There is a cancer eating away at the grid, and it goes by the name, PV rooftop solar.
The spread of this disease is facilitated by renewable portfolio standards (RPS), where states require utilities to increase their sale of electricity from renewable sources.
Net-metering accelerates the spread of the disease by forcing utilities to pay owners of PV rooftop solar systems more for electricity than it’s worth.
There is a cure, but poorly informed legislatures are avoiding it.
It’s also a very simple cure, analogous to penicillin in the fight against bacterial diseases: It’s called, eliminating subsidies.
Without subsidies, the disease will die out, by cutting off the life blood of new PV rooftop solar installations.
Germany has shown how the disease can cause the death of electric utilities and the grid. While German utilities are still alive, they are in intensive care.
The CEO’s of German utilities have called for measures that would put them on life support, a demand charge added to customer’s bills to cover the cost of maintaing the power generation facilities needed to supply electricity when the sun doesn’t shine or the wind doesn’t blow.
This near death condition has been caused by highly destructive feed-in tariffs, i.e., net-metering on steroids, resulting in the rapid spread of PV solar cancer cells.
Thirty-three states in the United States have enacted RPS laws requiring each utility to sell an increasingly large proportion of electricity from renewable sources. The disease, except in California, is still in its infancy stages, since RPS requirements in most states are still only around 2%.
But, the states’ RPS requirements will increase rapidly by 2025, only ten years from now, when RPS laws will require that 25% to 33% of electricity come from renewables.
Net metering requires utilities to pay homeowners with PV solar systems an inflated price for any excess electricity their rooftop systems produce. Typically the utility must pay homeowners between 11 and 16 cents per kilowatt hour (kwh) for the electricity the utility could generate for 5 cents per kWh.
Utilities must make up this increased cost by raising prices to customers that don’t have PV solar installations. The utility must be able to pay for maintaining transmission and distribution systems, for which most PV solar homeowners get a free ride.
In addition, the utility is deprived of the revenue from these homeowners. While this lost revenue is still a relatively small amount, it will increase as the cancer spreads and more people install subsidized PV solar systems.
This lack of revenue will hollow out the utility system until utilities are unprofitable, and unable to continue generating electricity for those who don’t have PV solar systems.
Saving the grid is important, for several reasons.
People who live in cities are unable, for the most part, to install PV solar systems, and must get electricity from the grid.
Wind farms need the grid to bring electricity to where it can be used: Without the grid, energy from wind is impossible.
Industries need the grid for low-cost electricity. Without the grid they must install far more costly generation equipment.
Even those with PV solar systems need the grid to get electricity when the sun doesn’t shine, at night or on cloudy days.
In short, the grid is indispensable.
As is true with all cancers, catching it at an early stage improves the possibility of killing it.
The PV rooftop solar cancer can be killed by eliminating subsidies for PV solar installations, eliminating RPS that fosters the disease, and net metering that sustains it.
Now is the time to save the grid.
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