Florida Power & Light : Customer had to pay more for energy because of Home Solar

[rpenoyer]

Hi everyone, I am new to the whole solar world, and I have been lurking in this forum occasionally, but to be honest, I am not the on-line discussion type typically. So, please be gentle with me here.

This past weekend an article ran in our local paper (In north east Florida), where the president of Florida Power & Light was quoted as saying "The customers pay more for their electricity because they have to pay for that." He was referring to the cost the power company has to burden for buying overproduction power back from "rooftop producers." He goes on to say "I have no problem with anybody putting solar on their roof. What I have a problem with is the rest of our customers who can't afford it or don't want it...it isn't fair. It should be whatever the cost is. I don't think it should be subsidized by the rest of the customers who choose not to do it."

Personally, I am very angry! My cost to produce 1kWh is $4.50 (equipment and installation amortized over a 20 year expected life). FPL buys power from me at $0.085/kWh. Of that, 1/3 is for fossile fuel costs, and on top of an service and storm charge.

Please, help me here, what am I missing? Is the president of FPL right? Is my solar array costing my neighbors?

[DanKegel]

Is my solar array costing my neighbors?

I think the answer depends on whether you think climate change caused by co2 emissions (aka AGW) is an urgent problem.

Observers who don't think AGW is a real issue might say "Society doesn't benefit from utilities investing in solar energy. Oil and gas are cheaper, let's just keep burning those. Utilities should not lift a finger to encourage solar energy."

Observers who do think AGW is a real issue might say "The neighbors who continue to emit CO2 are costing everybody more than solar is costing the neighbors. In fact, holy ****, we've all got to stop burning oil and gas RIGHT NOW. How can we speed up the transition to solar/wind/nuclear/etc?"

Because the world is polarized between these two camps, you're going to get a range of very different answers, some quite angry.

Hope that helps!
- Dan

[lkruper]

Hi everyone, I am new to the whole solar world, and I have been lurking in this forum occasionally, but to be honest, I am not the on-line discussion type typically. So, please be gentle with me here.

This past weekend an article ran in our local paper (In north east Florida), where the president of Florida Power & Light was quoted as saying "The customers pay more for their electricity because they have to pay for that." He was referring to the cost the power company has to burden for buying overproduction power back from "rooftop producers." He goes on to say "I have no problem with anybody putting solar on their roof. What I have a problem with is the rest of our customers who can't afford it or don't want it...it isn't fair. It should be whatever the cost is. I don't think it should be subsidized by the rest of the customers who choose not to do it."

Personally, I am very angry! My cost to produce 1kWh is $4.50 (equipment and installation amortized over a 20 year expected life). FPL buys power from me at $0.085/kWh. Of that, 1/3 is for fossile fuel costs, and on top of an service and storm charge.

Please, help me here, what am I missing? Is the president of FPL right? Is my solar array costing my neighbors?

The answer to that question has nothing to do with your cost to produce. The question is, how much does it cost FPL to produce the power that they buy from you? Is it less than they pay you, then yes, your neighbors are subsidizing you. That is the way I see it, but I am willing to consider other viewpoints.

[rpenoyer]

Thanks Dan! I think that is an excellent analysis. Personally, I don't even engage in the environmental impact issue, not with vehemence at least. To me, the simple fact that enough power hits the Earth from the Sun to meet our needs is justification enough. Why not use a resource that is readily available and abundant? Economically it just makes sense. Yeah, the cost per kWh argument is there, for now, but it dimishes over time.

[lkruper]

Thanks Dan! I think that is an excellent analysis. Personally, I don't even engage in the environmental impact issue, not with vehemence at least. To me, the simple fact that enough power hits the Earth from the Sun to meet our needs is justification enough. Why not use a resource that is readily available and abundant? Economically it just makes sense. Yeah, the cost per kWh argument is there, for now, but it dimishes over time.

I did not understand a word of what Dan said. Could you explain it to me?

[rpenoyer]

The answer to that question has nothing to do with your cost to produce. The question is, how much does it cost FPL to produce the power that they buy from you? Is it less than they pay you, then yes, your neighbors are subsidizing you. That is the way I see it, but I am willing to consider other viewpoints.

As you point out, this discussion is entirely about FPL's cost to produce energy, their "raw" cost if you will, not the retail cost charged/credited. I get that.

The argument that Dan makes is based on an answer to this question, "Is there a cost to climate change caused by co2 emissions?"

If the answer to Dan's question is "Yes," then that cost has to be included in the "raw" FPL cost. If you think the answer to Dan's question is "no," then we are just talking about the FPL "raw" cost.

In either case, I as the independent producer:
1. Pay all the same "maintenance" surcharges as any other customer
2. Sell my power at the cost for the production including the fuel surcharges

The way I look at it is, I do not produce even 50% of my power consumption needs. I always buy power from FPL. Since I buy my power at the same rate I sell it, I in effect, only impact on my neighbors is I use them as a communal battery for a short period of time.

[Mike90250]

Up to a small percentage of installed homeowner roof top solar, (less than 5%) in a neighborhood, it's mostly just an accounting expense to the utility, and the cost to come out and do an initial inspection and install a 2 way meter. Excess power you produce, is power they don't have to ship to your neighborhood.

But, the minute subsidies or "shared expenses" happen, and your neighbors get a charge for your installing solar, or you get a tax cut, and they have to pay more to cover what you don't pay, then they have a right to be upset at you.

[DanKegel]

Thanks for explaining my explanation

in effect, only impact on my neighbors is I use them as a communal battery for a short period of time.

If you scale that up, it starts having a real cost. That's why states put a low cap on the number of customers eligible for net metering.

[lkruper]

As you point out, this discussion is entirely about FPL's cost to produce energy, their "raw" cost if you will, not the retail cost charged/credited. I get that.

The argument that Dan makes is based on an answer to this question, "Is there a cost to climate change caused by co2 emissions?"

If the answer to Dan's question is "Yes," then that cost has to be included in the "raw" FPL cost. If you think the answer to Dan's question is "no," then we are just talking about the FPL "raw" cost.

In either case, I as the independent producer:
1. Pay all the same "maintenance" surcharges as any other customer
2. Sell my power at the cost for the production including the fuel surcharges

The way I look at it is, I do not produce even 50% of my power consumption needs. I always buy power from FPL. Since I buy my power at the same rate I sell it, I in effect, only impact on my neighbors is I use them as a communal battery for a short period of time.

That ignores the possibility that your utility can create or buy their own clean power for less expense than they pay you. If they can, should they continue to pay more to you and pass the deficit to your neighbors?

Again, why do your neighbors care whether or not you make a profit if their bills go up as a result?

[J.P.M.]

I've never had kids, but as long as I've been a homeowner, I've paid school taxes. Is that fair ? If I had kids, say, 1, or 10, or more, my school taxes would not increase. Is that fair ? If I recycled EVERYTHING, I would still have paid for garbage collection. Is that fair ? If I'd had kids, I would have received a tax break that others, who had no kids, could say is increasing their tax burden (in ways that are not unlike the arguments used by POCOs that claim non solar uses are paying for the solar user's "freeloading" on the system). Is that fair ? PV users have access to reasonably reliable power when the sun doesn't shine, some of them (overgenerators) at no cost beyond their own free, initial choice to oversize a system. Is that fair ?

Who said anything about fair in the first place ?

The way net metering started and continues for many, a power company is, in effect, forced to buy the same product they sell, and in so doing pay the same price as they sell it for. Not a good business model and probably not sustainable.

On the other hand, I find it a bit disingenuous on the part of folks who make a big deal out of solar PV's overall small impact on the U.S. energy mix - usually some fraction of 1% depending on who's #'s you pick - sort of implying that it will never amount to more than fly crap in the energy mix, while almost in the next breath, crying the blues about the extraordinary burden all the distributed residential PV users are placing on the non solar users because of net metering. I'd wonder: How can something that small have such a dire impact on so many ? What's wrong with this picture.

Net metering is coming to an end, gradually. It may have helped the solar business to get a leg up, but may no longer be needed or beneficial. I don't believe I ever had the opinion it would last forever anyway. The party's coming to an end, or at least the door to the party seems to be closing.

Solar PV probably has beneficial attributes for society. Unfortunately, those attributes, whatever they may be, are somewhat non-quantifiable, and in any case not universally agreed upon as extant at all. To the extent that we can all agree on the worthwhileness of solar energy, the next immediate task may be to place some sort of monetary value on that societal worth.

[DanKegel]

the next immediate task may be to place some sort of monetary value on that societal worth.

How about $30/ton of avoided CO2 emissions? (/me ducks

[rpenoyer]

Interesting arguments... If net metering is coming to an end, then I guess the question becomes, what do we do with excess "privately produced" energy. In Florida, at least, it is illegal for me to sell my excess power. Only federal law stands in the way of it being routed to ground - and I would hope that everyone agrees that is not a good thing. Some states are trying to put this "Sun" tax on the bills of home solar users (and I am certain there is a thread on this board for that discussion).

In the end, my initial question was, "am I really putting a burden on my neighbors by producing solar power." It sounds to me that unless we can get people to take accountability for environmental impacts of CO2 emissions, society will agree that yes, home solar is taking more than it is giving. Wow...

[J.P.M.]

Interesting arguments... If net metering is coming to an end, then I guess the question becomes, what do we do with excess "privately produced" energy. In Florida, at least, it is illegal for me to sell my excess power. Only federal law stands in the way of it being routed to ground - and I would hope that everyone agrees that is not a good thing. Some states are trying to put this "Sun" tax on the bills of home solar users (and I am certain there is a thread on this board for that discussion).

In the end, my initial question was, "am I really putting a burden on my neighbors by producing solar power." It sounds to me that unless we can get people to take accountability for environmental impacts of CO2 emissions, society will agree that yes, home solar is taking more than it is giving. Wow...

To answer your initial question: IMO and more guess than fact, some think yes, others think no, some think it's more complicated than such a simple dichotomy can serve.

I'd guess whichever side any party comes down on, their opinion will be influenced by whatever the individual financial consequences of that opinion might be, and screw the environment and everyone in it (except them). Just sayin'.

Talking about carbon offsets or societal benefits, or other esoteric and somewhat removed and therefore somewhat irrelevant concepts - i.e., irrelevant in the day to day reality of bill paying, makes for nice conversation and jaw jacking, but seems, to me anyway, to be of little practical use or help in relating the situation to Joe & Jane 6-pack trying to pay an electric bill while not destroying the planet for their kids. I suspect they want to do both but need hard, practical discussion they can relate to, understand and use to make intelligent decisions. I'm not sure, for example, that 30 tons of CO2 is easily translated to a societal benefit/detriment.

[jflorey2]

I think the answer depends on whether you think climate change caused by co2 emissions (aka AGW) is an urgent problem.

It has nothing to do with climate change.

A utility incurs costs in providing power to people. Their pricing structure is designed to allow them to provide energy while making some money. (Usually not a lot; public utilities are scrutinized pretty carefully when it comes to rate hikes, expenses etc.) Depending on their business model their costs may include fuel, generator fees, infrastructure, insurance etc. Their income is via their tariffs.

If one guy puts solar on his roof, then not much changes from the utility's perspective. Under net metering laws they don't get as much money from him, but it's a drop in the bucket.

But let's say a developer opens a huge new housing development. Every single house has solar that will cover 100% of their use under net metering. Environmentalists celebrate. But the utility now has a problem. They have to, by law, provide electrical service to these homes. They need new transmission lines, transformers, circuit protection devices, monitors etc. They may even have to start building new generators. But they are going to make almost no money off these new homes due to the net metering laws. And in fact they may have to install MORE infrastructure than they normally would, since solar maximum power is going to be the same for all the people in that development - so power will peak all at the same time, which is worst-case from an infrastructure design standpoint.

So what do they do? They have three choices:
-Eat the loss and continue to do so until they go bankrupt. (Would take a lot of solar to do that, but we're installing a lot of solar.)
-Increase rates on people who use solar power
-Increase rates on people who don't use solar power

What's fair? Solar owners will tend to say "increase everyone else's rates; I am being virtuous!" Non-solar owners will tend to say "I didn't ask these people to install solar; why am I being fined because of their decisions?" (Actually both will say "I don't care as long as you don't raise my rates" but that's not very useful in terms of making the above decision.)

[rpenoyer]

But let's say a developer opens a huge new housing development. Every single house has solar that will cover 100% of their use under net metering. Environmentalists celebrate. But the utility now has a problem. They have to, by law, provide electrical service to these homes. They need new transmission lines, transformers, circuit protection devices, monitors etc. They may even have to start building new generators. But they are going to make almost no money off these new homes due to the net metering laws. And in fact they may have to install MORE infrastructure than they normally would, since solar maximum power is going to be the same for all the people in that development - so power will peak all at the same time, which is worst-case from an infrastructure design standpoint.

So what do they do? They have three choices:
-Eat the loss and continue to do so until they go bankrupt. (Would take a lot of solar to do that, but we're installing a lot of solar.)
-Increase rates on people who use solar power
-Increase rates on people who don't use solar power

Sorry, but at least here where I live in Florida, we are already getting hist for those infrastructure additions. Higher than average tax rates on new homes (Florida has a very strange property tax schedule), AND, an huge "impact fee" on new construction. That impact fee, if you call your county and ask what it's for, is specifically to pay your portion of infrastructure need increases. Road signage, sewer, water, and electric. So, you are missing the option of "Tax new construction." --- which is already being done.