Net metering and the death of US rooftop solar

“Net metering” allows anyone with a solar installation to sell surplus solar power to the grid when the sun is shining and to purchase power back from the grid when it isn’t. Net metering has been described as the lifeblood of solar in America, and it’s probably true to state that without it there would be few, if any domestic rooftop solar installations anywhere in the country. However, the program is now coming under attack, with Hawaii and Nevada recently rolling back net metering benefits and with a number of other states also considering changes. What happens if enough states impose similar rollbacks, or maybe do away with net metering altogether? This post reviews this question and concludes that domestic solar in the US will slowly wither and die.

The Nevada decision

On December 23, 2015, the Nevada State Legislature passed Senate Bill 374, following which the state Public Utilities Commission cut the rate payable to owners of domestic solar installations who sell surplus power to Nevada Energy. The rationale was that intermittent solar power sold to the NV Energy grid “differs from” the dispatchable power the grid sells back and that domestic solar owners were getting paid too much for the former and not paying enough for the latter:

The order separates the prices of energy and related services provided by NV Energy, and the intermittent renewable energy provided to NV Energy by net metering customers. This approach is fair because it recognizes that the energy and suite of energy services provided by NV Energy to net metering customers differs from the intermittent excess energy delivered to NV Energy’s system.

This decision will be welcomed by all who recognize that solar is incapable of providing more than a small fraction of total electricity supply because of prohibitive storage requirements and that it’s presently getting a free ride on the back of grid generation that substitutes for storage. Certainly my rooftop solar panels would be totally uneconomic if I couldn’t use grid power at night and had to use storage batteries instead.

The Nevada solar industry, however, was not amused. Three solar companies – SolarCity, Sunrun and Vivint – announced they would have to cease operations in the state and local installers have been forced to cut staff. Also not amused were Nevada’s 18,000 existing rooftop solar array owners, who thought they were “grandfathered” but found that they weren’t. Their response was to launch a class action lawsuit against NV Energy alleging the utility “conspired to unlawfully reduce incentives” and NV Energy caved in, announcing that it would file a proposal to keep existing customers on the old rates, recognizing the desire for a “stable and predictable cost environment.”

“A potentially worrisome precedent”

But still the outcome in Nevada sets a potentially worrisome precedent for the US solar industry, with roughly half of all U.S. states currently studying or changing their net metering policies. States are taking action now because domestic solar in the US has grown so fast that several of them are now approaching or have already reached their net-metering caps. (A net metering cap is a target set by state authorities and it’s usually related to some fraction of peak demand or to capacity. But each state uses different criteria and some of them are extremely complicated. Details for anyone who might want more information are available here and here).

Two states other than Nevada have already revisited the question of how much intermittent solar power is really worth and how much of it their state can really use. The first was Hawaii, where some of Hawaii Electric Company’s grids were getting swamped by rooftop solar to the point where solar generation exceeded total demand at daytime solar peak. An example is given in Figure 1, which shows “backfeed” conditions between 10.30am and 2pm on August 8, 2013:

Figure 1: Average transformer load showing “backfeed” conditions, Hawaii utilities

Because of growing problems of this type the Hawaii Public Utilities Commission shut the net metering program down for new participants in October last year. As was the case in Nevada this shutdown was also accompanied by weeping, wailing and lawsuits from the local solar industry and rooftop solar owners, but the situation was obviously unsustainable. And it arose with less than 1% overall annual solar penetration in the state, not the 10% commonly assumed. More about this later.

Another state on a collision course with net metering is California, the home of the “Duck Curve”: (The Hawaii curve is known as the “Nessie Curve”, although the resemblance is less obvious.)

Figure 2: The California “Duck Curve”

At expected rates of solar growth California will also have a potential overgeneration problem by 2020, and the ramp rates needed to cover the period between about 5pm and peak load at 9pm reach potentially alarming levels. California’s solution has been to mandate the installation of 1.3GW of storage capacity (again no “h” given) by 2020, but this is just a drop in the bucket by California standards.

Current Status of the US solar industry:

One of the remarkable things about the US solar industry is how insignificant it is. Figure 3 plots percent solar penetration in the 36 states for which solar data are available (estimated as total solar generation divided by total generation using 2015 data from the EIA detailed state generation data base). The average level of penetration in 2015 was only 0.6%, and many states generated effectively no solar at all:

Figure 3: Solar generation by state as a percentage of total generation.

Only California is anywhere close to 10% solar penetration. Solar penetration in Nevada is less than 5% and in Hawaii less than 1%. (I checked this number and found that according to Hawaii Electric Company it’s correct). The implication is that solar may begin to stress grids at levels of penetration much lower than 10%, particularly at the local level.


What we are seeing here is a conflict between on the one hand the utilities and grid operators, who view solar as a threat to their bottom line and to grid stability, and on the other the green lobby plus the residential owners, installers and PV panel salesmen who are now benefiting from the proceeds of subsidized solar and the existence of net metering. The surprising thing, however, is that this conflict has broken out even though solar still contributes a negligible percentage of the US generation mix. Why should this be? I think partly because the hundreds of thousands of homeowners who have installed solar arrays are dependent on a continuation of net metering to recoup their investment, partly because 200,000 people are now employed in the US solar industry, partly because solar can in some cases destabilize grids even at low levels of penetration (viz. Hawaii) and partly because of the claims made by some scientific organizations as to the percentage of US electricity generation solar could ultimately fill, such as:

  • US National Renewable Energy Laboratory: 39% with rooftop solar PV alone
  • Stanford University: 38% by 2050
  • US Department of Energy: 27% by 2050
  • International Energy Agency: 36% by 2050 (with solar thermal)

Numbers like this, which assume an approximate sixty-fold expansion of US solar capacity over present levels, can only be described as wishful thinking. Yet in the minds of many they are realistic targets.

But what happens if net metering benefits are rolled back? I picked an example which should be fairly close to reality – a household in Southern Nevada that consumes 11,000 kWh/year, the US average, with a 5kW solar array on the roof. I constructed a crude daily demand curve to show a peak around the breakfast hour and a larger one in the evening when everyone is at home watching large-screen TV or playing computer games and all the lights have been left on. Figure 4A shows hourly consumption and solar generation for the household during an average day (which assumes 12 hours of sunshine and a capacity factor of 19%, which is about right for Southern Nevada.) When the sun isn’t shining the household gets all its power from the grid, but for about 7 hours it gets all its power from the 3kW solar array. And over this period the array generates a healthy surplus that gets fed back to the grid, sending the electricity meter into reverse and causing it to wind rapidly backwards:

Figure 4: Demand, solar generation and consumption for a “typical” Southern Nevada household with net metering in place

Figure 4B shows the cumulative impacts. At the end of the day the household has consumed 30.3kWh, but because of the surplus solar power sent to the grid it gets charged for only 6.7kWh of grid power, which at current Nevada retail rates of $0.11/kWh works out to the princely sum of 74 cents, or an annual bill of about $270. Compared to what the bill would have been without solar (about $1,200) this gives the owner something like a ten-year payback on his or her solar investment after federal and state tax credits, which is not too bad when one considers that the solar array adds value to the house and that the PV panels will, one assumes, continue to generate electricity after payback is reached.

Nevada’s net metering rollback will, however, ultimately reduce the payment homeowners receive for solar electricity sent to the grid by 75% . How much difference will this make? Instead of saving almost $1,000/year on electricity bills the homeowner will now save only about $250/year. Even allowing for federal and state tax credits this will make domestic solar totally uneconomic in Nevada. And if other states follow Nevada’s lead it will eventually become uneconomic in those states as well.

And the problem doesn’t stop there. US utilities, with some justification, are also angling for increased charges to cover the costs of integrating growing amounts of solar power with their grids. (Nevada’s “grid connection charge” is scheduled to triple over the next five years). The end of the net metering road will of course be reached when the grids can’t physically accept any more solar, or no one will be able to afford the grid connection charge, whereupon Figure 4A will look like this:

Figure 5: Demand, solar generation and consumption for a “typical” Southern Nevada household with no net metering in place. The household is capable of powering itself for only about 8 hours.

Yet some believe that net metering rollbacks will provide a new opportunity for US solar. This article (which describes net metering as solar’s “junk food”) proposes a “value-of-solar tariff” where “solar customers are paid for the value of the electricity they produce at the specific time and place they put it on the grid.” This seems fair, but it too would probably kill rooftop solar. The California duck curve shown in Figure 2 shows how. The solar power produced in the middle of the day exceeds grid requirements and would therefore have to be sold at a low price if not wasted altogether, and at the nine o’clock peak, when power is in greatest demand, the sun has set or in in the process of setting. Another article views net metering rollbacks as an opportunity for domestic solar producers to go off-grid entirely and fill demand from energy storage, either in a utility-owned or domestic storage facility. But “to make the storage option appealing to customers … it would need to be offered using a low capital expenditures (CAPEX) business model.” “Energy storage” and “low CAPEX” are, however, mutually-exclusive terms, so that won’t work either.

It therefore appears that the future of domestic US solar depends on how far the states that are currently considering or reconsidering their positions roll back net metering benefits. And they probably wouldn’t have to roll them back very far before rooftop solar becomes uneconomic – unless of course the government jumps in with yet more subsidies. But hope springs eternal, particularly in the breast of the US solar industry.

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69 Responses to Net metering and the death of US rooftop solar

  1. Joe Public says:

    An interesting analysis Roger.

    ” … partly because 200,000 people are now employed in the US solar industry, ….”

    Earlier this year Greenpeace tweeted “Wow! More people work in U.S. solar industry than in oil and gas extraction.”

    They failed to mention that that same number of workers produced 725x as much energy, and that that energy was available 24/7.

    • Euan Mearns says:

      Joe, this hits the nail on the head. We can become hunter gatherers where we all get jobs working 12/7/52 in the energy industries.

      How To Create A Million Clean Energy Jobs

      Appendix A: How to Create a Million Clean Energy Jobs

      Easy. Pay a million people to ride stationary bicycles connected to generators. Not a lot of power, though. And probably very expensive unless you subsidize it.


      It boils down to ERoEI. At ERoEI = 1 we are all engaged working full time on getting energy to survive.

      • Willem Post says:


        “It boils down to ERoEI. At ERoEI = 1 we are all engaged working full time on getting energy to survive.”

        No so.

        It takes a minimum ERoEI of at least 3, of which 1 is used to get the energy, and 2 is used to minimally feed and house the people walking to work and to provide them with minimal tools, i.e., a very low subsistence level.

      • gweberbv says:


        I never got this ERoEI thing.

        If it is in principal a good idea to use a heat pump that typically adds a factor of 3 to 4 to the input energy, it should be an absolutely genius idea to use the same energy as input for solar cell factories or wind farm developments. Because these energy harvesting facilities typically yield much higher factors (and in form of electricity, not just heat).

        • Euan Mearns says:

          There will be a post called “ERoEI Master Class” coming soon. Its more complicated than many assume but still a vital concept too often ignored in energy economics. Good luck making solar panels with low grade heat from a heat pump. The starting point for thinking about any of these processes is mining raw materials.

          • gweberbv says:


            maybe my comment was not clear enough.

            Using a heat pump allows you to generate 4 kWh heat from 1 kWh input electricity. And most people say ‘great!’ because this is four times better/more efficient than using the electricity directly to generate heat.

            Now you build a solar cell and even the less optimistic forecasts predict that you will have an ERoEI of 4 in northern Europe. And with a wind turbine you may get values between 15 to 40.
            Naive question: Shouldn’t people be equally excited?

          • Euan Mearns says:

            Linking ERoEI to money is not easy. But let’s say ERoEI of 5 = 1% return on money (I know you may think its should be 500% but its not) while ERoEI of 50 = 10% return. One is viable the other is not.

          • steve says:

            Do you plan to delve in to energy analysis? Looking foreword to the post regardless.

        • Willem Post says:

          Energy obtained / Energy used.

          If I spend one unit of energy to obtain 40 units of energy of coal ready for transport to a customer, then the ER/EI = 40

          A modern society needs an overall ER/EI of about 14 to function, I.e., provide all the services and goods, etc., we are used to.

          • gweberbv says:


            the following you should not take too serious, but please think about it:

            Wouldn’t it make sense to convert the 39 remaining units of (non-renewable) coal energy into energy harvesting machines that generate – let’s say – 390 units of energy from renewable sources? This would give you an additional leverage on the existing ERoEI of coal of a factor 10.

            If this does not make sense – why? Just because the typical renewable energy source is not dispachtable?

          • Willem Post says:

            Addition to my below comment:

            Of the 14, 1 is used to get the energy, the other 13 are used for all the other stuff to keep the economy going.

            The US, being an energy waster, has an ER/EI of about 18 – 20, due to the energy and resources inefficiency of major sectors, such as the military/industrial/intelligence complex, healthcare, and education, and the people being spread out over a large area.

            Energy sources, such a bio, wind and solar, all have ER/EIs less than 14.

            They pull down the average of the other energy sources that have ER/EIs greater than 14, such as coal, gas, nuclear, hydro.

          • nukie says:

            Willem, the problem is that costs are not energy alone. If you only invest energy, but no significant amounts of capital or labour in a process, and if the source of energy is big enough, a EROI of 1,4 instead of 14 is also OK, since it can also provide the neccesary energy for everything. Just the amout of energy cykling in the system is bigger. The EROI of 14 includes a big pile of asumtios about the cost of energy introduced in the system and the costs of labour and capital introduced in this system.
            To see this do a calculation with a hypotetical enegry sytem which has zero labour and zero capital costs, so just needs energy and nothing else to build new generation units, and cycles 10 times more enrgy within itself than it delivers for other purpose, but energy which is completely free of costs, pollution, etc.

    • Leo Smith says:

      Yeah, the myth of job creation…

      The less people work in any industry, the better. For everyone else.

  2. JerryC says:

    Very interesting post. Rooftop solar in Nevada is one of those things that intuitively seems like it ought to be economic, and you have very clearly explained why it isn’t. Well done!

  3. pyrrhus says:

    As a rooftop solar owner in southern AZ, it was the federal and state upfront subsidies that made it really worthwhile. Hard to believe that peak usage is at 9 pm around here, however, as the temperature has usually dropped 20 degrees by then, and unlike Nevada, all the businesses are closed.

    • If you’re anywhere close to Tucson, where I lived for many years, peak summer demand occurs between 5 and 6pm. I have no idea why it occurs between 8 and 9pm in California, but one possibility is that it takes the average freeway commuter three hours to get home from work 😉

  4. Grant says:

    Any time people start to crow about employment levels in energy generation, especially niche applications, we should remind them that a large workforce either means high cost or slave wages.

    Similarly if the support funding comes via subsidies someone somewhere is paying without gaining. Eventually that model will filter down to today’s lucky owners and their costs will increase.

    Alternatively the unlucky majority might take things into their own hands if the imbalance is seen to extend too far.

    I sense an opportunity for solar powered tumbrils based on redundant solar power batteries and Segway self balancing technology.

    If charging the tumbril batteries does not fix the economics at least they could be used to transport the subsidy farmers to places of “safety”.

  5. Tom Bates says:

    The solar energy needs a storage device. Pumped water is such a storage device and is most likely a lot cheaper than batteries. An alternate is pumped air into underground storage in old natural gas fields.

    • you need to do the maths, the subject has been dealt in the previous articles

    • climanrecon says:

      Household storage would kill the rooftop solar industry stone dead, no longer any justification for selling any surplus to the grid, nobody is going to spend $10K dollars on shaving a bit off their electricity bills.

      Great for those off-grid, or on poor reliability grids.

  6. Tom Bates says:

    I looked into the costs of going solar. The Tesla guy who owns solar city salesman came out to the house and we went through the numbers. It turns out if you do not buy the system the lease cost is increased 8 percent each year for 20 years from the base rate. if you buy the system they want three times what the retail cost is for the panels and hardware. Throwing in two days to install with two people they are basically ripping people off who install their solar and ripping off the taxpayers as if you lease they get the solar credits. If you really want to go solar, buy the panels and hardware from one of the internet companies that sell it, the largest will even design the system for you and than hire two electricians for two days to install it on your roof, or simply pay somebody three times the actual cost of the hardware.

    • Thinkstoomuch says:

      If you are putting it on your roof consider your area, Please. Lots of zoning building code requirements they vary widely, from snow loads to wind loads to earthquakes. If the inspector doesn’t sign off then you don’t connect to the grid.

      Next. Please consider who you get to put 20 to 40 plus holes in a perfectly good roof. Think of how easy it is for just one of them to leak and the repercussions.

      Lastly think about the fire dangers you are dealing with.

      Sometimes it really is better to let trained, experienced personnel do the job. It does not save you money why the house burns down or in 2 years you have structural problems.


  7. Willem Post says:


    Southern Germany (Bavaria) has over-production of solar on sunny days.

    The excess energy is sent to France for balancing by hydro plants, which merely reduce water through their turbines.

    Balancing the energy in Bavaria cannot be done, as dispatchable output cannot be reduced below a certain level, and that output would be needed a few hours before and after the “solar sweetspot”, which is turning into a nightmare.

    The energy cannot be sent north, because of a lack of HVDC lines; about 50 billion euros, more than 10 years behind schedule due to NIMBY.

    In Germany, solar owners have 2 meters; through one goes all of the production to the grid (current tariff about 13 eurocent/kWh), through the other goes all the self use (about 30 eurocent/kWh, incl. all taxes, fees and surcharges), as it did before the solar system was installed.

    Such a system is fair, as the solar owner pays the same for grid use, as do non-owners.

    At present, the cost of battery storage in prohibitive.

    German “Before-The-Meter” Battery Systems:

    In Germany, at the start of the ENERGIEWENDE in 2000, household electric rates were about 20 eurocent/kWh and PV solar feed-in tariffs were about 55 eurocent/kWh. German households reacted to this great deal by loading up their roofs with solar systems. About 7400, 7500, 7600 MW of solar systems were installed in 2010, 2011, 2012, respectively.

    Since then, household rates have increased to about 30 eurocent/kWh (the second highest in Europe, after Denmark), due to various increases in taxes, surcharges and fees, and PV solar feed-in tariffs have decreased to about 12 eurocent/kWh, and systems installation decreased to about 39698 – 38236 = 1462 MW in 2015, despite much lesser system costs/kW.

    As it no longer pays to sell solar energy to the utility, some households have installed battery systems to use that energy themselves, which, as shown above, likely does not pay, but households install the battery systems anyway, because cash subsidies are at least 30% of turnkey system cost, and because they may be somewhat ignorant of the real economics.

    The economics of this scheme is based on the unrealistic assumption PV solar energy would be available to charge the batteries, to the maximum extent possible, each and every day for 10 years, and that all of that energy would be used at night. The below calculations are based on that assumption.

    NOTE: The output of a solar PV system could be split with DC, via a charge controller, to the batteries, and DC to an oversized hot water storage tank and other DC users in the house, with the remaining DC, via the solar PV system inverter, as AC to the house and the grid.

    Assumptions: NO performance loss over its 10-yr warrantee life; one cycle per day, i.e., 3,650 cycles; daytime solar energy generated by the homeowner could have been sold to the utility at 12 eurocent/kWh; homeowner avoids buying nighttime energy from the utility at 30 eurocent/kWh; usable energy 6.400 kWh (discharge eff. = 6.4/7 = 0.914); charging energy 7.656 kWh (charging eff. = 0.914).

    Energy-shifting gain over 10 y: 3,650 x (6.400 x 30 – 7.656 x 12) = 3654.56 euro

    The German turnkey cost of the TESLA 7 kWh unit likely would be about 25% higher than in the US, due to shipping, import duties, labor rates, value added taxes, etc., which would be offset by the 30% cash subsidy, i.e., 6500 x 1.25 = 8,125 euro, less 30% = 5,688 euro, or 1.558 euro/d, or 1.558/6.400 = 0.243 euro/kWh; with ignored costs, the actual storage cost would be about 0.30 euro/kWh.

    Storage cost over 10 y: 0.30 x 3650 x 6.400 = 7,008.00 euro

    Net cost: 7008.00 – 3654.56 = 3,353.44 euro

    Ignored costs: The cost of financing and amortizing, PLUS any costs for O&M and disposal, PLUS any capacity degradation due to cycling, PLUS other system losses, PLUS efficiency reductions of part-load operation of AC/DC and DC/AC inverters, are ignored.

    Conclusion: The rate differential would need to be even higher to offset the remaining cost, and/or subsidies would need to be increased.

    NOTE: For people living “off-the-grid”, it is essential to store solar energy during the day for use at night.

    • Beamspot says:

      Be warned that no Lithium chemistry can withstand 3652.5 cycles at 100% DOD (LiFePO is about 2000, but is more expensive – 50% minimum – and uses much more Lithium and other materials).

      Tesla’s Model S batteries had been published to withold about 700 cycles at 100% DOD before they have to be decomissioned, and they tend to be ‘higher power’ (cilindric, Li-ion cells are never ‘high power’) than PowerWall cells, that use ‘high energy (and low price)’ chemistri, thus hardly can withold even those 700 cycles.

      Even less 3652.5.

      Unless they only use a mean of 1.5KWh per day, at very low power (<1.5KW), that is what I read in some lost green biased propaganda that didn't connect the dots…

      Under those circumstances, they hardly save up 800€ in the whole lifespan.

      And under the chapter of 'unknown expenses', we must add the cost of the inverter, that probably wouldn't last 10 years also: they use electrolytic aluminum capacitors, that last less than 10.000 hours (one year has 8760, IIRC).

      BTW, average, as well as peak temperatures, shorten the life of the batteries, that is why serious car manufcturers didn't sell pure BEV's south of the Pirenees: those countries are too hot that those batteries got older due Arrhenius in 5 years or less, even (in fact, specially) if the uses didn't cycle them often.

    • robertok06 says:

      On Germany:

      yesterday there has been a beautiful clear sky day all over Germany, with a peak production of 28 GW from the 39 GWp of PV installed over there… too bad the high-pressure area has slowed down virtually to zero the wind farms….

      … with the result that the conventional thermal units had to step up production.
      Clicking on “import/export” one sees that Germany during the exceptional PV production has exported towards all neighboring countries except France and Denmark, from which it has imported in the early part of the day.
      The cumulative export peak mirrors the PV production curve… making, as is well known, the german PV totally irrelevant in terms of emission reductions… their lignite/coal units running at full blast.

      Wonderful Energiewende, isn’t it? 🙂

  8. John F. Hultquist says:

    #1: Another thing about solar in the USA is that most of the population is north of that Tucson Latitude and, also, cloudier. I’m at 47 degrees North and at 2,200 feet elevation. In summer, I open the windows and doors and let the cool night air chill the house. On the hottest days I only need AC for a few hours. In winter, when heat is a necessity, there is very little solar electric available. [House is 100% electric (hydro) with wood stove emergency heat.]

    #2: There is a small solar facility (central Washington State) owned by Puget Sound Energy. This is mostly a wind place. I don’t believe they have added any more solar after the 2007 start.

    I used Google Earth for the location: 47.020852, -120.223520
    The Visitor Center, with 3 more arrays, is 1.18 miles to the southeast.

    #3: The nearest town used a grant to install 5 wind towers and some solar. One of the towers fell over in a 50 mph wind. Next they took the other 4 down and silence remains. Google Earth has a function that goes back to earlier photos. To see the, now removed, towers use these coordinates …
    46.990845, -120.570234
    … and move the time slider to 7/9/2013.
    The current image is 5/6/2015 – shows the spaces, but the structures are gone.
    Use “Street View” and the image is from September, 2015.

    The solar generation still works for those city residents that bought bragging rights. That costs them extra.
    However, the city rushed into the program without carefully working out all the contingencies and understanding the uncertainties.
    Some homeowners have sold and moved. Others seem to have vanished (no longer paying) and the city did not have a plan for how to deal with such things. They are now trying to get this figured out. As an outsider, I sense all the city’s residents are paying more than they know for this “green” scheme.
    I wrote the local newspaper and asked if they would look into it. That was a year ago.

  9. Lisa says:

    The curves associated with energy usage are not entirely natural. Sure, some people watch prime time TV, but many people work jobs that are something other than 9-5/M-F. The real reason for the curve for residential consumption is the existing rate plans put in place by power companies to discourage power consumption during weekdays, when businesses use a great deal of energy heating and cooling their buildings, and running factories. Homeowners pay more for electricity from 12pm-7pm, or 9am-9pm on weekdays. So, of course, budget-conscious residential users do laundry, run the dishwasher, and other power-intensive tasks when the rates are lower. Some even put timers on their hot water heaters, so they only run during off-peak hours. -And the power companies encourage them to do so! It’s in all of their energy efficiency educational materials!

    Times have changed. If power companies have a glut of power when the sun is shining, they should re-think their residential rate plans to encourage households without solar panels to start using energy the way those of us with panels already are accustomed to doing.

    • And what way is that?

      A couple of years ago I installed 2.25kW of (unsubsidized) solar panels on my roof, and because of the electricity rate structure here in Mexico they have cut my electricity bill by about $100/month. But I still turn the lights on when it gets dark (thank you, grid) and crank up my computer when I get up in the morning. In fact I do everything the same way now as I did before I installed the panels. How should I have modified my behavior?

      • Roberto says:

        You are right to ask, I too have never I understood how one should change his/her habits… suppose I want a beer past sunset, should I postpone drinking it to the morning after so that I do not open the fridge when the sun doesn’t shine?…
        Seriously now… all the people I know which have pv on their roof are well-to-do households with well above the average energy consumption, starting with a hybrid SUV, sometimes a Porsche Cayenne or Lexus…
        I don’t know you, but I have a hard time accepting to be patronized by any of them for my energy consumption pattern and habits…

      • gweberbv says:


        without changing your behaviour, you could install an ‘intelligent’ electrical outlet that turns your dish washer, washing machine, dryer, air conditioning, etc. on when you have excess production from your solar panels. (Still you can force your machines to run independent of PV production when you want them to do so.)
        Such outlets with WiFi connection cost between 50 and 100 bugs.

        • But I have no way of knowing when I have excess production from my solar panels. And my wife rules the operation of the washing machine and dryer with an iron hand. Installing an intelligent outlet would also do nothing to reduce my electricity bill, which is hardly worth reducing anyway because it rarely exceeds $5 a month. So I would be spending between 50 and 100 bugs – I assume you mean bucks – for nothing.

          • gweberbv says:


            it is not too hard to get a hand on the production data of your inverter and/or the consumption data of your household.
            But with electricity prices next to nothing, this does not make much sense, I agree. So, do you get your 100$/month reduction for the very fact that you have a PV system installed? Independent from your actual consumption/usage of the PV system’s output?

          • Yes, I get my $100/month reduction simply because of the solar array. As far as I know all of the system’s output goes to the house so long as it doesn’t exceed utilization and any that does goes to the grid. But when you’re looking at such absurdly small monthly bills (my last one was 68 pesos, or about $3.90) you really don’t much care where it goes.

            And I think this is going to be the problem with all the smart doohickeys that the enthusiasts want to hang on rooftop solar installations. The vast majority of owners just aren’t that interested. Unless of course they wheel out yet another trough full of subsidies.

          • gweberbv says:


            is there any control if your PV installation is working or not? If not -> madness!
            But even if they take care, that you do not install a fake PV system, this is very strange. If you buy the parts on the internet, you might get a 3 kWp system for 4000 $. This would be nearly payed off after only 3 years! Unbelievable! PV at your place seems to be more profitable than drug smuggling.

          • I have a 2.5kw Fronius inverter which tells me that the system is currently putting out 600kW AT 4.20 PM under cloudy skies.

          • gweberbv says:


            please excuse my curiosity: But if it was exactly zero all the time because you sold your PV equipment on the secondhand market, would anyone bother? Could you still get your 100 bucks per month?

      • Stuart Brown says:

        Well, a couple of years ago I lived in a 100 yr old (UK) house with a mechanical meter installed in the ’80s. It switched with a clonk to a tariff about a third of the daytime rate between 10pm and 7am GMT – it didn’t understand about British Summer Time. So I always used to set my washing machine, dishwasher and dryer to come on at night. Saved me a small amount of money for no effort, but I would never have put a timer on the freezer!

        Now I live in a modern house with a ‘smart’ meter… and apparently I can only have one tariff day and night. So now I don’t bother when I set things off in spite of the fact the national demand is still higher during the day.

        Tariffing policies could clearly help to some degree, they seem to have been a good idea in the past – surely no-one is suggesting that the evening TV has to be watched at midday! Smarter ‘smart’ meters might help too.

  10. mike h says:

    Technology is moving pretty fast, have you considered how direct transactions might be an alternative to net metering?

    This kind of approach, that completely bypasses the HV grid could revolutionize residential power.

    • Greg Kaan says:

      This type of approach is essentially freeloading on the infrastructure established to distribute electricity from dispatchable generators. What happens when it is cloudy?

      If these “community microgrids” draw lower power while the sun shines but then need to draw normal power levels from the HV grids at other times, then the HV grid operators will be well within their rights to sell power at higher rates and charge higher connection fees. The economics are unlikely be favorable unless they are highly distorted by supporting legislation (as with other non-hydro, renewable power schemes)

    • Those who espouse microgrids should take a look at the island of Eigg, where something resembling the microgrid of the future has been in operation since 2008. The island gets its power from a 24kW wind farm, a 32kW solar array and a 119kW hydro plant backed up by 220kWh of lead-acid storage batteries and a “high-voltage smart grid”. The total installed cost was £1.66 million (almost all financed by grants) and the estimated levelized cost of electricity is £1.38/kWh. Demand management is handled by “red light” days (a red light appears on your meter when there isn’t enough electricity to go round, warning you to turn your electric kettle off), and any consumer who at any time exceeds the 5kW (residential) or 10kW (business) limit gets his or her power cut off and has to pay a fee to get it reconnected.

      I think I like things the way they are.

      • mike h says:

        These are being studied and tested in order to understand the best way of; reducing outage risk in major events (super storm sandy), efficiently integrating renewables without needing to spill power to the HV grid and developing new infrastructure in developing countries where an HV grid is highly unlikely ever to be built as we know it in the OECD.

        So what if this approach is not in line with the business model conceived over 50 years ago? HV grids receive a regulated return and need to continue to adapt to the requirements of society, i’m not suggesting this should be free.

        Given how far and fast changes in the power system are evolving, To completely exclude the idea of this on the basis of one tiny implementation that is almost 10 year old seems somewhat cavalier.

        • It would indeed be cavalier if we needed to “continue to adapt to the needs of society”, as you put it. But these “needs” are being defined by a small, vociferous and elitist minority. I suspect that the majority of people – at least in developed countries – would be perfectly happy to keep going the way they are.

  11. Euan Mearns says:

    Someone mentioned solar at high latitude. This is UK January and July 2015. The UK will never have the problem of Nevada or California where huge solar spikes swamp the grid at midday 😉

    In winter time, when demand is highest, UK solar produces nothing! What we need are lights to shine on the panels 😉

    The only achievement of UK solar in summer is to displace FF generation – that is after all the objective. But in doing so it will ultimately make the FF generators unprofitable and they will go out of business – which is already happening. Solar, like wind, is parasitic.

    Parasitic wind killing its host

  12. Euan Mearns says:

    At the heart of this post lies the recognition that all energy is not born equal and the Nevadans have attached a value to dispatch. Dispatchable power that is available to us to use when we want or need to use it has much higher value than non-dispatchable power that often shows up when we don’t need it. A major issue that will have to be confronted one day is the fact that we are paying more at present for the less valuable power. Its broken economics and broken capitalism.

    • “All energy is not born equal” Got in in one Euan. But the whole net metering problem is about paying more for less valuable power, so the US is beginning to confront it already.

      • Thinkstoomuch says:

        I would say “certain” parts of the US are figuring it out. Some states figured it out a long time ago.

        Here in FL, fuel charge and other charges are separated out. The fuel charge what I would get paid for excess (at the end of the year) is ~25% of the cost. 2.173 cents a kWH.

        Which I think is a fair way to do it. Of course solar power is not close to economical at that rate!

        Though it does make our bills somewhat complicated to decipher.


  13. Jon Carry says:

    Could someone smarter than me explain how electricity from a residential solar panel even gets to the grid? The only transformers in my town are step down transformers. How does 110 volt juice get turned into 115kv?

  14. Roberto says:

    ‘Current status of us solar industry’

    Once giant SunEdison has just filed under chapter 11 bankruptcy claiming 16.1 billion dollar losses, or more than 7 times the losses of (according to popular galore) ‘moribund’ Areva.

    ‘Nuff said.

  15. Olav says:

    In Norway we have not yet been informed on what price surplus PV production is paid. The last info I had was Nord Pool price plus 5% which is about 3 US cent a kWh, In the evening when you claim the power back you have to pay 11 US cent a kWh. If I am putting up I will limit the installment to summer time day load which is approx. 2 kW . Reason for such a high load is that I have some tenants with electricity included in rent. By putting water heaters and freezers on day time power draw only I may get the load up to 3 kW. The utility can limit the economy of PV by paying little or nothing for your export. But without rigging the tariff structure they can not take away the benefit from a meter that hardly moves when the sun shines.
    An installment of “moderate” size combined with timing of electricity usage is still as good as net metering was. In Australia is even that possibility difficult as utilities are introducing solar unfriendly tariff structures. I expect that will happen in sunny part of Europe too.

  16. stone100 says:

    Have you seen this Energiesprong set up whereby net electricity metering is used to “pay for” EUR40k super insulation retrofits. I’m a massive fan of their efficient super-insulation construction model. It just seems sneeky to me that they claim that because the electricity meters show zero net energy use (because of feed in from rooftop solar) it therefore is OK to pledge all the utility bills over to the bank that paid for the retrofit. What happens when everyone has had a retrofit and no money is going towards the electricity provision when it is dark?

  17. gweberbv says:

    I would like to contrast the following pciture with the (residential) production and demand curve from Fig. 4:
    Of course it makes sense to provide an incentive to feeding PV production into the grid. Simply because PV production coincides with peak demand (of the whole grid, not of the households). But net metering is the wrong instrument. Feed-in tariffs are the right one.

    • Thinkstoomuch says:

      For a residential roof top installation?

      Did you actually look at the grid demand picture for CA Roger posted?

      Here’s a link to current data and you can follow it backward to additional data sets. (Thank you for pointing me in that direction Roger).

      In Florida’s current net metering I can make money over 20+ years with a DIY (which as I pointed out above is a dicey proposition) install using net metering. Feed in tariff. Well maybe if the panels last 50 years for whoever owns the house then, if it is still standing. Oh yeah and the 4 nuclear reactors we are waiting for approval never get approved and the price of natural gas skyrockets and …

      Not to mention solar peaks here in April and demand peaks here in September.


      • gweberbv says:


        there are two principal arguments against net metering:
        1) With increasing renewables penetration energy costs will increase (even if one assume that in the long run this is cheaper than fossil fuel, you first have to pay back the investment costs). Net metering allows the customers to run away from this burden very efficiently. Thus, with increasing PV installation numbers one has to face an avalanche effect with less and less customers having to shoulder an heavier and heavier burden.
        2) Uncertaintiy (=risk) increases the prices. With a feed-in tariff an investor (be at a house owner or a pension fund) knows with great certainty what he has to expect from his investment. With net metering you bet on the development of retail electricity prices, connection fees, etc. Thus, one eithers offers more money to the potential investors or one will end up with less installations compared to the feed-in tariff.

        To have an equal incentive to residential PV and utility-scale PV the feed-in tariffs need to decrease with increasing project size. Here US suffers from the fact that there seems to be a factor of 2 to 3 in prices of residential PV to utility scale projects. In Germany, this is only something like 30% to 40%. As the reduction of consumption from the grid is an additional incentive for residential PV, the feed-in tariff in Germany for small PV installations needed to be only slightly higher than for much bigger projects.

        The CA demand curve is already strongly affected by PV production. If one is quite reluctant towards PV, one would stop incentivizing feeding into the grid at the point, when the (remaining) demand curve is more or less flat from the early morning low until the evening high when demand is highest and PV production vanishes (=minimizing the usage of FF peaker plants). However, I do not see a point why one should look only to the demand and production in CA.

        • Thinkstoomuch says:

          Seeing as how the title of the article is Net Metering and …

          Or the fact that California hugely distorts the entire power picture in the US South West where the best sun forecasts also lives. It would seem that CA is hugely important, Unfortunately.

          Look at populations. CA ~40 million, Nevada, Oregon, New Mexico, and Arizona total ~23 million.

          Latest I have found put CA importing around a 30% of its annual electrical requirements.

          Again intelligent net metering rules in Florida are somewhat stable, tied to bill kWH and fuel savings (since 2008). But then again our local electricity bill has gone down 7% in the last 10 years or so.

          So you are in favor of locking utilities into purchasing power at a fixed rate. Thank you very much the average FL customer where most older folk are dependent on AC. Saving 7% even before factoring in inflation is a good thing for people.

          Isn’t it grand when technology is allowed to do its job. Not to mention if the “local” utility is allowed to provide its service in a cheaper, cleaner, more CO2 effective fashion. Though I still want the NUKES built.

          Rooftop solar at the current costs for a DIY barely pays for itself even if the grid and generating station maintenance gets factored in. Feed in tariffs will make it straight up impossible.

          Yet somehow making power more expensive and less flexible for the utilities is going to help the average person. When they have to make electricity more expensive for the rest.

          I think I will pass,

          • Thinkstoomuch says:

            Yet another oops.

            The population figures also include the state of Washington.

            My apologies once again,

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  20. Greg Kaan says:

    I’m bringing up this previous post in the light of the Aliso Canyon leak – if this storage facility is not available in the coming summer, will there be an increased risk of the “duck curve” ramp requirements not being met?

    The alternate gas field being pushed as a replacement, Honor Rancho, is connected to this region by a 10 mile pipeline and would not allow instant response by the gas generators to currently fed from Aliso Canyon. As usual, the protesters have no idea of the limitations of their alternate “solution” – in this case, fluid dynamics.

    Perhaps this is serious enough to warrant a full post if you gentlemen have any time to spare

    • MuellerB says:

      Yes, somebody violated the n-1 rule when designing the infrastructure, and now with one failure they get into trouble. All eggs in one basket, and here in the discussion renewables are “responsible” for this design flaw.

      • Greg Kaan says:

        I’m not sure it would be an issue without the high ramping requirements created by intermittent generation. That is why I posed it as a question.

        There was an issue with power to railways in South Australia recently that some blamed solely on wind generation. My analysis pointed towards operator error at one of the fossil fuel plants so I am not grinding an axe.

    • Thanks for the links Greg. They look very interesting – certainly worth a post. However, to write one that isn’t just a rehash of what the report says I would need some grid generation data from LADWP. Do you know where I can get some?

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