Posted by chala

https://en.wikipedia.org/wiki/Grid_energy_storage

20 years without requiring any maintenance? Most warranty on inverters are between 3 to 5 years.

I'm not sure what your point is - that wikipedia entry described some energy storage techniques that can be connected to the grid, but they require even more capital investment and maintenance costs that are not returned by net metering programs.

By the way, most utility energy storage is in the form of unburned hydrocarbon fuels and in reservoirs upstream of river dams. As far as storing excess generation, as is possible with intermittent sources such as wind and solar, the only utility-scale scheme that I know of being actually used is pumped hydro. There may be others that I don't know about, and certainly there are test facilities for other technologies.

[Schooner Chandlery]

Originally Posted by tomfl

Public policy nerds describe two types of government functions, cost centers and profit centers.

I simply meant a government function not a PRIVATE one. For profit synonymous with private in the way I was using the term even if that is not how you interpret it.

[tomfl]

Originally Posted by Schooner Chandlery

I simply meant a government function not a PRIVATE one. For profit synonymous with private in the way I was using the term even if that is not how you interpret it.

I am not sure how to interpret what you said.

Here is an example of what I was talking about. Tallahassee is the capitol of Florida. As such it is the home to the headquarters for state agencies. In addition there are two large state universities and a large community college. These institutions have a very large footprint in the downtown area of Tallahassee; and more to the point are all exempt from real estate taxes which has a negative effect on the tax base of the city. As a result the City of Tallahassee owned the electric company and based its rate structure to try and recoup some of the taxes it would be able to collect if the tax exempt real estate was paying taxes. This is not the only example of a government owned electric company structuring its rates to create a profit center.

Just as an aside here is one of today's headlines that may be of interest. Total Collapse of PR Electric System.

The point I was trying to make is just like maintaining our boats maintaining and expanding electric systems is a non trivial task.

[barnakiel]

They will not tax the energy we are making. They will simply apply a higher tax rate to the production and sales of solar panels.

Govts are modern day biggest mafias. Too big, too powerful. And just imagine in most countries people are not even allowed guns to protect themselves.

You do not expect a politician whose family runs a HUGE oil business to let you NOT buy energy from fossil fuels. DO YOU?

It is too late now guys. We have overlooked the dangers lulled by our middle class dreams. Now pay, cry and die.

b.

[HughMcB]

Originally Posted by DeepFrz

One step up from the privatization of water.

Water makes more sense (not that of after with it, just makes more sense) as it's a limited resources. Solar energy is literally free and if you don't harness it it just hits the surface regardless.

[Stumble]

For the real threat facing energy production companies take a look at Solar costs heading to 4c/kWh, rooftop solar seen “unbeatable� : Renew Economy rooftop solar is expected to drop to $.04/kwh compared to today's average retail price in the US of about $.18.

For an industry that has seen almost continuious growth for a century this is a threat to their underlying business model. They are not fighting to tax solar, they are trying to delay the inevitable.

What I think is really going to happen is that as soon as off grid battery installations become cost effective the entire industry is going to collapse. Or at least I those areas where the industry has been able to undercut PV panels like NV.

[jwing]

Stumble:

Here's an exercise for you - I've already done it several times, but I could be mistaken. I'd like to see somebody else's figures.

Take the amount of energy that is used annually by an office building, or a typical building on a university campus. Those numbers are readily available online. Compare to the amount of insolation on the roof of the building you are considering. For the sake of the exercise, assume a solar energy system that has collection/conversion efficiency of 100%. Reconcile the results. For extra credit, calculate the acreage of surrounding land needed for the mythical perfect system in order to supply 100% of the facility's electricity. Then for grins, divide your results by a real-life system efficiency estimate.

Notice that money is not part of this exercise.