Roof-top Solar Panels - Who Pays? Who Saves?

Many jurisdictions around the world are encouraging the installation of roof-top solar panels by providing a number of financial and regulatory support mechanisms. These include direct grants to reduce the cost of installation, guaranteed prices for solar power sold back into the grid, and "net metering" whereby only the net flow of electricity from the grid to the residence can be charged for by the utility company.

We need to move to a renewable energy base. Most people would agree with that.

But when it comes to roof-top solar panels there are some inequities that need to be considered.

Consider the two residential settings shown in the pictures.

The amount of rooftop solar real estate available to the owners of the single-family houses is more than 10 x that available for the seniors living in the apartment complex. In fact, it would be quite possible for the single-family homes to generate as much electricity as they consume so that the local utility company would actually derive no revenue from these homes because of "net metering".

In the case of the apartment building this is simply not possible.

In the late afternoon and into the night both the single family residences and the apartments will require electricity from the utility grid. But who pays for the generation capacity required to supply this electricity? The only people paying utility bills are the residents of the seniors apartment.

But the situation is actually quite a bit worse than that.

The single-family homes will generate the most electricity between 10:00 am and 2:00 pm. This is not a "peak" period for electricity demand so that much of this electricity will flow back into the grid. The local utility company will have to provide additional equipment to handle the two-way flow of electricity to and from these houses. Other equipment will be required to make sure that the "back flow" does not damage transformers and meters that may be a considerable distance from the houses. Finally, the utility company will have to implement additional procedures to deal with the intermittent nature of the electricity generated from the solar panels. For example, a passing cloud can reduce solar power generation by 60% or more in a minute or less.  So the utility company will have to be able to ramp up or cut back production at some of it's thermal generation facilities on very short notice resulting in less efficient operation of those plants and increased costs.

Who will pay for this extra equipment and the maintenance of a significantly more complicated electrical distribution system? The only ones paying utility bills will be the residents of the seniors apartment.

Now it could be argued that the owners of the single-family houses paid a lot of money for the installation of the solar panels and should reap the benefits in order to get a return on that investment.  That would be a very defensible position to take if there were not so many subsidies associated with the whole process.

Construction grants and incentives and tax write-offs are paid for by all tax-payers, regardless of whether or not they have the abillity to deploy solar panels where they live.  For example, what about all of the people renting their accomodation?

Feed-in-tariffs guarantee a fixed price for the electricity generated from a solar panel regardless of whether or not there is any actual need for that electricity at the time it is generated.  So while the owners of these single-family houses are on vacation and not using electricity all rate-payers have to compensate them for the power generated by their solar panels whether it is needed or not.  That could be a very nice revenue stream for a family that had equipped a vacation home with solar panels.

And what about the good folks living in the Mid-West, Ohio, Michigan, Indiana, Vermont, New York, Maine and especially Canada?  Solar panels don't work too well when they are covered by snow!

When you combine these inequities with the problems that roof-top solar introduces into the regional grid and the negative impact on the operational efficiency of the system as a whole you have to ask yourself "what is the real benefit here?"

Roof-top solar panels will never allow us to actually shut down a coal-fired or natural gas-fired or nuclear generation plant. Why? Because we have high electricity demands in the late afternoon and into the night as well as on very overcast days.  So we have to effectively maintain double the generation capacity actually needed.  Does that really make sense?

Personally I think there is a case to be made for requiring roof-top solar installations to be equipped with a significant amount of battery storage which would make it possible to time-shift the electricity generation to better match demand.  The problem with that approach would be that it would triple the cost of the installation which would make it very hard to justify for a home-owner (which is why I have argued previously that these kinds of residential generation and storage facilities should be owned by the local utility).

Another complimentary approach would be to provide subsidies for the construction of Concentrated Solar Power plants with Thermal Energy Storage that could be run starting in the late afternoon.

All things considered the continued focus on rolling out roof-top solar without storage is misguided in my opinion.  A more holistic approach which would allow us to actually decommission thermal generation facilities would be more appropriate.  I have outlined a number of components of such an approach in my Sustainable Energy Manifesto.

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