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Response to saras (Reply #1)

Sat Feb 25, 2012, 05:32 PM

2. The utility doesn't like it because it reduces their market influence and profits

It might seem a bit complicated but the utility has to pay up to 30X the average cost of wholesale electricity for the 'peaking power' they need to meet mid-day demand. They have it structured in most places that small producers, like home-owner solar is too small to be dealt with under the regulations that allow them to receive that sort of value for the electricity they produce. By putting together a lot of panels into one legal entity as viewed by regulatory framing, the utility has to pay the solar owners the same way they would have to pay a natural gas plant.

The utility is probably giving the individuals who own solar a 1:1 credit for what they produce; meaning that the homeowner buys the system, generates their own mid-day needs, plus extra that the utility uses. Thus for no investment the utility has peaking demand reduced, buys the homeowners peaking excess at dirt cheap prices, and profits by selling that electricity for the same rate it sells all other peaking electricity.

So, if your benchmark is "does the bill work to make solar affordable for homeowners and does it help speed the deployment of solar", then most bills of this sort are extremely effective. They should, of course, be crafted so as to protect the consumer from bad business practices also.

If your benchmark is "does this type of regulatory change protect the utility's profits" then it is indeed "sucky".


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