First, my credentials, I work for a major rate regulated utility that serves the state of Iowa. Since I am not a spokesman I will not declare which one, however, I am a substation engineer, and on my floor of the building also sits the engineers who deal with distributed customer generation.
So, even here in Iowa where rooftop solar is roughly unheard of, we have several salaried engineers dedicated just to these projects full time. They comprise 25 percent of the entire system planning department. This is not a small expense, but compared to the cost of operation and maintence to the distribution system it is just peanuts. The bigger issue is how power costs are billed. Power is generated at roughly 2-3 cents per kWh on our system, and sold at various rates. Big businesses generally pay 3-5 cents per kWh for bulk power, and that price still is heavily subsidizing residential distribution. Residential rates are about 9 cents per kWh. The base connection cost on your bill does not nearly cover the cost of operations and maintenance for the distribution system. So.... As solar penetrates the market a significant portion of monies to maintain the distribution system are now gone. The way to make up for this loss is to charge distributed generating customers the real cost of connecting to the grid up front since it will not be recovered through electricity purchases. Finally, most states do a net metering on distributed generation which means that the utility is crediting at 9 cents something that is only valued at 2-3 cents per kWh.
The real solution to this issue is deregulation, and time of day rates. This would be a free market boon to small generators who could recieve something close to market spot prices on those few peak hours a year when their solar generation is coincidentally producing the most power. I suppose we can all thank FDR for this mess, as these sorts of things existed prior to his regulation of the power industry.
Just as a note for those who do not know bulk power prices can swing wildly during peak usage periods. This is because utilities are required by law to provide power at all timess if it is possible. Since most generation takes 1 hour to 1 day to bring on line this means that power prices at peak times can be hundreds or thousands of times higher than normal. So on that 105f day you might actually chose to sweat it out and slept that power to your utility at say .03x 1000 or 30 bucks per kWh rather than the normal market spot price of .03 or less per kWh. Of course I think doing this would also be a boon to solar installations as well, but that is beside the point.
Jack of all Trades
Precinct Commiteeman Precinct 5 Rock Island Co Illinois
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