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How should net metering affect your electric bill?

climateer.substack.com

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Re: How should net metering affect your electric bill?

#21

Post by dboreham »

SamBam wrote: post #19
cletus wrote: post #16

The author here would do well to and understand and use terms like "fixed costs" and "variable costs". There are large fixed costs in the power grid and the author is complaining that the retail price of electricity doesn't reflect the variable costs, leading to distortions and perverse incentives. But this doesn't make prices "lies". > The current net metering system in California is pretty favorable to customers wi…

> It's quite an overt and deliberate subsidy to foster solar power technology I'd say that the issue the author is addressing is that it is not so overt. Sure, if you meditate on it it becomes clear it's a subsidy, but I think the vast majority of the people who take advantage of it simply think "I produce as much as a use, so of course my bill should be zero."

Can confirm, having talked to family members with recent solar installations.

Re: How should net metering affect your electric bill?

#22

Post by hervature »

cletus wrote: post #16

The author here would do well to and understand and use terms like "fixed costs" and "variable costs". There are large fixed costs in the power grid and the author is complaining that the retail price of electricity doesn't reflect the variable costs, leading to distortions and perverse incentives. But this doesn't make prices "lies". > The current net metering system in California is pretty favorable to customers wi…

Perhaps you and I are reading this differently. In my opinion, the author clearly delineates the two to be able to make this claim:

> In other words, the direct cost of providing an additional unit of electricity or natural gas is only 23% of overall operating expenses.

The way I read it, the author is not claiming the subsidy is the misleading part, just that, once there is mass adoption, the price of everything will actually go up to something very close to the current costs being paid by non-solar panel households. That is, at some point, homeowners who build solar panels right before this subsidy ends will get burnt very badly.

Re: How should net metering affect your electric bill?

#23

Post by lotsofpulp »

hardolaf wrote: post #20
surfmike wrote: post #2

“In practice, it’s often politically difficult to argue for overt subsidies, and we resort to workarounds like net metering.“ The reason we have so many hidden subsidies (also: tax credits) is precisely the sentence above. It’s the difference between policy and politics. Few policies are designed well because the main force driving their creation is political support (or the lack of it).

The delivery fee being artificially low was a political decision to subsidize utility prices for the poor. Every single utility has step function of pricing for usage fees that works to capture the cost of providing the infrastructure. This is why net metering never made sense to utilities and why they were trying to reject it despite states and politicians seeking to force it on them. The utilities who did go all-in…

This is why all subsidies should be in the form of cash. Give poor people cash rather than obfuscate prices, which then results in hampering of market mechanisms and results in inefficient allocation of resources.

Re: How should net metering affect your electric bill?

#24

Post by onlyrealcuzzo »

vehemenz wrote: post #6

If some states weren't captured by utility monopolies, then solar users would be legally allowed to disconnect from the power grid, potentially solving the first issue. It's amazing to me that this is illegal anywhere.

I mean - if you aren't using any power - the base charge is usually less than $10/m.

This doesn't seem like an absurd amount of money to have power when your system inevitably goes down for a time.

Additionally - if you want to sell your house - you're going to lose a fortune taking it off the grid. It wouldn't qualify for most financing.

It's not worth saving $10/m for almost any rational/economic person.

Re: How should net metering affect your electric bill?

#25

Post by kspacewalk2 »

giantg2 wrote: post #8

I only want solar/wind/etc if I can be off grid.

I can understand why it can be necessary, but why is being off-grid desirable? Having solar/wind/etc is great, but a grid connection gives you a bail-out in case things go south, e.g. an outrageously hot and windless summer night might create a demand that cannot be handled by your battery (if any).

Re: How should net metering affect your electric bill?

#26

Post by stevemadere »

dboreham wrote: post #21
SamBam wrote: post #19

Earlier quoted context omitted.

> It's quite an overt and deliberate subsidy to foster solar power technology I'd say that the issue the author is addressing is that it is not so overt. Sure, if you meditate on it it becomes clear it's a subsidy, but I think the vast majority of the people who take advantage of it simply think "I produce as much as a use, so of course my bill should be zero."

Can confirm, having talked to family members with recent solar installations.

The vast majority of people are unwilling/unable to think deeply enough about the system to understand it. Thus, the simplified rule of thumb that generating electricity reduces your power bill is needed for them to even understand the general direction of what needs to be done. Perhaps the power utility could include an explainer page at the back of the monthly statement for those with the interest and capacity to understand it. Maybe 2% of people will read and understand it. The other 98% can just be smug about their lowered power bill and blissfully unaware of their part in accelerating the market shift to solar.

Re: How should net metering affect your electric bill?

#27

Post by api »

This is why your bill should separate your grid fee from your generation fee. Net metering could apply to the generation fee but not the grid fee, and your generation cost should be determined by the time you are using power (due to peaking) not just the amount.

Want to escape the grid fee? Then you have to actually disconnect with full battery backup. That would promote independence and community microgrids, which would be a good thing for robustness and overall system efficiency. Someday I can easily imagine suburban and rural areas with no "big" grid connection and the grid becoming primarily a thing for industrial and high density areas.

Re: How should net metering affect your electric bill?

#28

Post by jdofaz »

burkaman wrote: post #10
sandworm101 wrote: post #7

>> For instance, pricey CDs prevented lots of people from listening to music. Nope. Nobody I knew in the 90s had this issue. In fact, higher prices caused more people to listen to more music. Unable to afford CDs, the kids turned to Napster. After that they had access to more music than any generation in history. This in turn forced the music industry to change, to create online delivery platforms. Napster might be g…

There must have been a lot of people that had access to record stores but not to the internet, and not enough money for lots of CDs. And Napster launched in 1999.

As a 90s kid with no money, the solution was to wait for the song to play on the radio and record it to a cassette tape.

Re: How should net metering affect your electric bill?

#30

Post by snewman »

cletus wrote: post #16

The author here would do well to and understand and use terms like "fixed costs" and "variable costs". There are large fixed costs in the power grid and the author is complaining that the retail price of electricity doesn't reflect the variable costs, leading to distortions and perverse incentives. But this doesn't make prices "lies". > The current net metering system in California is pretty favorable to customers wi…

Author here. Thanks for the feedback!

Agreed that net metering was deliberately designed as a subsidy, and that there was nothing hidden or underhanded about this, it was (and remains) all quite overt.

And yet. The inspiration for this post was a discussion on my town's email list, where a lot of people were talking about net metering as if it were the natural and obvious way of doing things (and thus were very upset at the proposal to weaken it). They either never heard that it was designed as a subsidy, or have forgotten (whether through motivated reasoning or the simple passage of time).

I think this is a form of tech debt. You have an algorithm that's not adapting to new circumstances, the clean solution is too difficult / expensive, so you just hack some of the parameters of the existing algorithm to give good-enough answers in the current circumstances. Eventually everyone forgets the history and assumes those are the "correct" parameters, and resists changing them even if the system has moved out of the circumstance under which the parameters gave an OK result.

> the author is complaining that the retail price of electricity doesn't reflect the variable costs

I think you mean "doesn't reflect the fixed costs"? And yes, it might have been better if I'd taken the time to introduce the terms "fixed cost" and "variable cost".

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