Solar Technology Advances, Solar Policy Backtracks

by James A. Bacon

Joshua Choi, a University of Virginia chemical engineer, is part of a research team that has discovered a new class of materials, metal halide perovskites, that can be sprayed onto a substrate where they crystallize into a thin film that captures energy in a solar cell. There are many hurdles to come before the discovery can be commercialized, but according to Science Daily, the materials offers the potential of dramatically lowering the cost of solar energy.

Of all forms of energy production, solar is on a productivity curve most closely resembling to a Moore’s Law, which described the process of in which microchips doubled their processing power every year or two. As scientists devise more efficient ways to convert sunlight into electricity — and Choi’s innovation is only one of many — the cost of solar power seems destined to head lower.

One would think that the prospects for solar power look better than ever. But the electricity source is experiencing a backlash in the very states and countries that moved most aggressively to adopt it, according to the New York Times.

Spain, Great Britain and Germany all are scaling back their regulatory support for solar energy. Meanwhile, in the U.S., utilities and regulators in California, Hawaii, Nevada and Arizona have backed off their generous backing of solar, and the Times says other states may follow their example.

While the cost of solar is getting cheaper, solar panels aren’t producing when the demand is greatest. Solar production peaks during mid-day, but the peak demand for electricity — from air-conditioning in the late afternoon, and home appliances when people get home from work — occurs a few hours later. The discrepancy does not create a problem when solar generates electricity on a small scale; it is a problem when solar and other intermittent power sources comprise a majority of power production.

“The challenge,” suggests the Times article, “is to design a new kind of rate system — one that accurately values electricity that can now flow in different directions and at different volumes at different times of day. It can also, depending on the location and level of demand, either increase or relieve strain on the grid.”

Bacon’s bottom line: Solar and wind are coming. PJM Interconnection, the regional transmission organization of which Virginia electric utilities are a part, estimates that it can accommodate up to 30% renewable electricity without risking service interruptions. (An advantage of a regional organization is that sharing electricity over a broad geographic area smooths out the local spikes in solar and wind generation.) Virginia is far from achieving that level of renewables penetration, so the challenges experienced by other states and countries are not likely to crop up here anytime soon.

One could argue that Virginia’s regulatory go-slow approach to renewables has saved the Old Dominion from the confusion and disruption that prompted the early adopters to backtrack. Some solar advocates seem to live in a la-la land disconnected from such realities. But one could likewise argue that we need to start thinking about a regulatory framework that accommodates more wind and solar, or others will figure it out long before we do, leaving Virginia at a competitive disadvantage. I don’t see that discussion occurring right now. We need to begin.

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21 responses to “Solar Technology Advances, Solar Policy Backtracks

  1. well – the horrible truth is – that scale matters – and utility-generated electricity – is probably always going to be cheaper than consumer-generated electricity.

    net-metering needs to be fair to the utility also.

    and yes- we should use supply/demand to set the price of electricity – and let people decide what they want to pay and what they want to defer or use less of… the whole idea of providing any amount of electricity at anytime to anyone – has consequences.

    I contrast this to HOT lanes where the price of the toll is determined by the demand at any point in time and it’s amusing to hear folks who say the govt is inefficient and the private sector better – rail against the private sector setting supply/demand prices.

    same deal with electricity.

    If electricity cost twice as much in high demand periods -what would happen?

    it’s a tricky calculation that even the utilities are a bit afraid of.

    this is different than making electricity more expensive all the time – it makes electricity more expensive when it costs more to deliver.

    what would we do if electricity became much more expensive at high demand periods?

    would we install solar panels? probably not.

    would we take steps to reduce our consumption? you bet your fanny.

    what if you had a device showing how much you were paying for electricity in real-time on your counter-top and you saw that you were going to pay $10-20 for electricity in the evening.. not only tonight but tomorrow night, the night after, etc – would you take action ?

    well yes.. you’d complain to everyone and their dog for sure – but at the end of the day- would you do something?

    most of us – will.. I predict.

    will you choose to sweat on the couch and not watch TV or use your computer?

    ha ha ha bahahahahhh – nope.

    you’re going to do something else.. I bet… right?

    p.s. Don’t expect Donald Trump to help you… 😉

    • You note that scale matters with solar. But not as much as has been advertised by utilities. The “soft costs” of residential solar such as marketing, site analysis, project mobilization, permitting, grid tie-in, etc. Are higher when repeated over hundreds of residential installations compared to a single utility-scale solar development.

      However, the expense of added transmission is not included in the cost of a utility solar plant although it is essential for its operation. The benefit to the grid of distributed generation is not credited to the cost of residential solar.

      Time of Use (TOU) rates are helpful in giving customers price signals about when they choose to use electricity. Smart meters are needed to do that effectively and they have not been rolled out in great numbers in other than high-density urban areas.

      High rates of solar penetration might flip flop rates so night-time rates become more expensive than daytime rates. But that is a ways into the future.

  2. Thanks, Jim, for your continuing attention to this issue.

    I’m not as concerned that Virginia isn’t ready for lots more solar. But you are correct, the presence of lots of distributed solar generation (solar DG) accelerates the need for more widespread use of time-of-day meters and time-of-day or real-time pricing that reflects the wholesale market (PJM) price. And we need to see lots more education of the public how to take advantage of such variable pricing by, for example, when they do certain electric-intensive chores. Suppose you have an electric car, and the price of the juice to recharge it was cheapest in the afternoon when all that solar DG was available; shouldn’t you have an incentive to plug it in at the right time? Suppose you could heat your house cheapest by heating a large tank of water during the day, then pumping the heated water throughout the house at night?

    These are not new concepts — in fact they go back to the Carter years and PURPA — but it takes a long time to get those more-expensive meters in place and for people to adjust, and we are still just talking about it.

    • It’s good you bring this up. Thermal storage might be very useful to shift loads and use the excess solar capacity in the daytime and gain value from it later in the day. Especially until battery storage becomes more cost effective.

      Tesla wants to merge with its SolarCity cousin to create an energy company that uses electric cars as a storage solution for solar panels in an integrated grid.

      It looks like some of PJM’s new policies requiring more reliable year-round generation for their auctions has put a bit of a damper on renewables in the PJM zone. Do you know anything more about that?

  3. Thanks for this post … yes this discussion needs to begin and no Larry, Distributed generation will soon be cheaper and actually seve us all better.

    Our utility systems are at a crossroad. One road requires our utilities, our regulators and our legislators to re-imagine our electricity system, rethinking the old monopoly rate regulations that reward centralized fossil fuel generation. This reimagined system will require a grid that is no longer the rigid one-directional distributer of electricity, but rather one that finds value in resources that generate and store electricity where it is used.

    This rebuilt system, designed as an interactive network, not a one directional, top-down grid, will actually be a cheaper system. In places where this new system is developing, like New England, NY, CA and HI, the results show that the redesigned system is more reliable and more resilient, as well as more secure from storms and potential terror attack.

    If we fail to take that road, the alternative path will lead to ‘grid defection’: customers choosing to leave the grid and provide their own electricity by installing solar with batteries and retrofitting their buildings to use less. One thing is certain: a one directional, top down, monopolistic, state-regulated system is NOT the future.

    A new report from the North American Electric Reliability Corporation (NERC) concludes “significant changes are occurring” in the way we generate and use electricity. As NERC concluded, changes to the energy mix, and to the level of demand, are happening regardless of national regulations. They are happening because it is time to rebuild our aging energy infrastructure. They are happening because the technology is now available to create a new kind of energy system, and because this new system, build with new resources, will protect our air and our water as well as our atmosphere.

    The above was lifted from a Guest Post by me at http://www.powerforthep[eople.org

    And I would add the RMI has seen NERC’s vision for years and years. The best part of what RMI does is to bring together ALL stakeholders to define the path forward together … with input from all sides.

    • “The best part of what RMI does is to bring together ALL stakeholders to define the path forward together … with input from all sides.”

      That is probably the most important thing that can be done – make sure all the stakeholders, including those who dissent from the approach to be taken or who have different goals, have a seat at the table. Too often, only some of the stakeholders are invited, and then, government officials wonder why there is a firestorm when decisions are made.

      I am not defending the status quo, but based on what I’ve seen over the last 38 plus years in changes in telecom technology and markets, I think there is a bona fide risk that a number of people and communities will suffer from a change from the present electricity model to a more dispersed one.

      I think there is a good possibility we will see substantial grid defection under any model. Older homes aren’t going to get retrofitted. And older people will likely stick with the existing grid even as prices rise. These issues should be discussed now. At least, if these results occur, they will have been knowing decisions made.

      • I would like to hear more about why you think that more distributed generation would lead to more grid defection.

        Electricity does not easily allow for wireless connections as does Telco. Even with lower cost batteries to help commercial and industrial customers with demand charges (and maybe a few residential ones), there is a great benefit to being connected to the grid. Energy efficiency and distributed generation should lower the cost of electricity compared to business as usual.

        If we find innovative ways to finance energy efficiency for low income users, they have a great deal to gain from a modern energy system because they are disproportionately inefficient users. They pay a lot more for the comfort that they get than higher income users. (Not higher bills just more per unit of comfort).

        This is one of the great benefits I see from a modern system with different rate incentives for utilities and ratepayers. I respect your opinions and would like to learn more about why you see this as a problem.

        • I think that we will see distributed electric sources in areas where big and successful businesses are located – Tysons & Reston Towne Center and not in areas with less profitable businesses – Annandale, Route 1. Ditto for upper income residential areas – Tysons, Great Falls and less in places like the Falls Church section of Fairfax County. New houses will be built energy efficient, while older ones will not. And I don’t think the public fisc can afford to retrofit older homes, rural homes and low-rent buildings. Likewise, who will put the local generation facilities in these same communities? And if and when it’s done, it will be decades later. A lot of people will continue to rely on the existing electric generation and distribution systems. I think we need to assume this as a given.

          It’s similar to how high-speed broadband has been deployed and adopted. It isn’t widely available in rural markets or in a lot of low-income communities, even with federal universal service subsidies.

          Communities and businesses with local electricity will push to avoid paying costs for power they don’t use or networks they don’t use. (I could support a charge that covered all the standby costs for those who stay connected for security, but don’t expect a cost-recovering charge will be adopted.)

          I’m not opposed to change, but I think we need to realize that, for much of the U.S. and for many years, business as usual will continue. I think the government needs to understand and address that fact.

    • TMT, I think TomH is correct, we are NOT going to see the grid defections predicted by CA&W. As he says, there really is no alternative way to distribute electricity satisfactorily and cheaply other than by wire, and the economic benefits of sharing diversity of generation and diversity of consumption are too great for most consumers to choose isolation. But, as she says, “This reimagined [grid] will require a grid that is no longer the rigid one-directional distributer of electricity, but rather one that finds value in resources that generate and store electricity where it is used.” I also think, in the eastern US, we are closer to that bi-directional grid than she realizes. It already works that way at PJM for the relatively few users who take advantage of it. There will have to be bidirectionality adjustments by many local distribution companies if DG multiplies rapidly enough, but that is a matter of reaction time and planning to accommodate it most efficiently, not a question of categorical opposition to it.

      The analogy with the communications revolution is inviting but, I believe, fundamentally misleading in one respect: there is no over-the-air alternative; so, the question is limited to making the grid work better, not moving to two classes of citizens — those on the grid versus those off. You say, “I think there is a bona fide risk that a number of people and communities will suffer from a change from the present electricity model to a more dispersed one. . . . A lot of people will continue to rely on the existing electric generation and distribution systems. I think we need to assume this as a given. . . . It’s similar to how high-speed broadband has been deployed and adopted. It isn’t widely available in rural markets or in a lot of low-income communities, even with federal universal service subsidies.” The implication is that off-grid distributed electricity generation is an inevitable (and desirable) end-state, like broadband without the copper network, that will be available for those who can pay for it but the rest of society will be left behind. I don’t think that is the end-state. For electricity the end state is remaining on the grid, but with cost reductions achieved in part through parallel distributed generation, primarily solar, and time shifting of use of the grid through better batteries and other techniques. Where I completely agree with you is that those ongoing electricity cost reductions will come to those who can pay the capital cost of the d.g. and switching facilities to achieve them: investing money to save money.

      You also say, “New houses will be built energy efficient, while older ones will not. And I don’t think the public fisc can afford to retrofit older homes, rural homes and low-rent buildings.” This is an extremely important point. Improving the energy efficiency of HOMES is a huge potential source of electricity cost saving for consumers, just as there are savings from time shifting of consumption, but the people who would benefit the most are rarely the ones who have the cash or the time or the initiative or the economic incentive to tear up walls and fix the poor insulation and the drafty windows and the inefficient old furnaces. And, in many circumstances, the utility saves money through demand abatement too — and thus it can benefit all ratepayers if the utility spends money on improving homeowner energy efficiency. Awareness of this is something RMI has done a good job of preaching. The problem here for the utility is obvious: together, reduced utility sales and reduced utility investment in facilities expansion hurts profits. This is one of those situations where public policy has to drive a result (through regulatory incentives to utilities) that doesn’t necessarily align with market principles. Some people see utility hostility to d.g. and would also try to incentivize the utility to support d.g. more strongly. But, unlike CA&W, I don’t think we have a serious problem there, at least in the long run.

      • Thank you Acbar for your excellent reply.

        TMT is correct in that we will see a continuation of existing technologies as new choices become available. But if we do not begin to discuss ways to remake our energy system, customers will pay more, especially those with low incomes.

        In Jim’s previous article on the efficiency of the new combined cycle plants, he noted that Dominion expects to see natural gas prices in excess of $5 mcf by 2025. In June, the prices at the Dominion South Hub (the source for the Atlantic Coast Pipeline) were $1.90 mcf and $1.40 at the hub supplying the Transco spur to the Brunswick plant. With fuel comprising up to 50% of the energy cost from a combined cycle plant, increasing fuel costs by 3.5 times puts a huge burden on ratepayers.

        The business as usual approach will not turn out well for Virginia citizens or Virginia’s economy. We must begin to explore other means to have the comfort we want in ways that serve both customers and utility shareholders. Energy efficiency and solar are important contributors to lowering costs.

        Public, commercial and industrial buildings can have a huge and immediate payback from energy efficiency measures and distributed solar (and load shifting or storage options).

        Residential applications might proceed more slowly and have a lower percentage of improvements. However, if we could find a way to increase the energy efficiency of substandard housing, everyone would benefit. Low-income residents are almost in a survival mode when it becomes very hot or very cold, so they contribute much more to the peaks than to year-round energy use.

        Much of the substandard housing is for rentals, which complicates the situation. Building owners will not pay for improvements. Higher utility bills must be borne by the tenants.

        Utilities could pay for the efficiency improvements and charge residents a monthly amount (including interest) on the monthly bill, which is now less because of the efficiency improvements. This would continue until the cost of the improvements, plus the utilities added billing expenses are paid in full. If a tenant moves, the new resident continues paying on their monthly bills. Eventually, the new tenants are more comfortable and have much lower bills. The building owner has added value to their property at no expense to them. And all other customers have lower bills because the peak has been reduced.

        There can be snags. What happens if a building is sold before the amount is repaid. Should the utility be allowed to have a lien on the building until amount is repaid? But these details could be ironed out.

      • Not a serious problem, Acbar? OK then … just when does it become one? No one believes that grid-defection is the best idea for the future. Not RMI, and not people like me who have argued for years to put rules in place that will allow a large portion of distributed generation to be built sooner rather than later.

        Here is the question? Exactly how much gas will Virginia need for electricity generation if 50% of grid demand is gone by 2030? That is a number put out there by CitiGroup. They calculate 20-40% of total electricity demand will be supplied by on-site generation.

        Tesla, whose storage-wall factory is opening this summer, is looking to serve 30% of grid demand with solarPV and storage behind the meter. Doesn’t it seem conservative and thrifty to not put $10billion+ into fossil infrastructure that will not be needed unless Virginia refuses to change the old rate regulation rules?

        Acbar … “Some people see utility hostility to d.g. and would also try to incentivize the utility to support d.g. more strongly. But, unlike CA&W, I don’t think we have a serious problem there, at least in the long run. “

        I have seen the hostility you speak of in the stubborn unwillingness to change the system, and to put a large portion of investment into continuing the old system. More big gas plants, with even more on the drawing boards for the 2020’s. A possible 3rd reactor at Lake Anna, and the unwillingness to build 2 offshore wind mills on a coastline that can provide 60% of VA’s electricity and offers the opportunity to develop a new industry in our ocean connected communities thst are on the front line of rising oceans and climate change.

        Five years ago I set up a teleconference with NOVEC to discuss the possibility of finding a place for ‘solar gardens’. Turned out that Virginia’s rules wouldn’t allow off-site ownership, the kind that would give a shady homeowner the chance to buy solar panels on a group owned installation.

        I also spent time on VA’s Eastern Shore and know the company that developed the large solar farm there. It took years to work out all the pieces of that installation under VA’s restrictions and then, lo and behold, once it was developed Dominion bought it.

        A large and growing number of companies are now looking to be good climate citizens, which means many are looking for, not gas, but the ability to use Power Purchase Agreements. They would like to see a 3rd party builds a solar system on their roof, or in their parking lot, and buy the discounted electricity without the issues of ownership. Can’t do that in VA. That law is on hold in the legislature.

        Finally, Acbar, there are lots of ways to help low income customers without direct subsidies. One is ‘on-bill’ financing. The utility loans the money for a home evaluation and redo, then ties the loan to the meter, not the customer, who of course must be paying their bills on time etc. The loan is paid back with the monthly bill, which is actually the same or less than it was before the loan was added. Utilities around the country are doing this. It means reduced demand but still brings value to the utility.

        The so called ‘grid parity’ that carries the danger of grid defection will come sooner if we put a price of carbon and shift those environmental costs off the public and onto the products that cause bad air and toxic water. That too should be a ‘conservative’ idea. … a ‘user fee’ if you will.

        You agree that we need to begin planning for a transformed grid. As RMI says… the “shift need not be an either/or between central and distributed generation. Both forms of generation, connected by an evolving grid, have a role to play.” That makes lots of sense.

        From where I am sitting, Virginia has not gotten past the idea of the “utility death spiral,” to a place of understandings that they will not control all aspects of our electricity system in the system that is the future. Nor has Virginia accepted the fact that climate change will cause more damage the longer we wait to act.

        • CA&W: You write too persuasively and carefully for me to ignore the few things on which we disagree. Let me be careful in what I say here: I don’t believe the typical electric utility is HOSTILE to distributed generation PER SE. But then you add, “I have seen the hostility you speak of in the stubborn unwillingness to change the system, and to put a large portion of investment into continuing the old system.” I agree that many utility executives exemplify that statement, and all too many utilities adopt policies that reflect it. Let me explain.

          First of all, utilities are inherently large, heavily-regulated, rules-conscious, financially risk-averse organizations. My sense from years of working with these folks is that most of them take their “public service” obligation surprisingly seriously and strive to do a good job “in the public interest” overall, and really rise to the challenge in an emergency; but their success is usually measured in terms of keeping costs down and the price of electricity low — not in innovative policies, or personal risk-taking. Stodgy? Yes. “Stubborn unwillingness to change”? Sometimes. The best utility executives know the value of shaking things up, questioning assumptions, pursuing alternative scenarios to see where they lead — the stodgiest folks, in my opinion, are not these industry leaders but the folks on Wall Street, for whom any departure from past financial practice is a red flag, but that’s an aside.

          Second, there are certain things that regulated retail utilities almost always perceive as threats, and certain things they will readily accept. Here are two that are perceived as threats: any encroachment by a third party upon the “exclusive service territory” assigned to the utility by the State, either as to the (1) distribution or (2) retail sale of electricity. Electric utilities are EXTREMELY sensitive to encroachments upon these because the franchise is, traditionally, the most valuable asset the utility has: indeed they have given up their financial independence, their freedom from comprehensive regulation of their retail rates and services, in exchange for that State-granted monopoly over the “exclusive right to serve.” And here are three that are not perceived as threats: anything the customer does on his own property to (1) use, (2) conserve, or (3) generate, electricity on the customer’s own premises. Electric utilities do not understand the communications companies’ problem with net neutrality because they believe in the ultimate neutrality: all electrons are equal; what the customer does with them is not the supplier’s problem.

          Third, and fairly recently, the courts have decided once and for all that all sales by those generating electricity, including by homeowners, are wholesale sales into the grid, and cannot be prevented or regulated by the States. Some utilities did not oppose this but most did (see, “exclusive retail sales territory” above). But now, there is no question any longer in the U.S. that anyone, including the homeowner with a little extra solar generation on his roof, can sell to the grid operator (around the mid-Atlantic, that’s PJM) at the going rate for sales into the wholesale marketplace.

          So what did you folks do? Try to develop “solar gardens” (a direct challenge to the utility’s exclusive right to distribute electricity from an off-site location), and then try to use Power Purchase Agreements whereby the solar equipment vendor retains ownership of the equipment AND the electricity it produces on the homeowner’s roof and sells him the electricity at retail (a direct challenge to the utility’s exclusive right to sell electricity at retail — since Virginia backed away from its experiment with “retail access”). Am I surprised that you ran into a buzzsaw on this?!

          As we have discussed on this blog before, there is no need to have these confrontations. The fight over power purchase agreements with solar equipment vendors is, frankly, easy to avoid: don’t structure the solar electricity as a sale to the homeowner but as a delivery of his entitlement to the output from his own leased equipment. Too bad if that’s less profitable to the equipment vendor. The fight over distribution from solar gardens or from excess solar generation can easily be resolved by selling all of it at wholesale to PJM; DVP must deliver it. Too bad if the wholesale price is not as profitable to the coop garden or homeowner-seller as some sort of net-metering deal that the utility will fight tooth-and-nail because it’s at ratepayer expense and grossly over-compensatory. Now if THAT’s what you mean by “not supportive of d.g.” then so be it; as I said earlier, I don’t think these two examples of opposition to d.g. indicate utility hostility to d.g. PER SE but simply to your choice of means. But there are lots of things we agree on. I suspect you do really care for the consumer’s best interests — such as, we need all the support of weatherization and other end-user efficiencies we can get, especially from utilities who can target the right recipients. As I said, RMI is good at preaching energy efficiency as something utilities and their State regulators can and ought to support.

          As for that “utility death spiral,” that’s another subject for another day. If you really believe that, speak up when the time comes for comments on DVP’s IRP. That’s where that question will have to be decided.

  4. Jim,

    Thank you for bringing these issues to everyone’s attention. They need more discussion.

    The Times article notes:
    “Spain, Great Britain and Germany all are scaling back their regulatory support for solar energy. Meanwhile, in the U.S., utilities and regulators in California, Hawaii, Nevada and Arizona have backed off their generous backing of solar, and the Times says other states may follow their example.”

    Many readers might interpret this as a decline in enthusiasm for solar in these areas. I think what is more accurate is that many have removed or reduced substantial incentives that were used to encourage adoption of solar because of its many benefits. As the market was robustly established these “market creating” incentives were no longer necessary and were reduced or allowed to lapse.

    In Hawaii, Nevada, and Arizona, the local utilities pushed back strongly against net metering because in these high-sunshine states they were suffering from a major loss of revenue from residential solar. It was faster and easier to slow down solar rather than speed up a rate revision that recasts the role of the utility and keeps them financially healthy as a distribution platform provider. This is also happening in other states that want to prolong the past rather than embrace the future.

    This is not an easy task and requires a fundamental re-imagining of our energy system. But you have it exactly right when you said:

    “But one could likewise argue that we need to start thinking about a regulatory framework that accommodates more wind and solar, or others will figure it out long before we do, leaving Virginia at a competitive disadvantage. I don’t see that discussion occurring right now. We need to begin.”

  5. It’s hard to know how things will play out – there are so many dynamics in play.

    for instance, smart meters have their own dynamic separate and apart from solar – just a way to better allocate actual costs to actual uses and “education” is going to have to deal with a lot of people who will deeply resent that kind of pricing. Where smart meters have been implemented – there has been widespread outrage … the sentiment along the lines of allowing the utility to rip people off by charging way more for what used to be one simple price.

    but I think the real-world laboratories for what might actually happen – will be played out on islands that have no native fossil fuels and have to import it – to the tune of about fifty cents per kilowatt hour . I would think – until shown the error of my ways (again) that – fifty cents a kilowatt hour is a lot of incentive for solar, smart meters, demand management, etc.

    I note in listening to the Dem Convention that went Hawaii’s turn came out – they made some claim as to being the first state to go to 100% renewable power…

    was that a boast or real or an intended goal or what?

    • It is a goal. In the next 20-30 years. Although, Kauai getting fairly close with the addition of the big new Tesla utility scale batteries. Their rates are 25-30 cents per kWh. Lots of sunshine. No heating load and a moderate A/C load on Kauai compared to Oahu.

  6. rates do vary – but typical seems to be in the mid 30’s:

    https://www.hawaiianelectric.com/my-account/rates-and-regulations/average-electric-rates

    but same thought – that kind of cost would seem to be a huge incentive to do what is said would happen in the other states like Va which has no where near that price differential.

    The narrative also points out that they have no “PJM” to buttress reliability – it’s all on their own.

    • You are right. Rates have gone up quite a bit since I lived there. The residential rates for Kauai Island Utility Cooperative are now about 34.7 cents per kWh plus a $10+ monthly customer charge.

      Not only don’t they have a PJM. Every County (each island) is on their own. There is no ability to interchange between islands. So each one is reliant on imported fuel. Solar is truly the answer for their future.

  7. Re:. “I think the real-world laboratories for what might actually happen – will be played out on islands that have no native fossil fuels and have to import it.”. Agreed, those high-cost locations don’t have cheap fuels or grid diversity to fall back on. And Hawaii also doesn’t have a nighttime heating load so solar can more easily carry daytime load that disappears at night. But Hawaii still illustrates the point that even in such extreme circumstances there is a need for the grid and the isolated d.g. or “microgrid” fantasy is no substitute.

  8. …………. AND… you’d think in Hawaii that residential rooftop solar would have a much higher adoption rate – as well as a much higher use of energy efficient technology –

    12 volt fridges and freezers are available – for quite a bit more – (more than twice as much) but they mesh with solar and batteries for overnight -quite well. If a house has these and uses LED lights and convection stove tops and microwaves… they could probably make significant inroads in their monthly costs.

    you’d think – you’d see all of this kind of stuff – actually going on – in those islands that have to import fossil fuels for electricity.

  9. After reading and considering the comments, I want to rephrase mine. What I think will happen with local electric systems (say, for example, a Google data center, Cap One’s Tysons campus or a new, high-priced subdivision), is not that those users will necessarily unhook from the grid, but rather, they will stop purchasing power from the utility except in case of emergency. And regulators will not likely set “standby” fees at levels that recover all costs, including a reasonable allocation of fixed costs.

    Similarly, new buildings and upper-end homes and condos will be more likely be retrofitted, while older and smaller buildings and most homes will not be retrofitted.

    So I see more of the utility’s costs, especially fixed costs, being loaded on to rates paid by rural, lower-income, middle class, smaller business, etc. Absent a huge breakthrough in technology, I don’t see a death spiral for utilities, but rather, new technology benefiting only a relative few.

    I don’t think this means the government should stop changes in technology and markets, but only, to not ignore the likely impact on most customers. No state PUC should ever say “Gee, we didn’t anticipate this happening.”

    • Right on target. The ones affected the most will be those with the least flexibility and resources to adapt. Utilities and PUCs must, for their own survival, pay more attention to helping those customers save on their electric bills.

      There will be SOME times of day when, thanks to efficiencies of scale, the grid price will be substantially lower than the cost of self-generated electricity plus batteries to time-shift. In those times of day the grid will have a broader if shallow market. Utilities that want to avoid death-spiral finances need to be careful to invest in highly efficient generation that will run and sell in such circumstances. [Gee, sounds like Dominion?] And of course, during emergencies the market for older, high-cost grid generation will remain — with all those fixed costs spread over fewer and fewer hours of operation.

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