The price of solar electric panels has finally (2013) fallen to $1.00US per nominal watt* and even lower. This is the price which was often quoted as needed to make solar-electric financially viable. The rate of solar panel uptake has increased but not as much as it should be. What is missing??
*When a panel is facing directly into the noon day sun, it will produce a certain amount of power. This is it's nominal wattage and it will be sold as such. Of course, when the sun hits the panel at a shallower angle or there are clouds, the actual power produced will be less.
First off, let me say that this blog is predicated on the assumption that your government is committed to the premise that the uptake of small renewable generation feeding into the grid is good for the country. You can take this with a grain or a spoon full of salt depending on which jurisdiction you live in. You will have all sorts of vested interests trying to scupper the uptake of small generation and some governments will be following along like puppy dogs. However, for the sake of the argument, let's suspend belief and assume that your government has the best interest of the country and her citizens at heart.
What is missing is a defined relationship between the small generator and their power company that is fair to both and punitive to neither. Short of a revolution in battery technology (and there may be one in the pipe line) it is not worth while for you to go off the grid. When you generate an excess of power, it will be used by someone else and when you need a top up, the power company will provide it. The Power company is essentially acting as your battery bank. A diffuse power generating system has many benefits for the country. It is almost anti-social and certainly expensive for you to go it alone. Let's look at some of the considerations we should be concerned about.
Calculation Period
Say, in a hypothetical month, you are producing exactly the same amount of power that you use. Your power bill for that month should be zero, correct? Not so fast. It depends on the calculation period. Let's assume, further, that during half of the days of the month you produced excess power each day and half of the days you needed a top up. Let's assume, further, that the power company charges you 20c/kWh* top up and gives you 10c/kWh for your excess**. If the power company looks at the net top up or excess you used/needed over the month, your monthly bill will be zero. If however, they do the calculation each day and tot up the result for each day, you will be paying quite a bit. This argument extends to the seasons. In summer you will produce more energy than you need; in winter less. If you have sized your system to more or less meet your needs, if the calculation period is one month, you will be paying quite a bit for the lean months and getting a little for the good months. If the calculation period is one year, it is of little interest how much you are charged for your net power use or how much you are paid for the excess power you produce. For the good of the small generator, the longer the calculation period the better.
*kWh - kilowatt hour - a measure of energy. The Kilowatt is a measure of power.
** Nothing unfair about this. It is one, amongst a number of ways to reflect the fact that the power company has to build and maintain the distribution network.
Single vs Double Metering
With single metering many of the problems fall away. You turn the meter forward when you are using excess energy and turn it back when your generation exceeds your use. This is often referred to as "net metering"
However with double metering there are a number of possibilities. The German system is the most insidious. In Germany you have one meter that measures every kWh you produce and one that measures every kWh you use. This is not the excess you use above what you are generating or the excess you export above what you are using. It is every kWh generated or used. However, a double metering system can be set up so that you use your own generated power instead of the German system (you always thought that this is how it works, didn't you?). The outgoing meter measures the excess you produce and the incoming meter,measures your top up.
Let's assume your power company is not using the German system so you only draw a top up or export your excess. You are chugging along, working on your computer, pretty well producing the same amount of power that you are using. You put the kettle on. Suddenly you need to suck some power from the grid. The incoming meter records this and you will be charged for the excess at the company rate. The kettle finishes heating your coffee water so you turn off the computer and go for a break. You are now feeding power into the grid. You get the reduced rate for the power you produce. This minute by minute measurement is even worse than a daily calculation period. Your day is micro divided and you are charged for your instantaneous net use and paid for your instantaneous net production* (at the differential rate). Of course the German system is even worse. You don't even have the opportunity to use power you produce.
*I just struck me that there may be a fairly easy solution to this problem; the problem being that any instant you are producing excess power your output meter is recording it and any instance that you are using power, your input meter is recording it. Simply install a modest amount of battery. Say, for the sake of the argument, two lead acid truck batteries. Then you just need the electronics to ensure that you access the power in these batteries before drawing from the grid and that your power goes first into these batteries before you export to the grid. This would probably give you a couple of hours of buffering.
Now we come to taxation. Do you remember that at the outset, I said we will pretend that your government recognizes the benefit of small diffuse generation and will face down all the vested interests (wouldn't that be nice for a change). With the German system in which every kWh you produce and every kWh you use is measured or with the somewhat more benign system where your meters only measure your excess or your top up, you will pay income tax at your marginal rate for any revenue you receive and will pay GST (VAT) for every kWh you buy. If the government truly wants diffuse generation with all it's benefits, they should restrain themselves from taxing the system. Taxation has two functions. One is to collect revenue so that the government can do her good works. The other is to direct the path of society. It is hardly directing us to increase our uptake of solar technology by trying to milk the calf before it is even a cow.
Of course, the power company could say that they will simply subtract the excess power you use from the excess power you produce and charge or pay you, depending on whether your balance is positive or negative. The government will then charge you GST if you buy some net electricity or charge you income tax if you earn some money from your excess. If this is what they intend, why then bother with the expense of a second meter. Far simpler to put in one meter which turns backwards when you are producing excess power. If the power company and the government does try to peddle this line, watch out. Suppose they say "we will have double metering but you will be charged or paid depending on the difference between these two amounts". They are thinking ahead and hoping you are not. At any time in the future they can decide to change the rules. If you are double metered, they have you by the short and curlies. But.......You have probably spotted the problem with single metering.
With single metering, the power company is essentially paying you the same for the power you produce and power you use (except for any excess or deficit but that is another story). The solution is simple. There must be a line charge which reflects the fact that they must build and maintain the lines. However, we come to another fish hook. The power company will be tempted to charge the simple user a larger price for their power and a very small line charge. They don't need a line charge if they are getting a good price for the power they sell you.
For the small generator, however, they will charge a very small charge for electricity (and hence you will get very little for the power you produce) but you will pay a large line charge. The solution is simple. It must be legislated that the price per kWh and the line charge are the same for both types of customers. The power company will work out the formula that optimizes their profits but will not be able to shaft either type of customer. Incidentally, when there are few customers generating power, they will focus their attention on the simple user and this will be very good for the small generator. This is great since it will greatly encourage the uptake of solar electricity at this early stage. As more and more of us are generating our own power, the formula will change.
I have only touched on a couple of consideration to think about when structuring the relationship between the power company and the small generator/user. Very little is the way it seems at first glance. For Instance, in Germany, they give you three times the rate for the power you produce than for the power you buy. Are you ever suspicious when something seems too good to be true. Most power users don't look any deeper. The German system is far less beneficial to the customer than it appears to be at first glance and increases the cost of power to all consumers.
*When a panel is facing directly into the noon day sun, it will produce a certain amount of power. This is it's nominal wattage and it will be sold as such. Of course, when the sun hits the panel at a shallower angle or there are clouds, the actual power produced will be less.
First off, let me say that this blog is predicated on the assumption that your government is committed to the premise that the uptake of small renewable generation feeding into the grid is good for the country. You can take this with a grain or a spoon full of salt depending on which jurisdiction you live in. You will have all sorts of vested interests trying to scupper the uptake of small generation and some governments will be following along like puppy dogs. However, for the sake of the argument, let's suspend belief and assume that your government has the best interest of the country and her citizens at heart.
What is missing is a defined relationship between the small generator and their power company that is fair to both and punitive to neither. Short of a revolution in battery technology (and there may be one in the pipe line) it is not worth while for you to go off the grid. When you generate an excess of power, it will be used by someone else and when you need a top up, the power company will provide it. The Power company is essentially acting as your battery bank. A diffuse power generating system has many benefits for the country. It is almost anti-social and certainly expensive for you to go it alone. Let's look at some of the considerations we should be concerned about.
Calculation Period
Say, in a hypothetical month, you are producing exactly the same amount of power that you use. Your power bill for that month should be zero, correct? Not so fast. It depends on the calculation period. Let's assume, further, that during half of the days of the month you produced excess power each day and half of the days you needed a top up. Let's assume, further, that the power company charges you 20c/kWh* top up and gives you 10c/kWh for your excess**. If the power company looks at the net top up or excess you used/needed over the month, your monthly bill will be zero. If however, they do the calculation each day and tot up the result for each day, you will be paying quite a bit. This argument extends to the seasons. In summer you will produce more energy than you need; in winter less. If you have sized your system to more or less meet your needs, if the calculation period is one month, you will be paying quite a bit for the lean months and getting a little for the good months. If the calculation period is one year, it is of little interest how much you are charged for your net power use or how much you are paid for the excess power you produce. For the good of the small generator, the longer the calculation period the better.
*kWh - kilowatt hour - a measure of energy. The Kilowatt is a measure of power.
** Nothing unfair about this. It is one, amongst a number of ways to reflect the fact that the power company has to build and maintain the distribution network.
Single vs Double Metering
With single metering many of the problems fall away. You turn the meter forward when you are using excess energy and turn it back when your generation exceeds your use. This is often referred to as "net metering"
However with double metering there are a number of possibilities. The German system is the most insidious. In Germany you have one meter that measures every kWh you produce and one that measures every kWh you use. This is not the excess you use above what you are generating or the excess you export above what you are using. It is every kWh generated or used. However, a double metering system can be set up so that you use your own generated power instead of the German system (you always thought that this is how it works, didn't you?). The outgoing meter measures the excess you produce and the incoming meter,measures your top up.
Let's assume your power company is not using the German system so you only draw a top up or export your excess. You are chugging along, working on your computer, pretty well producing the same amount of power that you are using. You put the kettle on. Suddenly you need to suck some power from the grid. The incoming meter records this and you will be charged for the excess at the company rate. The kettle finishes heating your coffee water so you turn off the computer and go for a break. You are now feeding power into the grid. You get the reduced rate for the power you produce. This minute by minute measurement is even worse than a daily calculation period. Your day is micro divided and you are charged for your instantaneous net use and paid for your instantaneous net production* (at the differential rate). Of course the German system is even worse. You don't even have the opportunity to use power you produce.
*I just struck me that there may be a fairly easy solution to this problem; the problem being that any instant you are producing excess power your output meter is recording it and any instance that you are using power, your input meter is recording it. Simply install a modest amount of battery. Say, for the sake of the argument, two lead acid truck batteries. Then you just need the electronics to ensure that you access the power in these batteries before drawing from the grid and that your power goes first into these batteries before you export to the grid. This would probably give you a couple of hours of buffering.
Now we come to taxation. Do you remember that at the outset, I said we will pretend that your government recognizes the benefit of small diffuse generation and will face down all the vested interests (wouldn't that be nice for a change). With the German system in which every kWh you produce and every kWh you use is measured or with the somewhat more benign system where your meters only measure your excess or your top up, you will pay income tax at your marginal rate for any revenue you receive and will pay GST (VAT) for every kWh you buy. If the government truly wants diffuse generation with all it's benefits, they should restrain themselves from taxing the system. Taxation has two functions. One is to collect revenue so that the government can do her good works. The other is to direct the path of society. It is hardly directing us to increase our uptake of solar technology by trying to milk the calf before it is even a cow.
Of course, the power company could say that they will simply subtract the excess power you use from the excess power you produce and charge or pay you, depending on whether your balance is positive or negative. The government will then charge you GST if you buy some net electricity or charge you income tax if you earn some money from your excess. If this is what they intend, why then bother with the expense of a second meter. Far simpler to put in one meter which turns backwards when you are producing excess power. If the power company and the government does try to peddle this line, watch out. Suppose they say "we will have double metering but you will be charged or paid depending on the difference between these two amounts". They are thinking ahead and hoping you are not. At any time in the future they can decide to change the rules. If you are double metered, they have you by the short and curlies. But.......You have probably spotted the problem with single metering.
With single metering, the power company is essentially paying you the same for the power you produce and power you use (except for any excess or deficit but that is another story). The solution is simple. There must be a line charge which reflects the fact that they must build and maintain the lines. However, we come to another fish hook. The power company will be tempted to charge the simple user a larger price for their power and a very small line charge. They don't need a line charge if they are getting a good price for the power they sell you.
For the small generator, however, they will charge a very small charge for electricity (and hence you will get very little for the power you produce) but you will pay a large line charge. The solution is simple. It must be legislated that the price per kWh and the line charge are the same for both types of customers. The power company will work out the formula that optimizes their profits but will not be able to shaft either type of customer. Incidentally, when there are few customers generating power, they will focus their attention on the simple user and this will be very good for the small generator. This is great since it will greatly encourage the uptake of solar electricity at this early stage. As more and more of us are generating our own power, the formula will change.
I have only touched on a couple of consideration to think about when structuring the relationship between the power company and the small generator/user. Very little is the way it seems at first glance. For Instance, in Germany, they give you three times the rate for the power you produce than for the power you buy. Are you ever suspicious when something seems too good to be true. Most power users don't look any deeper. The German system is far less beneficial to the customer than it appears to be at first glance and increases the cost of power to all consumers.
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