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The power of negative thinking, aka net-metering

The views expressed are those of the author and are not necessarily those of Scientific American.


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Editor’s Note: Scientific American‘s George Musser will be chronicling his experiences installing solar panels in Solar at Home (formerly 60-Second Solar). Read his introduction here and see all posts here.

Our solar project has sunk back into its bureaucratic mire: We’re still waiting on the state to come out and inspect the  array, so that the utility can install a new electronic meter and we can start to receive credit for any surplus electricity we generate and contribute to the grid — a procedure known as net-metering. Paul Cronshaw of Santa Barbara, Calif., sent me a copy of his latest electric bill to show me what it looks like: his July, August, and September bills were negative and his October one was pocket change.

Net-metering greatly simplifies a solar project by eliminating the need for batteries to capture the surplus energy you produce by day for use by night. The electric grid does that job for you. The grid benefits, too, because solar arrays contribute power during peak-demand hours.

One common misconception about net-metering is that you can sell the utility as much power as you want. Sorry. The best you can do is to zero out your total consumption over the course of a year, which at least lets you squirrel away the power generated on long summer days for the dark winter. Any net annual production is a gift to the utility. So there’s no point in building too large an array. Most state subsidies won’t pay for an oversized system anyway.

The Network for New Energy Choices just published a report describing how many states still do not offer net-metering or make it onerously complicated for consumers. Texas is the most egregious holdout: a big, sunny, hot state like that should be a leader in solar power, but is held back by a lack of net-metering in most of the state. Even leaders such as New Jersey and Colorado have kinks to work out. (An earlier report by the same outfit recounted in gruesome detail the red tape that I and many other homeowners have had to endure.)

Cronshaw sent me his electric bill in response to my call for stories about solar installations. He reported that his 2.4-kilowatt system cost $21,540, of which $5,068 was covered by state subsidies and $4,942 by the Federal tax credit, for a net cost of $11,530. He, too, complained about how long the whole process took:

My solar installer did a great job mounting the system on my roof and handling the paperwork with building department and utility company. He has been installing PV systems since 1976.

The only problem that I encountered was having to wait nine months from start to finish.

The solar installation process needs to be sped up. It should be turn key operation, around two to three weeks. Also, we need to have a Feed-In-Tariff (FIT) program implemented nationwide. Other countries are way ahead of us on FITs.

Bottom line: I love solar! I think has potential to help a lot of people, our economy and our environment.

Many solar experts agree with Cronshaw about feed-in tariffs, an arrangement that decouples your production and consumption. You’d have separate electric meters for outgoing and incoming power, and you’d sell your power to the utility at a higher rate than you buy it for. In Gainesville, Fla., for example, the utility pays 32 cents per kW-hr for solar production, over three times the retail price of electricity. In Europe, the rate can be as high as $1 per kW-hr. Unlike net-metering, feed-in tariffs impose no limit to how much power you can sell.

In return, homeowners give up other subsidies such as tradable certificates (whose fluctuating value adds a huge element of risk to solar) and up-front cash rebates (which, because they scale up with the system size, can encourage installers to pack in as many panels as they can fit even if it compromises performance).

Frankly, though, I wonder whether this is any improvement. I prefer to have the cash up front rather than have to float the cost myself. Some solar experts, including the Network for New Energy Choice, argue that existing subsidies are already generous enough to make residential systems worthwhile. Utilities, for their part, complain about the added complexity of feed-in tariffs for homeowners. Where these tariffs shine is for larger installations.

I’d love to hear where other people stand on feed-in tariffs.

Update (December 8th, 2009): Steve Leppold of Eugene, Oregon, wrote to say that many utilities, including his, do pay for excess annual production. In Oregon, utilities pay for the excess at the retail electricity rate. Here in N.J., they pay at the lower wholesale rate. So net-metering provides at least this one benefit of feed-in tariffs.

Paul Cronshaw’s electric bill, courtesy of Paul Cronshaw

 





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Comments 14 Comments

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  1. 1. MisterA 5:19 am 12/2/2009

    This more than anything can make a real difference to energy generation but of course unless someone can make a killing they won’t be interested. It’s shameful if a country like the USA which has so many sun-baked parts can’t transfer all that power to the colder parts. Maybe the sunny states can barter it for water…

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  2. 2. candide 10:53 am 12/2/2009

    "Any net annual production is a gift to the utility. So there’s no point in building too large an array"

    Why not? Do something for your fellow humans.
    That type of selfish, short term thinking prevents reaching various full potentials.

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  3. 3. KristenM 11:00 am 12/2/2009

    As you correctly point out, there is now a disincentive to place all of the solar panels that you can on your roof. Homeowners now try to size their solar arrays up to about 80% of their needs or otherwise they end up making a grand gift to their local utility. A rational feed in tariff allowing you to sell the excess back to the utility at reasonable and not inflated rates would be a good move. Kristen @ solartown

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  4. 4. Michael Hanlon 10:59 pm 12/2/2009

    The bill:::::::::::::::::::::
    I read the Horizontal as being for 14 months and the vertical as being (based on the noted average consumptions) as incremented at 5KW steps. Mr. Cronshaw has been averaging nearly 10KW/day. That is not a residential consumption level. There must be some power consumptive activity to account for the high level (Or, he should have learned to conserve energy)
    No where are we told when he turned his system on. Has it been on during the entire 14 months? Or, did it just come on line in July? Yes that must be it because there is no way his level of consumption could have varied from last year’s season to this years season.
    Good gawd, this must be imaginary. The bill shows that ave. consumption last Sept & Oct went from & KW/day down to (-)2 KW/day, a reduction or generation of 9 KW per day. How does a 2.4 KW system do this? If the answer lies in the fact of the 2.4 being a per hour value then at 8 generating hours per day there should be shown a 19 KW/day drop not 9!!!!

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  5. 5. ckmapawatt 12:27 pm 12/4/2009

    candide,
    "Why not? Do something for your fellow humans.
    That type of selfish, short term thinking prevents reaching various full potentials."

    Are you serious? Let me ask you, how big of an array have you installed?

    I get comments like this on my blog all the time. People fail to realize the world operates on $$$. Yes, I would love to quit my job and just volunteer for the rest of my life or build the biggest solar array in the worl, but who is going to feed me, look out for my healthcare, buy me plane tickets to visit family?

    Believe it or not, altruism still adheres to basic economic theory.

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  6. 6. Michael Hanlon 5:12 pm 12/4/2009

    May I add to my above observation about the amount of reduction that Mr Cronshaw’s bill shows? There is another aspect to being a generator of energy which may be in play here. The contribution by the panels may indeed be 19 KW/day but the fact of being a generator has slipped Mr. Cronshaw into increasing his base comsumption from what used to be 7 KW/day to 17 KW/day! Well, sir, is this the case? Have you thrown conservation efforts out the window now that yopu are a producer?

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  7. 7. Paul Cronshaw 6:45 pm 12/5/2009

    Michael,

    I turned on my solar system June 27, 2009. I have been logging data off the inverter’s display on a periodic basis. The highest daily reading was 17.8 KWh.

    Going solar has been the greatest thing for my family of 5. We are now more conscious of our electrical usage and practice conservation to reduce energy usage and maximize the net-metering amount. I am also using a Kill-O-Watt meter to further evaluate energy usage of all plug in devices. It has been a great education for my family and a continuing journey to "Reduce, Reuse, and Recycle".

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  8. 8. Michael Hanlon 3:55 pm 12/6/2009

    That is wonderful, sir. I tip my hat to you. I hope you understand the opinions I voiced, that they needed to be included as possibilities in this dicussion and that some do not share your ecological concerns but only act out of greed.
    That said, with a family of five there is a sort of production line in operation I’d imagine. A friend with a wife and two daughters calculated that he (spent) 700 Whr 6 times a day while preening operations at a make-up mirror took place.

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  9. 9. Michael Hanlon 2:39 pm 12/9/2009

    Mr. C, So your October bill shows that your net usage of electric power was zero. That means that you averagely consumed all 17 KW/day that you generated. If going from ave. 10 KW/day to 17 KW/day is conservation then I’ll eat my windmill.

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  10. 10. Paul Cronshaw 12:28 am 12/20/2009

    Michael: I want to make sure I don’t give you the idea that I have ended my conservation efforts by the addition of solar panels on my roof.

    I logged into my utility account and downloaded a pre-panel history of usage: 12 month average = 15 KW/day.

    Since flipping the solar switch in July, I have calculated from the meter that to date I have generated more electrons than used = -178 KWH.

    Since I am now an electron generator, the game in our house is to try and keep this number as a negative and win the net-metering contest. Unfortunately with some rainy days, approaching winter solstice, and my new LED Xmas lights, I am hoping that this negative number does not become positive. :(

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  11. 11. Michael Hanlon 10:14 pm 12/21/2009

    Paul, if I may return the familiar?
    Based on the information you just provided, I don’t see how the Power Company (POCO) could have sent you a bill showing that last January you max’ed out you ave. daily usage at 10 KW/day. Does that mean you owe them 17/10′s more than what you’ve paid them already? Have they installed a faulty meter at your residence? The numbers still don’t come out right. I want to give anyone who has taken the step to self production the benefit of the doubt.
    I await some further explanation of the numbers, Please?
    And, I wish you and yours a happy holiday season. Jingles sell, jingles sell, jingle all the ads. Oh what fun it is to sing a jingle in the line OOh..dashing thru the store..

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  12. 12. Paul Cronshaw 2:12 am 12/22/2009

    Michael,

    Check back to the graph that George posted at the beginning of his net-metering article.

    The vertical axis has 4 numbers: -9, 0, 9 and 19. I think I see where you might be stuck on 10 kWh as my avge. electricity usage per day.; the 19 can easily be mistaken for a 10.

    FWIW In December 08 my total usage pre panel was 18.71 kWh. This was a max. figure.

    I am going to be very interested in how this whole data ends up in my first year as a solar generator: will I be a generator with a credit or a consumer.?

    At the end of my first net-metering year, if I produce more electrons than I consume do I get to roll them over or does the POCO take my credit? Stay tuned; the solar journey continues.

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  13. 13. Michael Hanlon 7:36 pm 12/22/2009

    I do have vision problems (my face has to be five inches from the screen to read it and then maybe I see too much getting so close) I accept I mis-read the scale on the left y-axis. I asked many posts ago if what I read the numbers as being was correct.
    How is the numbers in big bold lettering that I can read from a foot back from the screen, the ones that compare two years ago against the last year say 2008 = 12.45 and 2009 = 13.42?
    Please understand that I question figures as a holdover from my Quality Engineering days. The first thing a good Q.E. does is learn that no one intentionally tries to make mistakes. If something doesn’t meet specs, look to the process or the materials. Make sure the spec is correct, are there directions to follow and are they up to the task? Are the measurements repeatable? Here is where I think I’m sensing error. Is there a difference, now that you are watching your consumption and what the meter reads? Those 12 & 13 ave KW/day figures are based on the meter, correct?
    Happy new year, Paul.

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  14. 14. Solarchris 3:58 pm 02/7/2010

    I just found your articles. We were going through the Solar energy process at the same time you were. PSEG just installed the net meter and I am waiting to see what my first bill will look like. I am curious if you were tempted to go with PSEG’s loan program (or maybe you are not in their service territory). It really works well to take the sting out of the big cash layout and helps avoid the risks of working with SRECs. They are lending us about half the cost of the project in exchange for getting our SREC’s for 10 years at a discount. In theory it helped us to reduce our out of pocket to a small amount so eliminated our hesitiation with all the other unknowns.

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