If few people use net metering it's kind of fair. Your solar installation generates electricity, any excess gets delivered to your neighbors. The electricity is providing the infrastructure for that without making any money on that specific transaction (it gets deducted from your meter and added to your neighbors' meter), but that's easy enough to account for in base fees.
The issues start if too many people do net metering. Imagine everyone has a solar roof and reaches net-zero electricity. You can still maintain the infrastructure with base fees, but the electricity company still has to run power plants in the morning and evening when demand outstrips solar supply, and for baseload in the night. And during the day there's now an oversupply of electricity that they somehow have to sell.
In commercial electricity generation many countries have a kind of spot market for electricity, where prices are determined by demand (down to the minute) and available supply. Prices can go close to zero if lots of solar and wind capacity is available, or far above the price charged to consumer for capacity to cover the evening peak. If we changed consumer prices to more accurately reflected this "true" market price (plus markup for the grid operator), with prices changing by the minute, net metering would be pretty fair. But so far there's little desire to dump all that complexity on regular consumers.
> You can still maintain the infrastructure with base fees
In theory yes, but the grid has not used properly scoped base fees to pay for infrastructure. Delivery costs of power are more than half the total cost; to get to a base+generation model, you'd probably see monthly connection fees for Electricity in the $100+ range for many Americans.
If a customer is permitted to buy as much electricity as they want at a fixed price while also being able to sell as much as they can at a different time at a fixed price, it seems like there's an obvious subsidy happening anytime they sell electricity at other than when the wholesale price is the highest or buy other than when the wholesale price is lowest. (In areas with an excess of solar generation capacity, these distortions become quite large.)
(I'm still all for these subsidies on the balance of factors; we just shouldn't pretend that they're not subsidies.)
wongarsu|2 years ago
The issues start if too many people do net metering. Imagine everyone has a solar roof and reaches net-zero electricity. You can still maintain the infrastructure with base fees, but the electricity company still has to run power plants in the morning and evening when demand outstrips solar supply, and for baseload in the night. And during the day there's now an oversupply of electricity that they somehow have to sell.
In commercial electricity generation many countries have a kind of spot market for electricity, where prices are determined by demand (down to the minute) and available supply. Prices can go close to zero if lots of solar and wind capacity is available, or far above the price charged to consumer for capacity to cover the evening peak. If we changed consumer prices to more accurately reflected this "true" market price (plus markup for the grid operator), with prices changing by the minute, net metering would be pretty fair. But so far there's little desire to dump all that complexity on regular consumers.
secabeen|2 years ago
In theory yes, but the grid has not used properly scoped base fees to pay for infrastructure. Delivery costs of power are more than half the total cost; to get to a base+generation model, you'd probably see monthly connection fees for Electricity in the $100+ range for many Americans.
Jochim|2 years ago
Negative prices aren't uncommon during quiet periods in the summer.
sokoloff|2 years ago
If a customer is permitted to buy as much electricity as they want at a fixed price while also being able to sell as much as they can at a different time at a fixed price, it seems like there's an obvious subsidy happening anytime they sell electricity at other than when the wholesale price is the highest or buy other than when the wholesale price is lowest. (In areas with an excess of solar generation capacity, these distortions become quite large.)
(I'm still all for these subsidies on the balance of factors; we just shouldn't pretend that they're not subsidies.)
PaulDavisThe1st|2 years ago
And if the grid itself is saturated, that means it isn't big enough.