LEGISLATORS ARE HAVING A HEATED DEBATE over the subsidies that flow to those who install solar photovoltaic (PV) systems. That debate has been largely portrayed as dividing environmentalists and solar companies versus utilities and some business leaders. Solar advocates seek an immediate lifting of the “net metering caps” that limit the number of PV systems that can contact to the grid and enjoy net metering credits. But the important preliminary question is whether ratepayers – especially low-income ones − are being unfairly burdened by the current solar subsidies established by the Legislature and state agencies. If so, we first must reduce the cost of existing subsidies, especially the “solar renewable energy credits” (SRECs). There are much less expensive ways to obtain the solar generation we absolutely need to address the ill effects of climate change.
I was on the Commonwealth’s Solar Net Metering Task Force that looked at the benefits and costs of solar PV. While the environmental benefits are obvious and important, what we learned about costs was eye-opening. As a result of the current solar legislation and policies, National Grid and Eversource utilities, which serve about 90 percent of the state, will spend almost $600 million combined in 2015 due to net metering and SRECs (the latter causing the lion’s share of the cost), and charge those costs to ratepayers. Yet that $600 million procures for Massachusetts only about 2 percent of the kilowatt hours we use. Translated into real world impact, the average residential electric customer pays about $10 a month more for that 2 percent of electricity coming from solar.
The troubling irony is that there are much cheaper ways to procure clean solar energy. In Connecticut, Eversource and United Illuminating have competitively procured solar for 7-11 cents/kWh, compared to paying 45 cents and more in Massachusetts. We have by far the most expensive solar program in the Northeast. Why pay 4 or 6 times more for the very same clean energy?
As I spoke with others on the Net Metering Task Force, I was surprised that virtually everyone, solar proponents included, agreed that the current solar subsidies are too high. I am troubled that low-income families are disproportionately picking up the tab. To install rooftop solar, one needs to own a roof (most low-income households are renters) and usually have up-front capital to purchase the equipment, or strong enough credit to borrow. “Community solar” projects, which involve having multiple households share in the output of a larger PV system, can serve low-income families, and are a great idea. But they will never reach more than a sliver of these families. Instead, most will simply bear the subsidy costs.
There is a general consensus that the current subsidies are too high – both the Senate solar bill and Gov. Charlie Baker’s proposal imply strong agreement with this, by directing the relevant state agencies to reduce the current rich subsidies over the next few years. In fact, net metering caps – which tend to limit the amount of solar eligible for subsidies – were originally adopted precisely because the solar subsidies were seen as potentially too much for ratepayers to bear if a large number of PV systems were installed.
But both the Senate and governor’s bills would lift the current net metering caps before the subsidy problem is fixed. Under either bill, 700 megawatts (roughly equal to the size of a large central power plant) of additional solar would be added under the current, expensive net metering and SREC rules. With that much more solar PV connected to the grid, a customer with average consumption could pay $15 and more monthly for solar subsidies, yet solar PV would still only provide a very small fraction of the electricity we use. This would make bills for low-income customers even less affordable.
While the pending solar bills move in the direction of setting fair and reasonable prices for PV-generated electricity two or more years down the road, the legislature needs to reduce the price we pay for solar before letting hundreds of megawatts of additional PV systems connect to the grid under the current high subsidy rules. If we did that, we wouldn’t have to worry about net metering caps because we’d be paying the right price for solar. Why pay more?
Charlie Harak is senior energy attorney at the National Consumer Law Center in Boston.
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The specious argument that
the cost of solar energy falls disproportionately on the poor has been made and
disproven in the past, and continues to be untrue. See this Globe article
by John Rogers, a senior energy analyst at the Union of Concerned Scientists –
https://www.bostonglobe.com/opinion/letters/2015/07/05/this-time-tap-brake-growth-solar/5CDwR6m4qkxFS8iZWiPY8I/story.html.
When comparing costs, the author fails to take into account the savings
realized by utilities in reduced demand, reduced peak generation, reduced
transmission costs and emissions, and reduced wear and tear on plant and
equipment resulting from solar generation. In addition, the author
neglects to account for the very real costs, in both economic and societal
terms, of environmental pollution produced by the utilities. And make no
mistake, there is very real and quantifiable economic cost associated with
ongoing pollution, a cost typically born disproportionately by the poor.
Reduced demand? Demand is determined daily 24 hours in advance to schedule es.nough power to cover the projected demand. Not knowing how much solar power will be available tomorrow, power is dispatched for a cloudy day, and if the sun shines the scheduled power is reduced to make room for solar. We pay for the scheduled power, we pay for the solar power. We pay for twice the power we need.
Reduced peak generation? When the sun is shinning during peak demand fossil fuel power plants are running in the background in case a cloud shows up. There is no reduction of Peak Power.
Reduced transmission costs? No Way! Solar generators are compensated at retail rates which cover generation and transmission cost. Solar generators get a free ride on the transmission grid. We make up the difference.
Reduced emissions? No! Fossil fuel generators running in the background waiting for clouds are continuing to burn fuel at reduced efficiency emitting the same level of CO2 regardless of the sunshine.
Wear and tear on plant and equipment actually increases from the additional cycling of the power plants.
The only solar power that achieves the benefits attributed to it are those that are off the grid. And those are far and in between!
Solar generation can be predicted with remarkable accuracy: http://www.elia.be/en/grid-)data/power-generation/Solar-power-generation-data/Graph
Unless +NortheasternEE wants to claim we are not capable of doing, analytically, what Europe does, I don’t see the complaint. But of course we are, and Mark Jacobson of Stanford has shown how, with an appropriately revised grid, this can be turned into an 100% zero Carbon electrical energy source for the United States. (See http://thesolutionsproject.org/.) But that question is actually quite academic.
For the answer to all of this is large energy storage, something which California has just mandated (see http://www.energy.ca.gov/releases/2015_releases/2015-01-08_Energy_Storage_Roadmap_Press_release.pdf) and which, by technology like akaline quinone flow batteries (see http://www.rsc.org/chemistryworld/2015/09/alkaline-flow-battery-renewable-energy-storage batteries and http://www.nature.com/nature/journal/v526/n7575_supp/full/526S92a.html), and which, by the Baker administration’s Energy Storage Initiative (see http://www.mass.gov/eea/energy-utilities-clean-tech/renewable-energy/energy-storage-initiative/), will soon see the light of day here, makes renewable energy a 24 hour a day and a 365 day a year proposition.
Do you think the utility companies like this? Of course not.
Do they have a choice? No. To the extent they continue to be the dinosaurs they are, their business models will gradually fail, and no regulatory capture will save them. See https://www.youtube.com/watch?v=OceeL7i1Qec.
Governor Baker and the legislators on Beacon Hill are hopelessly out of touch. And I’d say, per usual.
Not only has this “crisis” in energy something which has been developing over TEN YEARS, as tracked by the U.S. government’s Energy Information Administration, the Governor’s office, including Patrick’s, and Beacon Hill has steadily made Massachusetts more and more dependent upon greenhouse gas sources of energy, especially upon methane, whose leaks and fugitive emissions are WORSE than Carbon Dioxide. And, year, the Obama Administration has gotten THAT *COMPLETELY* wrong. Our present situation is due both to their lack of foresight and long term nod to big energy and big utility company interests.
No matter. What’s coming is a revolution in energy supply, due to technology and to the free market. Wind and especially solar, combined with energy storage technology, will CRUSH fossil fuels, for electricity production and, so, for heating (via highly efficient air heat pumps), and for transportation. (See https://www.youtube.com/watch?v=_r4sjkkRGkM). There are only two questions.
The first is, and another reason why Baker and Beacon Hill are out of touch, is the urgent need to get to zero Carbon in our emissions. This, while not an existential question, is an ECONOMICALLY existential question. The Global Warming Solutions Act in Massachusetts provides the outline, but no one is looking at 2050 commitments, and everyone really should. Sure, we’ll get to zero by the marketplace EVENTUALLY. But we only have ten years, because otherwise would be economically too difficult, and so it makes sense to crank up incentives to get us there. And PLEASE, let’s not hear protests from the supposedly conservatives, who happily look the other way when tax incentives and subsidies are sprinkled across fossil fuels, not to mention the fact that Cape Wind struggled to try to get built, land wind turbines are opposed, Needham can’t get a community solar farm, while pipeline and methane companies like Spectra and Algonquin can just bulldoze their way across fair communities with Baker, the DOER, and the DPU cheering them on.
The second is, to the degree Baker and Beacon Hill are out of touch with the marketplace, they are, through their policies, heading Massachusetts to a place where it is no longer competitive on energy prices and, so, on business, including high technology. Moreover by doing downright stupid things like transferring risk of building pipelines from companies to taxpayers and ratepayers, they are interfering with the marketplace and saddling Massachusetts which long term financial burdens. These monies could be better spent on renewable energy, or at least diverted to fund to deal with what will happen when Boston, well before 2050, has Atlantic Avenue and Back Bay flooded by climate change-induced sea level rise. See https://www.youtube.com/watch?v=Xxty-DZFuMI for more.
I agree that grid scale storage eliminates all the problems I have listed with the possible exception of skyrocketing rates.
If policymakers allow the combination of wind/solar with energy storage to compete with existing technologies in the power generation market, rates will remain reasonably low. On the other hand, if policymakers continue to favor wind/solar with mandates at above market rates, and storage is developed as projected, there is no guarantee that rates will not skyrocket.
Rates *will* skyrocket for those who remain on the grid, via the “virtuous cycle”, https://goo.gl/bLTCKi, and they will switch to renewables. And *that* is precisely what will drive fossil fuel companies and utilities who do not adapt out of business, in the same way Kodak was driven out of photography. Renewables are, as I’ve said, the biggest wealth creation opportunity in a century.
The “virtuous cycle” is missing a step. Where does storage and its associated cost fit in?
It’s part of the solar component. If I can afford $50,000 to put in rooftop solar, $25,000 for electric air heat pumps, and costs for grid energy increase, surely I can afford another $30,000 for storage. And, in five years, costs for the same package, if trends continue will be under $20,000 altogether.
As long as you disconnect yourself from the grid, to avoid shifting any of the burden to backup your system on the rest of us, I wish you good luck, and sincerely hope that you succeed.
Of course, there are people, including those on Beacon Hill, who are looking to excess electrons from privately capitalized solar PV to help offset the 30% gap coming in Massachusetts because of the shutdown of the coal plants and Pilgrim. If I were to be incentivized to hoard those electrons, naturally the state would need to find energy elsewhere and, in doing so, miss some on their goals on the books, namely, the Global Warming Solutions Act, as well as exacerbate the marginal contribution to climate disruption Massachusetts contributes — which actually isn’t that small.
Those who tout methane as a “bridge” to a zero Carbon future are disingenuous in my opinion because there are no plans at all in the costing and finance for their infrastructure builds, such as pipelines and generators, to retire these new assets by 2050, and begin to do so by 2030, which is the time frame when this needs to be done if we are to hit the proper targets for the +2 degree C limit.
As I understand your argument, the low cost of wind and solar energy is disrupting the free market for electricity, rendering conventional energy sources obsolete. Past examples are, cars replace horses, etc…
First of all the current disruption of the electricity market is the result of legislation and not the workings of the free market. The Green Communities Act (GCA) of 2008, the Global Warming Solutions Act (GWSA), and similar legislation in other states are forcing the integration of wind and solar in the market independent of cost. That disruption is the primary reason coal and nuclear power plants are forced to retire early to be replaced by natural gas.
In the absence on grid scale energy storage, wind and solar, even free, are technically incapable of replacing coal and nuclear. This leaves us with two possible solutions:
(1) Increase the supply of natural gas, which you oppose.
(2) Repeal the GCA and the GWSA, which you probably also oppose.
Secondly, for every potentially disruptive product or technology that succeeds, there are countless others that fail. The flying car, and the keyless typewriter are two that come to mind. The key to any success of wind and solar to succeed in a free market is energy storage. The current availability of energy storage is too small to be effective. While future developments in energy storage look promising, there is no guarantee that the combination of wind/solar and storage will be cheap enough to disrupt fossil fuel off the market.
Beacon Hill created the current energy crisis with the enactment of the GCA and the GWSA. They are about to aggravate the situation with their support of new pipelines to Pennsylvania and new transmission lines to Canada.
We would all be better off, if the folks on Beacon Hill stop playing engineer, and repeal both the GCA and the GWSA, leaving the fate of renewables to the free market.
Actually, no, if you take an assessment like that from Lazards (can also get one of these from Frauenhofer, or IAEA) you see that the UNSUBSIDIZED cost of renewables is quite competitive in 2014 with fossil fuels and that trends will drive these below fossil fuels: https://goo.gl/v7Rb4X, https://goo.gl/GlxBDQ, https://goo.gl/M3nmRY, https://goo.gl/4NPHr4. The last link is to a report on similar things happening with energy storage, and different ways storage can be used in combination with grids. Moreover the IEEE has just released the standard, 1574.4 Guide for Design, Operation, and Integration of Distributed Resource Island Systems with Electric Power Systems, has a magazine, POWER & ENERGY, which is devoted to a lot of this stuff, and a journal on smart grids which talks about the many ways of integrating zero Carbon sources. These are all quite independent of anything Beacon Hill does or did. In fact, Massachusetts is in many ways *significantly* *behind* the rest of the country on these matters, especially, according to the U.S. EIA, and the Union of Concerned Scientists, on its continued reliance upon explosive methane as an electrical generation source. Smart utilities, some working with Argonne National Labs, are moving to introduce the storage you claim is unlikely.
Moreover, even without energy storage, if an individual can get energy from other than the grid for half the year, that’s going to hurt utilities.
And, to your point about technology, in your analogy with flying cars and keyless typewriters, you miss the key points: The problem with fossil fuels are that they are commodities, and they rely upon long, inefficient supply chains to get the energy from their sources to where it is usable. There is NOTHING in that technology which allows it — let alone drives it — to reduce costs. Solar PV and the controls electronics that moves smart grids is semiconductors and software and, accordingly, like the Tesla electric vehicle, are all circuit cards. These have a history, from computers, to digital cameras, to memory, to controls for internal combustion engines, of following cost curves LIKE the Moore’s Law curve, similar to Dennard scaling or Koomey’s Law. It is an exponential growth curve in capability per unit cost. NO commodity-based technology can compete with that.
Oh, and by the way, the MARKET, which does not price in everything people care about, is what gave us all CLIMATE DISRUPTION. All the market knows how to do with such things is to react to damage after it occurs. It is incapable of responding properly to systems whose effects lag changes in controls by some amounts. In other words, the market does not know how to lead a target properly to hit it.
Again, the functionality of wind and solar is tied to the future development of grid scale energy storage. Until recently, studies have ignored the need for storage, and only recently it is being taken into consideration. In my opinion the importance of sufficient storage is being understated and under estimated.
For years advocate for wind and solar have told us storage is unnecessary because the grid is designed to handle the variability of demand. Now, with less than 10% grid penetration, we are told the grid is antiquated and needs to be brought into the 21st century with smart grid technology and storage.
Bottom line is that in the absence of government mandates, the market for both wind and solar will collapse. The reason is, that unlike the successful disruptive technologies of the past, wind and solar power is impotent, with little to no value.
“The grid” itself is a complete creature of government. “The grid” and utility companies are effectively monopolies. When wind tries to put up turbines on land, or just offshore, they get assaulted by lawsuits and people complaining about harm. When an explosive methane pipeline company wants to run through West Roxbury or Boston, even when local officials oppose it, the federal FERC orders the eminent domain to happen. That is extreme asymmetry and demonstrates the regulatory capture which fossil fuel companies, utilites, and their allies exhibit. That is not a free market. Remove ALL that, as well as things like the depletion tax credit, access to drilling on public lands, and we might talk.
Meanwhile, the objective is to kill the grid and the fossil fuel companies whichever way possible, and if that means affecting state government to help do it, that’s no more than fossil fuel lobbyists do, or private funders who pay surreptitiously for towns like Barnstable to file lawsuit after lawsuit.
Your argument is difficult to understand. You started this thread complaining that state government is mishandling the energy crisis praising the free market as the savior due to the disruptive low cost of wind and solar which will eventually replace current generators at a lower cost to ratepayers.
I pointed out that the crisis was initiated by government legislative mandates that are distorting the market, and if it was left to function as a free market wind and solar will fail.
You now reverse course and tell us that the free market is stupid and needs government’s guidance to succeed.
The fact remains that the high rates are not so much the fault of utilities as it is the fault of renewable energy advocates who are succeeding in convincing government to kill the grid, leave fossil fuel deposit stranded, and bet the future on dubious technologies, that so far, have shown that they are not up to the task.
There are two parts. One is the ability of zero Carbon energy to do away with utilities as we know them and fossil fuels. The other is the need to reduce Carbon emissions to zero. The first would, even with subsidies to fossil fuels and none to renewables, run on its own timetable and cause zero Carbon energy to win. However, there *is* a timetable, set by Nature, and the ability of civilization to survive at temperatures and in climates and with supply chains that it needs. That timetable is much shorter than what the Market is able to deliver. Moreover, the Market caused the problem with climate, because prices in the marketplace do not reflect the externalities of both the commons pollution and what Carney of the Bank of England has called the tragedy of the horizons. By that he means markets have no ability to compensate for phase, and this is something I expect *you* to understand since you are an EE.
Please, can we dispense with the insults? I can just as easily insult you by saying that without an engineering degree you are unable to understand the complexities of power generation. But, I am not going to say that!
So, you are advocating that we need to turn over the demand for electricity to the political class because the engineering class, which has taken the lead up to now, is insensitive to Climate Change.
My last word on this is : “Good Luck”!!!!
What insult?
And I *do* have engineering and physics degrees.