Solar's value is nearly 17 cents/kWh, utilities under-compensating

[kristopher]

Report: Solar's value is nearly 17 cents/kWh, utilities under-compensating
By Robert Walton | June 25, 2015

Dive Brief:
- Green-advocacy group Environment America has reviewed 11 net metering studies, and says eight of them showed utilities are under-compensating the owners of rooftop solar systems.
- According to the report, the median value of solar power across all 11 studies was nearly 17 cents per kWh, versus the national average electricity price of about 12 cents.
- Progressive solar policies around the country have helped the resource bloom, the group said: the first quarter of this year ended with 21,300 MW of solar capacity installed in the United States.

Dive Insight:
Throwing more fuel on the debate between rooftop solar owners and utilities, a new study finds the value of panel-power is almost 50% more than the nation's average electricity cost.

“While some utilities claim they’re subsidizing solar panel owners, our report shows the opposite is probably true,” Rob Sargent, senior program director at Environment America, said in a statement. “If anything, utilities should be paying people who go solar more, not less.”

That's ...

More at http://www.utilitydive.com/news/report-solars-value-is-nearly-17-centskwh-utilities-under-compensating/401285/

"Their" ALEC dollars at work against you.

[Travis_0004]

1. Since I pay 6 cents a kwh, I dont see how solar can be worth .17

This study didnt talk about environmental benefits so that cant explain the difference.

[kristopher]

2. 6 cents per kWh

Assuming you mean the price you pay for electricity from the grid before distribution, transmission and fees -

That is about average and as such, it does not give you information on the breakdown by source and function of the various energy providers to the grid. A classic example to demonstrate the point: one or two days this year, where you live, the demand for electricity will far outstrip the arrangements the utility has made to meet the estimated demand. They will need to scramble to obtain the needed power and most probably will call on one or more very seldom used sources of generation to meet that demand. To have that kind of capacity at-the-ready when it is only needed for maybe 20 hours a year means the generator has to pay itself off with that kind of low usage. Obviously if you can spread the investment cost of the generator out over 4000 hours per year it is going to be a lot less expensive than if it has to be amortized over 20 hours per year. That is an extreme example, but the same process is at work everyday as variable demand is met by a variety of combinations of generation.

The grid also needs small 'squirts' of power to be injected to correct localized imbalances in demand and supply along the distribution/transmission system. This is some of the most expensive power that the utility requires.

Solar is a great way to minimize both of those types of expenses. It reduces the amount spent on daily auctions to meet demand and it provides supporting power to stabilize the supply.

Hope that is clear.

[Finishline42]

3. Real world example of the benefits of Solar - Germany

To reinforce Kristopher's point - here's a story about how Solar has reduced the cost of peak power in Germany - to the detriment of pumped storage.

On May 8, the prices for hour contracts on the Phelix exchange – the German and Austrian grid – for May 9 were roughly 1.5 cents lower per kilowatt-hour for peak power than for baseload power. The difference was even greater in Switzerland, with peak power costing two cents less than baseload power. This situation marks a complete reversal; until recently, power cost a lot more at times of peak demand – after all, rising demand usually brings up prices.

(snip)

Under the new market conditions, however, there’s no money to be made on sunny days in May. German power consumption generally stretches from 40 gigawatts at night to as much as 70 gigawatts on summer workdays – a difference of roughly 30 gigawatts. But Germany now regularly gets more than 20 gigawatts of solar power on sunny summer afternoons, with more than 22 gigawatts having been added from 2010-2012.

(snip)

But first, we have to get through this interim period. Existing facilities are increasingly unprofitable. German weekly Die Zeit recently reported that Vattenfall may shut down the country’s oldest pumped-storage facility, with a capacity of 120 megawatts, and the firms behind a new proposal in the Black Forest currently see no profitability. In addition to the fast growth of solar, the article points out that forecasting has improved greatly, allowing coal plants to react more flexibly – thereby reducing the need for pumped storage.

http://energytransition.de/2013/05/the-flattening-of-peak-and-base-prices/