Tuesday, March 10, 2015

The Impending Solar Energy Bubble and What can be Done to Stop it

The compensation people receive for their excess electricity should not be allowed to cause other people's rates to go up.  If it does the situation will be inequitable and will in essence be a tax on the poor to the benefit of the better off.  In order to insure this doesn’t happen the amount people receive for excess electricity must not exceed the reduction in the total electric system costs that their excess electricity results in. 

The system needed to deliver us power 24 hours a day 365 day a year is composed of a number of different parts. All of those parts have costs that need to be paid in order to keep the lights on.   So logically if solar electricity is lowering the cost of power for other people then it must reduce the need for some of those parts or reduce maintenance costs.  The real question is how much does it really do this.  Solar panels can only really be counted on for the amount of power they produced on a cloudy day on the winter solstice.  Some places have snow so even less than that.   Basically in many parts of the world solar panels don’t reduce the need for other equipment at all (it depends a lot on how close the the equator you are).   

Some people argue that solar reduces wear on equipment other argue it damages and increases wear on equipment because of its sporadic nature, and it requires costly upgrades to the grid.  Who know weather overall it decreases or increases the system costs from wear.  It probably varies by circumstance.  A lot more work needs to be done studying this.  

Basically the way I see it in places like Germany (i.e. places that get almost no energy from solar for part of the year) solar only reduces the need for coal and natural gas so people should only be compensated for the amount of coal and natural gas not burned because of the electricity they produced, but I imagine that few people would take the word of a random person on the internet for this.  That is why there is the need for a competent impartial independent third party to look at all the evidence and reach a decision they feel is in the best interest of all electric customers.

If this isn’t done right there is the potential for a huge bubble.  People doing all kinds of creative things financially in regards to solar and net metering.   If I am correct and people are just shuffling the costs around then things will become strained as more and more people are forced to get solar because of the increasing electric rate.  Obviously this is unsustainable.  Everyone cannot pass the costs off onto someone else and the poor can’t shoulder the entire burden themselves.  Something has to give eventually. 

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