Self-Consumption PV Systems: Page 6 of 10
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These tariff changes have created a different set of economic incentives for owners of many home solar systems that will make energy storage systems more attractive to a segment of consumers. For most consumers, even where available solar levels are quite high, storage is a vital component of a reliable self-consumption system.
—Stu Statman, vice president of engineering, Sunverge Energy
Successful campaigns against solar are increasingly emboldening utilities. They quickly adopt the language and tactics that have proven successful in other regions, while the solar industry has not effectively countered the argument of a supposed cost shift from solar customers to other ratepayers. NEM is an accounting agreement that removes transactional friction by assuming all energy has the same value, whether bought or sold. The truth is that energy doesn’t always have the same value. We are already seeing negative midday wholesale pricing in California’s energy market due to the imbalance of load and generation, and the utilities point to this as proof that solar is overcompensated. However, the converse is also true. NEM undervalues solar by disincentivizing energy time-shifting or of delivering it as higher-value kW instead of volumetric kWh.
Ideally, as regions approach higher percentages of distributed generation, forward-looking utilities and utility commissions will create vibrant new markets in which distributed energy resources can participate by shifting loads and generation to balance supply and demand while providing ancillary services. Hawaii’s PUC envisions creating such a market, but has yet to concretely establish it. Nevada’s restructuring of the social contract without consideration of grandfathering existing systems creates massive disruption by gutting the economics of installed solar. Utilities in both states underestimate how easy it is to cut the cord today. As consumers do the math, adding the base charges, minimum bills, taxes and other fees to the volumetric rates, and compare that to independent solar, we’re seeing a shift beyond load defection to outright grid defection driven by pure economics, with a sprinkle of American independence on top.
—Philip Undercuffler, OutBack Power Technologies
The absence of net metering, and penalties for feeding PV power into the grid, create a strong motivation to use self-generated power directly or store it locally.
—Martin Volkmar, SMA Solar Technology
Do self-consumption requirements limit the maximum value that distributed PV generation can provide to utilities and regional transmission grids?
It depends on whether the utilities and regional grids attach any value to distributed PV in the first place. Many see it as a cost and not as a value generator. If they view it as a cost, then self-consumption simply lowers their cost.
—Marvin Hamon, PE, Hamon Engineering
I am a big believer in incentives rather than absolutes. A requirement for self-consumption, such as zero sell-back, is a knee-jerk response from a panicked utility. The networked grid, with an unbundled utility rate structure and open protocol communications, will allow the birth of the prosumer: the producer and consumer who will be able to buy and sell not just kW but a whole host of grid support features in real time. This increases the reliability and resiliency of the grid, enables the smart grid of the future, and moves us toward the big picture goal of 24 hours of sun—a planet running on a 100% renewable energy basis.
—Wes Kennedy, Fronius USA
There is a difference between rate structures that encourage self-consumption and regulations that mandate no export to the grid. To maximize the value of distributed PV and storage, the technology should support the ability for consumers to opt in to demand response and other utility-run programs with a share of the value. In some utility territories, JuiceBox Energy systems interconnect with an allowance for export. Once the utilities define the residential demand response programs, customers can immediately opt in without any reworking of the physical interconnection.
—Neil Maguire, JuiceBox