It’s a marriage made in heaven: Solar PV and Geothermal Heat Pumps
Part 4 of a 6-Part Series
Oversaturation of the PV Market
The biggest downside to adopting solar PV on a massive scale is what happens to the electricity market.
“Oversaturation” by solar PV can create an “electricity vacuum.” This is where there are so many systems producing wattage that the electric utility begins to worry about its bottom line, afraid it will not sell enough power to stay profitable.
Also causing consternation in the electric utility industry is that as the use of on-site solar PV grows, the traditional relationship between the utility and its customers changes because the users have greater control of their energy consumption.
The Washington Post reported the Edison Electric Institute, an electric utility industry group, saw solar panels as the “grave new threat” to operators of America’s electric grid because of the threat of falling revenues and declining customers (http://www.washingtonpost.com/national/health-science/utilities-sensing-threat-put-squeeze-on-booming-solar-roof-industry/2015/03/07/2d916f88-c1c9-11e4-ad5c-3b8ce89f1b89_story.html.). This was in September 2012.
In the three years since then the industry has campaigned to make solar panels less attractive to ratepayers.
Some electric utilities claim net metering policies are not only unsustainable, but unfair to customers who don’t have solar. They have asked public utility commissions for fee hikes that could put solar panels out of reach for many potential customers. Some of these are:
- The Hawaiian Electric Company stopped high payments to its solar customers; instead it now pays the much lower “avoided cost” of power generation (http://www.washingtonpost.com/national/health-science/utilities-sensing-threat-put-squeeze-on-booming-solar-roof-industry/2015/03/07/2d916f88-c1c9-11e4-ad5c-3b8ce89f1b89_story.html.).
- The California Public Utilities Commission, regulating Pacific Gas and Electric Co., Southern California Edison and San Diego Gas & Electric Co., now requires residential customers to pay a “minimum bill” of at least $10 a month and $5 for low-income households (http://www.pv-tech.org/news/california_electricity_rate_changes_suggest_net_benefit_for_rooftop_solar).
- California’s Sacramento Municipal Utility District has a solar surcharge of $0.0015/kWh.
- Arizona’s Public Service Commission approved a 70¢-per-kilowatt surcharge on electricity for homes with solar panels (http://energyfairness.org/2015/02/net-metering-cost-shift-continues-plague-arizona/).
- New Mexico’s largest utility was not approved to raise rates and charge more for new solar customers to connect to the grid due to a filing technicality. The utility will probably refile (http://www.utilitydive.com/news/new-mexico-regulators-reject-pnms-rate-increase-solar-fee-proposal/398589/).
- The Wisconsin utilities commission approved a similar surcharge for solar users as well as changing from annual to monthly “true-up” net metering calculations (http://midwestenergynews.com/2015/01/16/in-wisconsin-solar-new-math-could-equal-big-impacts/).
- The Oklahoma electric utility grid accepts the excess electricity supplied by PV (or wind turbine). The utility companies credit it to a customer’s bill but do not settle credits at all. They are also allowed a surcharge of an as yet undetermined monthly fee for these customers (http://www.climatecentral.org/news/oklahoma-solar-surcharge-bill-becomes-law-17335).
For a more in-depth review of this issue, please read John Farrell’s 4-part blog series, Beyond Utility 2.0.
This net-metering issue is a problem invented by these utilities themselves by settling credits using retail rates. In New York, electric utilities pay PV owners the avoided cost of the electricity, which is the same wholesale rate commercial power plants are paid.
By paying retail rates the utilities are intentionally cutting into their profits to bolster their claim of needing the surcharge. Playing this shell game may serve to undermine the popularity of solar PV and discourage homeowners from going solar.
Another concern of electric utilities is the possible loss of its customer base as a result of continuing advances in more efficient electricity storage systems (ESSs). These enable the combination of rooftop solar PV systems and on-site electricity storage to collect and store electricity for use when sunlight is unavailable or there is a power outage. As this technology becomes more feasible and affordable there is the likelihood customers may be able to go off-grid.
How can this “oversaturation” be resolved?
Next Blog: The Green Marriage
