Net- Metering is a specific utility term used to describe the way utilities may allow small home generators to feed electricity back onto their electric distribution wire grids.
The DSIRE database, (Data base of State Incentives for Renewable & Efficiency) lists each state’s renewable programs. They define net- metering like this:
“Net Metering Rules For those consumers who have their own electricity generating units, net metering allows for the flow of electricity both to and from the customer through a single, bi-directional meter. With net metering, during times when the customer's generation exceeds his or her use, electricity from the customer to the utility offsets electricity consumed at another time. In effect, the customer is using the excess generation to offset electricity that would have been purchased at the retail rate. Under most state rules, residential, commercial, and industrial customers are eligible for net metering, but some states restrict eligibility to particular customer classes.”
This is a widely accepted definition but gets confused by some utility programs that don’t really offer net-metering. Instead they offer wholesale or avoided cost metering. This often requires two meters installed at the customer’s expense. One meter records the kWh flowing into their house from the utility grid and the other meter records the flow of electricity from the home’s power generation sources like a PV array or small wind turbine. The market drives the cost of electricity just like it does other commodities and the price we all pay on our electric bill reflects market value as well as actual costs for delivery. In the case of small alternate energy generators, utilities typically pay a wholesale rate for any energy that they buy directly.
One myth that is often used to oppose net-metering is the myth that meters go forward more accurately than they go backwards. Eletromechanical meters have no physical reason to run any differently more or less accurately no matter which way the current is going. Yet, this is the reason that many utilities require two meters. Two meters doubles your minimum monthly service charge and throws an un-necessary obstacle into the net-metering road.
Utilities that offer true net-metering, allow one meter that goes both directions. With this arrangement, consumer’s gain by having any energy that they generate going back to cancel the incoming kWh hours.
Once the meter hits zero on the register the price changes. Now you are making a net contribution to the grid instead of just canceling out your utility company generated power. So, the price you make on each kWh goes down to the wholesale rate which is typically 40 to 60 percent less than the retail rate. So, if you are going to run payback numbers for your project, you need to find out the average retail rate per kWh when you calculate the financial benefits of installing your own net-metering equipment.
Safety has always been very important to electric utilities and rightfully so. You can’t make any mistakes handling 14,000 volts of electricity without serious – usually fatal consequences. So, may utilities require a long list of lock out safety requirements and a hefty insurance liability policy from homeowners interested in installing net metering equipment.
Some utilities require a physical lock out device accessible to utility personnel; all day every day so that they can isolate your system from the grid while they are working on distribution circuits effected by your system.
I heard a good talk several years ago by a knowledgeable engineer about the potential danger from net-metering facilities. He seemed to think that the likely hood of a 12 or 24 volt 1.5 to 3.0KW net-metering system back feeding enough voltage to injury a line worker was a remote possibility and said it really was not scientifically supportable. Yet many utilities still persist in adding this substantial obstacle to net- metering installations from home owners.
Today, there are several alternate energy system inverters that take care of most of the legitimate interconnection and safety issues raised by utility regulations.
The main problem with net metering relates to the way you get billed for electricity. In most locations there are two parts to your bill. One part is a kWh charge that is supposed to cover all of the costs of getting each kWh to your house from the generation facility. The other part of your bill has a fixed minimum monthly charge or availability of service fee that is supposed to cover those expenses that a distribution utility incurs whether you use any electricity or not. If you leave town and throw your main breaker to the off position, you will not use any kWh. But, your meter is still sitting there ready for action and the wires coming to your house are still in the air or under the ground waiting for something to do and the utility company still needs to send a meter reader or use software to read your meter remotely just in case you use some juice that month. These fixed costs, like property taxes, accounting expenses and administrative expenses continue whether you use electricity or not. Also these expenses are often so high that utilities bundle a portion of the fixed expense into your kWh charge. So, if you are a net-metering customer whose meter hits zero or generates a lot of your own power that displaces the utility grid power , you are cutting into their revenue, without making a meaningful contribution to cutting the costs for buying power during the night and on cloudy days.
What may change utility attitudes toward net-metering is the growing need for additional generation resources and the clamor over fossil fuel generation. Utility executives maybe looking for net-metering resources to fill in peak daytime loads when the sun is shining, thus taking some of the pressure off financing new fossil fuel resources.
Do you have a question about how your electricity gets to your house? Ask me. I'll try to find out? GOt any other questions about electric energy generation? Ask me. I'll get some answers.
Thursday, January 31, 2008
Wednesday, January 23, 2008
Alternate Electric Generation Systems need Facts
It happened again Saturday. I was in a room of about thirty people eager to hear about the Sierra Club’s Cool Cities program. These thirty people appeared to be well educated. We were all certainly well feed because the meeting was at an Irish Pub. I thought about speaking up. Maybe it was the pint of Guinness. Maybe it was the weekend. At any rate, I bit my tongue and sat on my hands to avoid climbing on my soap box and alienating the few remaining friends I have.
Well meaning speakers got on the subject of net metering, wind power and hydro-electric energy generation. They were making the kind of statements that make uneducated crowds cheer and utility executives barf.
Here are some of the comments. “We have wind resources that should be used to replace dirty coal fired power plants”. “Solar energy systems are available that can be built into your house and power your home without the need for dirty coal fired power plants”.
Man, if it were only that simple.
Yes, there are wind resources throughout the United States that could be developed to provide power into the grid. Yes, there are integrated solar photo-voltaic systems that can be built into your house to provide clean energy. Yes, there are low head and small hydro-electric opportunities across the USA that contribute power to the nationwide electric grid. These things exist today and people are actually doing them, but there is more to the story. I believe that blindly repeating these cheer leader statements creates a climate of distrust between utilities and consumers that destroys the working relationships needed to really solve our electric energy problems.
The future of all of these technologies is exiting and optimistic. Yet, there are some very valid reasons that utilities might balk at massive expenditures to bring these technologies into the system today.
Wind Power- Wind power has seen exponential growth in construction and development, but it is still a small portion of the generating resource that keeps all of our lights on. In many areas the wind blows hard enough to get your attention but not hard enough to make a financially viable resource. The obvious limitation is that we expect electricity all the time, but the wind doesn’t blow all the time even in the Dakotas. Yes, some day there may be enough wind generation equipment well connected and spread out over a big enough area that system managers can “schedule” reliable power to load centers (like your neighborhood). Today however, utilities know that you will not wait to have electricity until the wind is blowing. This means that while wind can make a growing contribution to the grid, utilities feel that they must have base load reliable power generation that they can schedule to meet your power needs. So now, they are building and paying for wind facilities and coal fired facilities at the same time. This is part of the reason that generation utilities grimace in a crowd that’s screaming for more wind power. The other limitation to wind power is that people don’t usually like to live in a good wind resource area. While Chicago may be an exception, wind resources aren’t located near major population centers. So now we are talking major transmission facility construction and the people that are usually pro- wind, seem to be Not in My Back Yard (NIMBYS) when it comes to building transmission systems. Studying your wind resource for a full 12 months is the only way to find out what the wind power potential is for your site. You can get a rough idea about wind resources national wide from the National Renewable Energy Laboratory (NREL).
Solar Power-New developments in thin film construction for solar panels promise to make collectors that will turn 50 percent of the light that hits them into power instead of the 10 to 25 percent efficiency of panels in service today. Today you can buy solar roofing materials that do double duty. These new products have been commercially available for years and protect your roof like shingles while making electricity at the same time. Thousands of homes across the nation are using solar panels called photo-voltaic systems to power their homes. So why not just go solar now? -Two reasons. First they aren’t going to power my home unless I make major (read expensive) changes to my home’s building envelope (walls, attic insulation, windows) and appliances (refrigerator, well pump, stock tank heater, etc). Second, no one wants to be in the dark when the sun goes down, so making central station solar generation, puts us in the dark just when we get home and want the power. The exception to that is business and air conditioning loads. Here again we run into a “disconnect” between wishful thinking and reality. A simple Photo voltaic system with controls and equipment will set you back $10,000 to $20,000 for a modest system capable of generating 1.5 KW (kilo-Watts) and every five to seven years you get to replace batteries at about $4- 5 K a wack. When I go through my house and add up the load demands my appliances and equipment require, I’m in trouble and I’ll bet your home and business is in the same situation. It takes a very large and very expensive system to supply the 500 kWh per month average energy demand of homes in the USA. If you are serious about going solar you have to get a copy of the Real Goods Source book. It’s a product catalogue and a how to manual rolled into one book.
Hydroelectric power- Big dams have gotten a lot of bad press lately. Never mind that customers in big dam areas have some of the lowest power bills in the nation. Big dams create a host of other environmental problems that have their own opponents. Small hydro facilities in the 500 KW range are springing up nation-wide MARK FIND OUT FACTS. These facilities have real potential to contribute to the electric grid in regions that have the resource. So why aren’t utilities knocking down the doors to license and build these facilities? Well, there are two reasons, licensing and building. Each permit to build generation equipment requires a long drawn out battle because of all of the conflicting issues. Why go through multiple battles 500 to 1000 KW at a time when you can fight one 100 or 500 Megawatt battle and build the facility closer to the load demanding the power?
Even the smallest hydroelectric system can use more water and more water fall than you think. If you think you have a small hydroelectric resource you must do the research and study of your water resource to find out the potential to make electricity. The Real goods catalogue can help, but other hydroelectric education resources are available.
So, there you have it. I know it’s confusing. I know that in one sentence I sound like a democrat and the next sounds more republican. I had one women read my stuff and get real confused about which side I was on, and that is the problem today. It seems we have to pick sides and one side is for dirty coal and the other side is for clean renewable energy. The truth is both sides want electricity 24 hours a day 7 days a week. Utilities are mandated by law to do two things. First they have to supply the amount of power you want when you want it. Second, they have to do it at the least possible expense. If that wasn’t hard enough, they have to get permits and design approval ten years before you want the power. No wonder some of those executives are cranky.
My next blog will explain why most utility executives hate net-metering.
Well meaning speakers got on the subject of net metering, wind power and hydro-electric energy generation. They were making the kind of statements that make uneducated crowds cheer and utility executives barf.
Here are some of the comments. “We have wind resources that should be used to replace dirty coal fired power plants”. “Solar energy systems are available that can be built into your house and power your home without the need for dirty coal fired power plants”.
Man, if it were only that simple.
Yes, there are wind resources throughout the United States that could be developed to provide power into the grid. Yes, there are integrated solar photo-voltaic systems that can be built into your house to provide clean energy. Yes, there are low head and small hydro-electric opportunities across the USA that contribute power to the nationwide electric grid. These things exist today and people are actually doing them, but there is more to the story. I believe that blindly repeating these cheer leader statements creates a climate of distrust between utilities and consumers that destroys the working relationships needed to really solve our electric energy problems.
The future of all of these technologies is exiting and optimistic. Yet, there are some very valid reasons that utilities might balk at massive expenditures to bring these technologies into the system today.
Wind Power- Wind power has seen exponential growth in construction and development, but it is still a small portion of the generating resource that keeps all of our lights on. In many areas the wind blows hard enough to get your attention but not hard enough to make a financially viable resource. The obvious limitation is that we expect electricity all the time, but the wind doesn’t blow all the time even in the Dakotas. Yes, some day there may be enough wind generation equipment well connected and spread out over a big enough area that system managers can “schedule” reliable power to load centers (like your neighborhood). Today however, utilities know that you will not wait to have electricity until the wind is blowing. This means that while wind can make a growing contribution to the grid, utilities feel that they must have base load reliable power generation that they can schedule to meet your power needs. So now, they are building and paying for wind facilities and coal fired facilities at the same time. This is part of the reason that generation utilities grimace in a crowd that’s screaming for more wind power. The other limitation to wind power is that people don’t usually like to live in a good wind resource area. While Chicago may be an exception, wind resources aren’t located near major population centers. So now we are talking major transmission facility construction and the people that are usually pro- wind, seem to be Not in My Back Yard (NIMBYS) when it comes to building transmission systems. Studying your wind resource for a full 12 months is the only way to find out what the wind power potential is for your site. You can get a rough idea about wind resources national wide from the National Renewable Energy Laboratory (NREL).
Solar Power-New developments in thin film construction for solar panels promise to make collectors that will turn 50 percent of the light that hits them into power instead of the 10 to 25 percent efficiency of panels in service today. Today you can buy solar roofing materials that do double duty. These new products have been commercially available for years and protect your roof like shingles while making electricity at the same time. Thousands of homes across the nation are using solar panels called photo-voltaic systems to power their homes. So why not just go solar now? -Two reasons. First they aren’t going to power my home unless I make major (read expensive) changes to my home’s building envelope (walls, attic insulation, windows) and appliances (refrigerator, well pump, stock tank heater, etc). Second, no one wants to be in the dark when the sun goes down, so making central station solar generation, puts us in the dark just when we get home and want the power. The exception to that is business and air conditioning loads. Here again we run into a “disconnect” between wishful thinking and reality. A simple Photo voltaic system with controls and equipment will set you back $10,000 to $20,000 for a modest system capable of generating 1.5 KW (kilo-Watts) and every five to seven years you get to replace batteries at about $4- 5 K a wack. When I go through my house and add up the load demands my appliances and equipment require, I’m in trouble and I’ll bet your home and business is in the same situation. It takes a very large and very expensive system to supply the 500 kWh per month average energy demand of homes in the USA. If you are serious about going solar you have to get a copy of the Real Goods Source book. It’s a product catalogue and a how to manual rolled into one book.
Hydroelectric power- Big dams have gotten a lot of bad press lately. Never mind that customers in big dam areas have some of the lowest power bills in the nation. Big dams create a host of other environmental problems that have their own opponents. Small hydro facilities in the 500 KW range are springing up nation-wide MARK FIND OUT FACTS. These facilities have real potential to contribute to the electric grid in regions that have the resource. So why aren’t utilities knocking down the doors to license and build these facilities? Well, there are two reasons, licensing and building. Each permit to build generation equipment requires a long drawn out battle because of all of the conflicting issues. Why go through multiple battles 500 to 1000 KW at a time when you can fight one 100 or 500 Megawatt battle and build the facility closer to the load demanding the power?
Even the smallest hydroelectric system can use more water and more water fall than you think. If you think you have a small hydroelectric resource you must do the research and study of your water resource to find out the potential to make electricity. The Real goods catalogue can help, but other hydroelectric education resources are available.
So, there you have it. I know it’s confusing. I know that in one sentence I sound like a democrat and the next sounds more republican. I had one women read my stuff and get real confused about which side I was on, and that is the problem today. It seems we have to pick sides and one side is for dirty coal and the other side is for clean renewable energy. The truth is both sides want electricity 24 hours a day 7 days a week. Utilities are mandated by law to do two things. First they have to supply the amount of power you want when you want it. Second, they have to do it at the least possible expense. If that wasn’t hard enough, they have to get permits and design approval ten years before you want the power. No wonder some of those executives are cranky.
My next blog will explain why most utility executives hate net-metering.
Tuesday, January 15, 2008
The Death of the Electric Utility Industry- Part Two
So, here is the scenario for the demise of central station electricity power grids. Many of the key elements are already visible. First you have climbing electric rates. Today, no one is predicting a decrease in electric rates. In fact no one is predicting stabilization of electric rates in the near future.
Next as central station power production rates climb, costs for alternative power systems keep going down. Innovations in wind turbine design, solar photo-voltaic output and other alternate electricity systems continue to drive down the costs of delivering power to your house from these choices. And, the majority of these systems are designed to work right at your house. No more buried cable or over head power lines for residential development. Bye Bye wires companies. No more distribution meters on homes for local distribution companies, adios distribution companies.
Of course this isn’t going to happen tomorrow, but the trends are there. Today the driving expense for wholesale power costs are power plants and transmission grids. These two features of the electric utility industry are also the most damaging to the environment. Witness the reduction in the number of proposed coal fired power plants as investors and consumer re-evaluate their roles in a climate change environment. Take away the residential load and what happens? Poof, now all that’s left is business and industrial loads.
Here too the trend is moving to disbursed generation facilities. Part of this movement is to improve reliability and part is a direct response to increasing rates and the lack of control that businesses feel over electric utility rate increases. The Y2K scare drove many industries to set up back up power systems that were under their control, just in case. So, many facilities have already done some of the planning to be grid free.
What can you do about all of this. Get informed. Find out how solar and wind might work at your house. Use existing tools to calculate what it would take for you to get off the grid. Even if you choose not to make the plunge, like me, you will at least understand your energy appetite and be able to have some control over your own climate change emissions. Here are some sites to get you started with your quest.
For innovations in wind energy see- http://www.getsmartenergy.com/
For help sizing your photovoltaic system see- http://www.realgoodssolar.com/
For help reducing your home energy use see- http://www.epa.gov/cleanenergy/energy-and-you/reduce.html
I like electric utilities, really I do. I’m not ready to do this stuff by myself. I want a team of lineman ready to help get the lights back on after a storm. I want an office of skilled engineers designing a safe and reliable system to keep my home running. What I don’t want is an industry wide arrogance about individual energy choices that assumes central station power generation is the only economical way to go. That may be true today, but tomorrow will be here sooner than many utility executives can imagine.
Next as central station power production rates climb, costs for alternative power systems keep going down. Innovations in wind turbine design, solar photo-voltaic output and other alternate electricity systems continue to drive down the costs of delivering power to your house from these choices. And, the majority of these systems are designed to work right at your house. No more buried cable or over head power lines for residential development. Bye Bye wires companies. No more distribution meters on homes for local distribution companies, adios distribution companies.
Of course this isn’t going to happen tomorrow, but the trends are there. Today the driving expense for wholesale power costs are power plants and transmission grids. These two features of the electric utility industry are also the most damaging to the environment. Witness the reduction in the number of proposed coal fired power plants as investors and consumer re-evaluate their roles in a climate change environment. Take away the residential load and what happens? Poof, now all that’s left is business and industrial loads.
Here too the trend is moving to disbursed generation facilities. Part of this movement is to improve reliability and part is a direct response to increasing rates and the lack of control that businesses feel over electric utility rate increases. The Y2K scare drove many industries to set up back up power systems that were under their control, just in case. So, many facilities have already done some of the planning to be grid free.
What can you do about all of this. Get informed. Find out how solar and wind might work at your house. Use existing tools to calculate what it would take for you to get off the grid. Even if you choose not to make the plunge, like me, you will at least understand your energy appetite and be able to have some control over your own climate change emissions. Here are some sites to get you started with your quest.
For innovations in wind energy see- http://www.getsmartenergy.com/
For help sizing your photovoltaic system see- http://www.realgoodssolar.com/
For help reducing your home energy use see- http://www.epa.gov/cleanenergy/energy-and-you/reduce.html
I like electric utilities, really I do. I’m not ready to do this stuff by myself. I want a team of lineman ready to help get the lights back on after a storm. I want an office of skilled engineers designing a safe and reliable system to keep my home running. What I don’t want is an industry wide arrogance about individual energy choices that assumes central station power generation is the only economical way to go. That may be true today, but tomorrow will be here sooner than many utility executives can imagine.
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