The Politics of Electrical Rates

[slinthicum]

In analyzing the viability of installing a solar system on my Homeowners Association (HOA) clubhouse, the deciding factor was the fact that the HOA is charged at the commercial rate for electricity (averaging $0.26/kWh) as opposed to the residential rate (averaging around $0.40kWh). The lower rate serves as a disincentive and I wonder if it serves as a reason we see few solar installations on flat roof warehouse-style buildings while flying over buildings here in SoCal. Thoughts?

[SunEagle]

In analyzing the viability of installing a solar system on my Homeowners Association (HOA) clubhouse, the deciding factor was the fact that the HOA is charged at the commercial rate for electricity (averaging $0.26/kWh) as opposed to the residential rate (averaging around $0.40kWh). The lower rate serves as a disincentive and I wonder if it serves as a reason we see few solar installations on flat roof warehouse-style buildings while flying over buildings here in SoCal. Thoughts?

Most flat roof installations require a framework that is angle so the panels can capture more sunlight. Depending on what latitude the roof is at will determine the angle of the panels for optimum collection. Unfortunately the higher the angle the more the wind comes into play which may require a very strong anchor system. Those angled frameworks are usually engineered based on the building codes for the area.

As for the payback of a solar pv system with a $0.26/kWh I would think that you could calculate an ok ROI based on what the final installation cost is. For me in Southwest Florida with a rate about $0.09/kWh an installation that is over $2/watt would calculate out to over 12 year payback which is too long for my blood.

[slinthicum]

Twelve years. The political winds here in California have a much shorter life given the legislative controls exercised by our major utility providers (PG&E, SoCalEdison, SDG&E). Still waiting for the revisions to NEM 3.0.

[SunEagle]

Twelve years. The political winds here in California have a much shorter life given the legislative controls exercised by our major utility providers (PG&E, SoCalEdison, SDG&E). Still waiting for the revisions to NEM 3.0.

My POCO is Withlacoochee River Electric. Their rates have been pretty stable since 2017 and while they may go up I do not feel they will get anywhere near what the CA POCO's are charging. So calculating a reasonable payback in CA is easier then here in Florida.

I think the same issue is for people that live in a lot of Texas. The rates there are very low and solar is almost impossible to justify unless you are your and have both the time and money to purchase a system.

[slinthicum]

In California we face a bit of backlash that goes something like this. (1) people with money can buy a solar system, adequate enough to meet their power needs and no longer need to purchase electricity from their utility provider. (2) People who can't afford a system have no choice but to continue to purchase from their utility provider. (3) With fewer customers and continuing rising costs for infrastructure and other expenses, utilities have no choice but to raise the costs and these raises don't impact people with solar systems. (4) Hence the reason those with solar systems need to pay additional fees, irrespective of whether they store excess production on the grid or in batteries.

#4 will likely come, it is just a matter of time, and as a consequence, the number of new residential solar installations will slow down.

[Ampster]

In analyzing the viability of installing a solar system on my Homeowners Association (HOA) clubhouse, the deciding factor was the fact that the HOA is charged at the commercial rate for electricity (averaging $0.26/kWh) as opposed to the residential rate (averaging around $0.40kWh). The lower rate serves as a disincentive and I wonder if it serves as a reason we see few solar installations on flat roof warehouse-style buildings while flying over buildings here in SoCal. Thoughts?

Most IOUs require converting to TOU rates so averages are meaningless for making decisions. In fact, despite the greater production for a due South orientation, I see lots of ground mount installations in farmland where a more westerly orientation must have been the optimal economic return.

[Ampster]

In California we face a bit of backlash that goes something like this. ....... Hence the reason those with solar systems need to pay additional fees, irrespective of whether they store excess production on the grid or in batteries.

#4 will likely come, it is just a matter of time, and as a consequence, the number of new residential solar installations will slow down.

I feel some obligation to pay my fair share of the fixed costs of the infrastructure that benefits me. However, I am also frustrated with the poor strategic decisions that the IOUs are making. Consequently my plan has been to install more PV capacity "behind the meter" to avoid any future tax based on capacity. Of course that will be done with a building permit. my hybrid inverter allows me to control the amount exported so I can stay within the limits of my PTO. I have 6.6 kW per my PTO and plan on adding another 4 to 5 kW behind the meter.

[SunEagle]

In California we face a bit of backlash that goes something like this. (1) people with money can buy a solar system, adequate enough to meet their power needs and no longer need to purchase electricity from their utility provider. (2) People who can't afford a system have no choice but to continue to purchase from their utility provider. (3) With fewer customers and continuing rising costs for infrastructure and other expenses, utilities have no choice but to raise the costs and these raises don't impact people with solar systems. (4) Hence the reason those with solar systems need to pay additional fees, irrespective of whether they store excess production on the grid or in batteries.

#4 will likely come, it is just a matter of time, and as a consequence, the number of new residential solar installations will slow down.

That is interesting. You just supported my claim in another thread that costs do not always drop if consumption goes down. The thread was on gas prices but I have seen water costs go up when people used less during drought conditions. My fear is that electrical costs will continue to rise for POCO's that are not getting enough due to home solar systems. As you stated in (2) there are a lot of people that either can't afford solar or live where they can't install solar. They will end up paying more.

[J.P.M.]

That is interesting. You just supported my claim in another thread that costs do not always drop if consumption goes down. The thread was on gas prices but I have seen water costs go up when people used less during drought conditions. My fear is that electrical costs will continue to rise for POCO's that are not getting enough due to home solar systems. As you stated in (2) there are a lot of people that either can't afford solar or live where they can't install solar. They will end up paying more.

I've been around alternate energy including solar for going on a half century. It didn't take me long to come to several conclusions:

1.) Subsidies in the form of rebates and tax credits are a bad means of helping a developing technology such as solar energy. It does little to aid the less well heeled (who probably rent anyway). It creates a false price floor with mfgs. and vendors increasing prices to the extent of possible price benefit of credits/rebates and still allows them to show a save story that is, in effect, a fiction and a lie. Simply put, my guess is that, for example, a 30 % federal tax credit means prices of equipment were probably about 30 % higher than they would be than if the credit had never existed.

2.) In addition, all those inflated prices vendors and mfgs. are charging act as enabling factors that allow those crappy vendors and mfgs. who, without the inflated prices would otherwise go out of business (or not go into the solar business at all), to sell garbage products that give alternate energy a bad name. That very thing happened with residential solar thermal back in the 70's and contributed to its muted acceptance (and a bunch of derelict thermal systems on roofs still to be seen in many places like my HOA). I was there back in the day and saw lots of such crap product from crap vendors who disappeared like roaches when the lights go on when the tax credits expired.

3.) Net metering is pretty much energy welfare for the rich. Is now and always has been. It's also a poor business model. It makes no sense when a POCO providing a product and a service is mandated by law or gov. policy to pay the same price to their customers for a product as what they sell it for. On top of that, and as others have noted on this thread and elsewhere, especially so when those getting all the advantages and breaks of net metering are pretty much all those who need the help the least.

4.) It seemed to me when PV first got rolling that it would have made a lot of sense (and also stopped a lot of POCO whining about (un)fairness of net metering along the way) if POCOs, instead of bitching about net metering had instead gone into the PV business and leased residential rooftop space, put PV on it, and then sold the output and serviced the equipment on those roofs to the owners of those roofs.

All the above are examples of ways how government involvement in solar energy implementation and policy has slowed innovation and new product development. It has also not helped the very folks who need it most and examples of government B.S. help at its finest.

Somewhat Ironically (it seems to me) most of the folks I see and hear bitching about continuing oil and nuke gov. subsidies and tax breaks are usually a lot of the same people who decry the end of gov. mandated net metering and solar tax credits. I say get rid of all such gov. largess and chicanery. All of it.

[slinthicum]

I'm not sure there is a real connection, but this discussion brings to mind Dandy Don Meredith singing "turn out the lights, the party's over."