Rooftop solar and utilities don’t have to be enemies

rooftop solar panels

Photographer’s caption: The rails that will hold the solar panels in place are up, and we are wrapping up at the end of Day 1 of installing the panels on a low-income house in Oakland, California.

Rooftop solar has become mired in controversy.

Conservative think tanks allied with electric service providers disapprove of it. They vigorously advocate ending “special treatment” for renewable energy.

Environmentalists favor it. Unfortunately, too many of them paint electric utilities (and large corporations in general) as evil.

Probably very few advocates of sustainability identify themselves as conservative, but I do. I want to make a conservative case for renewable energy in general and rooftop solar in particular.

But before countering the arguments of the utilities and utility-friendly think tanks, it is first necessary to understand them.

Rooftop solar installations tied to the grid are part of what is known as distributed energy resources. Distributed will kill electric utilities. That is, under their present business models.

No one, I hope, wants electric utilities to go out of business.

Utilities see rooftop solar as a threat not just to their business model, but their ability to survive. They have circled the wagons. They are using their considerable political muscle. They want state public utility commissions to put the brakes on distributed energy resources. And conservative think tanks seek to help them out.

The threat of rooftop solar panels

electric power plant

A fossil fuel electric plant in Arizona

Electric utility companies exist to sell electricity.

Some operate as state-regulated monopolies.  They are solely responsible for its generation, transmission, and distribution. They take care of part of the grid.

Others, under some level of deregulation, still take care of part of the grid, but they no longer generate electricity.

They buy it from various sources and sell it to customers. They buy from whatever generating businesses offer the lowest possible price  The best price varies from hour to hour.

On the surface, any effort to conserve energy takes income and profit away from electric service providers. Consumer-owned rooftop solar panels and utilities appear to be playing a zero sum game. All the electricity consumers generate themselves reduces demand for the utilities’ product.

Most rooftop solar installations are tied to the grid. Sometimes they produce more electricity than they use. It goes back to the grid. Regulations require that the utilities pay consumers for it. In other words, electric service providers must pay their adversary. They must pay to enable expansion of what seems the most serious threat to their existence.

Solar power is most plentiful at midday, when demand for electricity is at its highest. Utilities make more money from peak power than at other times of the day. Therefore it would appear that distributed energy reduces demand not just for utility-supplied electricity in general, but for the most lucrative electricity in particular.

The case against renewable energy and why it’s wrong

solar panel array

Solar array in Austin, Texas. Utilities don’t object to solar installations they control.

I have already written that the utilities’ argument against renewable energy begs a couple of questions:

First, it complains that renewable energy can’t survive without state subsidies. Can any energy company survive without government subsidies? No.

Traditional electric service providers are heavily subsidized. And fossil fuels receive more subsidies than renewable energy.

Second, it complains that renewable energy is intermittent. But the peak availability of solar power coincides with the time it’s needed most.

Duke Energy is a state-regulated monopoly. Here’s the question in my previous post: Should it be required to buy a certain amount of renewable energy? Its supporters say it should not.

This argument wrongly assumes that renewable energy interferes with the operation of fossil fuel turbines. If so, it would increase utilities’ costs. In fact, the utility must start and stop peaking plants. These plants are inefficient and expensive to operate and maintain.

Once electricity exists, the grid doesn’t care how it was generated. After solar installations have been built, the power is free. It is much cheaper to use free energy at times of peak load than turn a peaking plant on and off.

Other utility arguments against “special treatment” for renewable energy likewise assume answers to unasked questions. They reason in a circle from the assumption to a conclusion that merely restates the assumption.

EnergySagae_ad1Renewable Portfolio Standards laws require electric utilities to generate some minimum percentage of their electricity from various renewable sources.The utilities claim that state mandates raise the consumer cost of electricity.

That claim raises an important question. What is least expensive for utilities and allows them to profit from the lowest rates?

Indeed, until very recently, renewable energy cost more than electricity from fossil fuels. Not any more.  According to last year’s report by Lazard, the levelized cost of renewable energy is $59 per mWh for wind. It’s $79 for solar. The cheapest fossil fuel source is natural gas ($74). Coal costs $109. How can anyone swallow an argument that using less expensive sources of fuel will raise costs?

Coal ash spill site

Work at Dan River coal ash spill site. (February 28, 2014)

Critics complain about the environmental costs of decommissioning spent solar panels. But they beg the question of what poses the least environmental risk.

It is possible to plan for the replacement and disposal of solar panels.

It is not possible to plan for oil leaks and spills, coal ash spills, or explosions in mines. Environmentally harmful events are inherent in generating electricity from fossil fuels.

Some events make national or international news. Others get only local coverage. I’m sure still more never get reported by the media at all.

Accidents in extracting and handling fossil fuels require investigations by federal, state, and local agencies. Government pays for them with our tax money. Conservatives usually advocate for lower taxes. Why advocate for higher taxes when it comes to electric service?

The real problem

Certainly the utilities should operate at a profit, but the problem is not renewable energy. It’s that current business models are obsolete. They’re not worth preserving.

The American electricity grid, build and maintained mostly by regulated monopolies, is an awesome achievement. It has outstanding reliability. The same used to be true of AT&T and Bell Labs, but the Bell System has been broken up. The successor to Bell Labs is a shadow of its former self.

Phone service has improved and grown in amazing ways without the Bell System. Today’s electric grid must also fade into history, replaced by something more suited to the times.

Electric utility companies’ efforts to keep those models raise consumer prices. We pay the high subsidies that keep it propped up. We pay for the environmental degradation resulting from human inability to handle fossil fuels safely. We pay higher taxes to pay to investigate accidents.

Electric service providers need learn to use rooftop solar and other distributed energy resources to their advantage.The public will benefit. Multiple proposals for viable alternative business models exist.

The traditional ways utilities have conducted their business will end. I am appalled that organizations identified as conservative are helping the electric utilities postpone the inevitable.

Opposition to renewable energy and distributed energy resources amounts to an attack on one of the most important conservation efforts of our time. There is no reasonable definition of “conservative” that includes opposition to conservation.

Sources:
Solar Panels Could Destroy U.S. Utilities, According to U. S. Utilities / David Roberts (Grist) 4/10/13
Comparing the Costs of Renewable and Conventional Energy Sources / Mitch Tobin. The Energy Collective. February 12, 2015.

Photo credits:
Installing home solar. Some rights reserved by Lauren Wellicome.
Electric power plant. Source unknown.
Solar array at Austin, Texas. Photo by Larry D. Moore. Public domain from Wikimedia Commons.
Coal ash spill site. Some rights reserved by NC Dept. of Energy and Natural Resources.


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