Suppose a small farmer went to Safeway and said, "Hey, I have 100 pounds of carrots every couple months. I want your cashiers to buy them from me at the retail price!"
First, Safeway buys in very large lots from certified suppliers, who can commit to (almost) always having carrots.
Second, those suppliers have to deliver at a loading dock, and maybe at a central location, too.
Third, Safeway pays them wholesale prices, not retail.
All of those analogies apply to selling power back to PG&E at retail prices. It's in small lots; it's undependable; it comes from many sources, not just a few; and it's priced wrongly.
Yes, PG&E can be read as Pricks Grabbing Everything, but they're what we've got.
> "I want your cashiers to buy them from me at the retail price!"
It's not anywhere near that simple. Electric power prices change dramatically throughout the day. For example, even retail prices may more than double during peak hours, if you have time-of-day billing.
In some markets, peak demand is caused by day-time air conditioning during a few weeks in July or August. The extra generation capacity needed to cover that tiny window of time is idle the rest of the year. Those peak hours are very expensive, in real terms.
In a market with small amounts of solar, that solar is helping offset some of the most expensive electricity of the year. And I've seen power companies push their major clients to install solar so that the power companies can avoid large investments in new power generation and transmission capacity.
With net metering, power companies pay retail when wholesale electricity is most expensive. And they credit it back during the night, when wholesale power is cheaper. (The early evening window is trickier, and the hours of sunlight depend on latitude.)
But once solar capacity is sufficient to offset air conditioning, the numbers for the power company get a lot worse.
(Full disclosure: I signed a 10-year net metering contract which would barely break even in 12-15 years, in a market with little existing solar. The power company instituted separate grid fees a couple of years later, which substantially changed how the contract worked. And so my system will probably never pay for itself. Win some, lose some.)
As far as I know, the power company made the changes to their fees with the full approval of state regulators.
They still provide net metering for the electricity that I buy, as per the contract. They just broke out a ~$35 monthly fee for grid maintenance, separate from what I pay for electricity.
And most municipalities will refuse to allow on-site grid independent generation, AND refuse to issue a certificate of habitability unless you have reliable power.
Practically, 99% of urban or suburban residences lack the space and other infrastructure to have a safe and effective off grid system up to the relevant codes anyway, especially when the relevant fire codes come into play.
With how weird a setup it is, most municipalities would just refuse to figure it out with you, so good luck getting through that mountain of red tape.
To extend the metaphor a little, the farmer would be bringing in carrots in a ready-to-sell condition and putting them directly in the Safeway stores on the retail shelves.
That's a little different than forcing Safeway to pick them up at the wholesale distribution warehouse (at full retail price) and truck them around themselves and stack the stores themselves.
In the PG&E case, the residential rooftop solar power is delivered directly into the retail last-mile networks just like the carrots on the Safeway shelves metaphor.
However, the NEM2.0 model is still needed a tuneup. Last-mile networks still need maintenance. Suppose each neighborhood reached self sufficiency, somebody has to pay for the grid maintenance and run the whole thing.
IMHO, buyback at a discount makes sense, but NEM3.0 seems like a Christmas gift to PG&E. They get ToU, capacity fees, wholesale rates, and minimum usage fees. They asked for the sky and got it all.
Actually the way the grid works, in this analogy the farmer would deliver the carrots directly to the absolutely geographically ideal consumer's refrigerator.
The only kinda grey lining here is the incentivization of house scale battery storage thru gutting all other routes to solar profitability... Sort of like saying that police speeding ticket quotas 'encourage' alternative transit like bicycles and trains just by adding misery to driving.
Maybe all of your neighbors with gardens have tons of carrots in September, so many that they leave bags of them on your doorstep to rot all late summer long. So when it's February and you've got nothing to eat, how do you get carrots?
How? The same as you would if the farmer providing retail-ready carrots didn't exist.
In California's case the grid generation capacity was made up of nuclear (fixed base load), natural gas for dynamic load, and solar/other renewables (wind, hydro etc), and import/export.
If you look at the grid operator stats on https://www.caiso.com/TodaysOutlook/Pages/supply.html#sectio... - I find it interesting to compare days like May 10th (where solar + base load lead to exporting) vs something like Sept 1st (where solar + gas + imports was barely enough) vs today (Dec 16th, where sun is limited and we rely on natural gas + imports to fill the gap).
PG&E probably loses money on days like May 1st where a large portion of their power is acquired at retail, but makes a killing on the other two example days by selling wholesale generated/imported power at our jacked up rates.
IMHO They want to make a killing on the plentiful springtime solar surplus too. Now that they've got everything they asked for don't expect that this will reduce rates for non-solar customers - it'll go to investors.
I still think a tune-up of NEM2.0 would have been better. Other places seem to get by just fine with an 80%-90% buy-back rate vs NEM2.0's 100%.
Really? Your response to, effectively, "this company which has a natural monopoly in this region is arranging things so as to increase their profits at the public's expense" is "ah, so you're saying you want to get in on that action, eh? wink wink, nudge nudge?"
I think it's much more important to see that situations like this are treated justly and fairly than to make sure I'm getting my cut of the corruption.
I don't know if this is a general question or specifically about carrots, but:
Carrots keep under refrigeration exceptionally well. They transport well. They're not like peaches, which are either in-season and fantastic, or out-of-season and thus flown in from somewhere else, really expensive, and lousy.
But the goal here in setting these prices (from Society’s perspective) is not to maximize Safeway’s profits, but rather to incentive more people taking up carrot farming!
Since we’re fairly confident we need lots of carrots to save the world!
People are so quick to speak for "Society" because, in their minds, they think it trumps all other arguments.
But very few -- if any -- actually know what society needs.
I would say that what Society needs is to ensure a regular supply of carrots at stable prices. It's not to maximize small household carrot farming if it does not align with this goal.
There is no particular reason why solar needs to be on individual rooftops where there is no storage, no ability to make long term commitments, and no mechanism to turn it into a reliable, dependable stream of energy.
But sure, if the same households commit to maintaining their solar panels at an agreed upon capacity, and commit to purchasing enough storage to provide the agreed upon electricity despite the weather, and are able to sign long term contracts with significant financial penalties for failing to deliver the promised quantity of electricity, then yes they can be an electricity supplier to those utilities that need reliable energy suppliers in order to meet their own contractual commitments to energy users.
There's no need for all that red tape. Since there are so many households, the average will be highly predictable, given the weather conditions. Same as with large suppliers.
Battery capacity is something many households may also want to invest in, if the incentives are attractive enough. Again, no need for long term contractual commitments.
> " Since there are so many households, the average will be highly predictable, "
Unfortunately when it's dark in one place, it's also dark elsewhere. When it's cloudy or rainy in one place it's not made up for with extra sun elsewhere. There are also differences across seasons, with less sunlight in the winter, etc. You can average and say a state has, on average, x hours of sunlight in June, but without extremely expensive storage, the sunny days don't end up powering the grid on cloudy days, and solar in the summer doesn't get stored for use in the winter.
Electricity needs to be stable and reliable year round, and every day.
But that's an argument against solar rather than against the notion of retail compensation rather than wholesale for boutique-scale production of solar (which is what the main topic on this subthread seemed to be).
No, it's an argument against solar without storage. Include the storage, include reliability, and you can have solar.
But no one wants to do that because storage is expensive, so they wave their hands and talk about "randomness evening out" or they explain "storage is a solved problem!" and then they draw something on a napkin for you.
Bottom line everyone wants to externalize the cost of storage because it's a difficult and expensive proposition. And so the household with the rooftop solar connected directly to the grid is effectively using the grid as storage, because buying the batteries is -- surprise -- too expensive.
But the electric utilities are saying -- "unreliable power is not very valuable to us, because we need reliable power" -- that is solar plus storage. If you just give us unreliable power, we'll only pay a penny for that, but we'll pay 20 cents for reliable power. And people are getting very angry at this because they think the unreliable and reliable power should have the same price, or that unreliable power is somehow a replacement for reliable power.
Given the amount that I've had to bail them out as a California taxpayer and as a ratepayer, it's absolutely criminal that they're not currently a government-owned company.
I pay about a third of the rate and I am in an area that is so close to PGE that I could throw a rock and hit them. It’s terrible pricing, even for the area.
Putin started tampering with the gas already during the summer of 2021. The effects of this were likely part of the calculus on the West's response to the war, which he severely misinterpreted given that we have decided to accept the current chaotic market conditions rather than give up Ukraine.
Putin is only mentioned once in that article and only in a context of people criticizing the dependency on Russian natural gas. There's nothing there that implies "tampering", and the article speculatively couches the moves in economic terms, prioritizing new delivery means. I suppose you just think Putin is behind everything.
I don’t think that was my hope. My comment, if anything, is that the dynamics of pg&e’s retail pricing make the comparison a bit of (pardon the pun) apples to carrots. Plus, there’s no analogy for energy, at scale, to refrigerated supply chains; hence need for TOU pricing to shape demand.
Most produce is seasonal. So your prices go up during the off season, and/or quality declines as they’re imported from farther away or picked before ripe.
Yep, but it depends on what’s rate plan you select.
> SEASONAL PRICING The cost of electricity on your rate plan is lower during the cooler months from October to May, and is higher during the warmer months from June to September. For full seasonal pricing details, visit pge.com/tariffs. [0]
And here’s a an infographic [1] showing the differences between two plans for season, time of day, and baseline allowance (tiered usage).
> All of those analogies apply to selling power back to PG&E at retail prices. It's in small lots; it's undependable; it comes from many sources, not just a few; and it's priced wrongly.
You must not be an electrical engineer.
Do you think the power I generate from my solar array travels a hundred miles to some facility to then be sent back to the house next door?
Not so.
Multiple homes are connected to, and fed by, power distribution transformers. In other words, five to ten homes share the same output. Which means that excess power from one or more of those homes is fed directly to any home that needs it.
My power goes directly into my neighbor's meter. The power company charges my neighbor the full rate for my power. They pay me almost nothing. Pure fucking profit.
Of course, it would not be sensible to ask for the full rate. However, they should pay a good percentage of what they are charging for the power. Among other things, if anything breaks it is my responsibility to fix it. And, of course, I paid for the entire system. They sell my electricity at full rate with minimal costs.
Maybe a silly question, but from those of us that aren't electrical engineers.
Am I correct in assuming that excess generated power can't leave my local distribution network? So there are X houses in my circuit served by a dist transformer, and if we can produce more than those X houses need at that point in time, then the excess simply doesn't get "pulled" from the panels?
Theory: Transformers are bidirectional. You can drive them from either side.
For example, in testing one of the devices we manufacture we need 480 Volts AC. At each test rig we use a 480 V to 220 V transformer, drive it backwards and generate 480 VAC from 220 VAC.
Distribution transformers have primaries in the tens of thousands of volts (say, 50 kV) and 220 VAC (for residential service) outputs. The topology could be different, however each home receives a two leg service with 120 VAC per leg.
So, yes, you should be able to drive the low voltage side and end-up with high voltage on the other side.
Let's say you have ten homes on the same transformer. Each home has solar. During a holiday, all homes are empty and nearly all of the power they generate drives the transformer backwards. The power would then drive other transformers and feed homes that need it.
What I don't know is if they explicitly have devices to prevent backwards flow of power. I don't think they do. Not sure this would make any sense. I could see protection devices to prevent overload.
You must not know much about actual PG&E equipment.
A neighbor here told me there was a 6-month wait to get solar & its associated metering, because PG&E doesn't have the equipment on our lines that can accept power back from the customers.
Suppose there was a small committee of Californians who mandated that Safeway pay retail price minus a regulated margin to the farmers, then wait until a large number of people started to make decisions around that policy, then did a sudden rug pull. But grandfathered in some people to the old scheme and left others to go figure themselves out, because fairness is a strange thing in the world of the bureaucrat.
From the far sidelines this appears to be a stop in a long journey where the State of California tries to simulate market-efficient price of different forms of power generation solar the slow and hard way that doesn't involve using a market. All these schemes look even more foolish than usual now that solar is allegedly the cheapest form of power, so presumably a market would just throw things up at speed.
So a minor inconvenience is a good reason to eliminate a method to combat what our media calls "settled science" of a phenomenon that is an existential threat to humanity?
Who said humans always do the right thing? Who said California is going to always do the right thing? Science is never settled by definition but look, the evidence is there - go look - you don't have to rely on 'our media' - implied as corrupt. 100% know that you already have your mind made up.
> It's in small lots; it's undependable; it comes from many sources, not just a few; and it's priced wrongly.
My (very poor) understanding is that much of (all of?) power that gets sold back to the utilities goes through virtual power plant (VPP) programs like Tesla's or Swell's, where although there is a relationship between the owner of each solar installation and the utility, the VPP is the entity that sells the power to the utility.
It’s also important to emphasize that this is still _net metering_
That is, if your solar production for the year equals your energy consumption for the year, you pay $0 in energy costs[1].
You are still offsetting retail electricity rates with your own, cheaper, fixed cost form of electricity. You just get paid the same[2] for your excess production as any solar farm.
1 – It was going to be nonzero with an interconnection fee, but that got dropped
2 – $0.08/kWh is also higher than utility-scale power purchase agreements in CA, which are closer to $0.03/kWh
That’s not what the linked article says. It says any exported energy will be valued at 10% of what it did before. When you send 10Kwh to grid, you get 1Kwh back. That is why, the breakeven period increased from 4 to 14 years on a new solar installation
Except it would be more like if instead of paying in cash, Safeway paid the farmer with vouchers that they could trade in for carrots. And in many cases charges a monthly fee in order for the vouchers to continue to work.
The answer is not to sell back to the grid. The answer is to make the grid irrelevant and get off it. Especially in Cali with all the sunshine they get.
I suspect rooftop solar for most folks isn't producing electricity when they need it, at least not enough to satisfy their peak demand.
That leaves PG&E buying your excess at exactly the time of day they don't need it. And you continue to pull load at peak demand (like everybody else) so you need the grid connection.
It's a lose all around for PG&E. This change recognizes that.
Anthropomorphizing transformers are we. The analogy visualizes how inconvenient for cashiers to buy carrots but transformers don't care - it's easy and free.
First, Safeway buys in very large lots from certified suppliers, who can commit to (almost) always having carrots.
Second, those suppliers have to deliver at a loading dock, and maybe at a central location, too.
Third, Safeway pays them wholesale prices, not retail.
All of those analogies apply to selling power back to PG&E at retail prices. It's in small lots; it's undependable; it comes from many sources, not just a few; and it's priced wrongly.
Yes, PG&E can be read as Pricks Grabbing Everything, but they're what we've got.