The wholesale/spot electricity market is a scary place, as some people in Texas discovered last year [1]
Time of use pricing tranches are designed to insulate consumers from that sort of variability, while also incentivizing consumers to minimize consumption during peak demand times.
Time-of-use electricity pricing has been happening in California for a long time, but only now is it becoming mandatory (there are still many households out there on legacy flat-rate plans, although they are being moved).
Many parts of the country are just now introducing time-of-use pricing. As both the grid and loads become smarter and more resilient, we'll see consumer electricity rates reflect the underlying wholesale price variability even more, but probably never completely.
1. https://www.nytimes.com/2021/02/20/us/texas-storm-electric-b...
volatility could easily drive you crazy here.
PGE explains this for retail customers right here: https://www.pge.com/en_US/residential/solar-and-vehicles/gre...
The various rate schedules for the different NEM interconnections are also published and easily found. e.g. for NEM2 - https://www.pge.com/en_US/for-our-business-partners/intercon... (the actual tariff is on the pdf link on the right hand side - https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED...). Each rate will have some text like this which describes what the rate is.
> All rates charged under this schedule will be in accordance with the eligible customer-generator’s PG&E otherwise-applicable metered rate schedule (OAS).
So if you are a PGE customer on the E-TOU-C rate schedule, NEM2 (roughly) credits your excess generation under that schedule. Part of this should hopefully move new home-owners to either install batteries or if that is cost prohibitive, install west-facing panels.
The article also completely ignores the concept that distributed generation can actually reduce infrastructure needs. If you're generating the power at the "last mile" and sending it to your neighbor, that power doesn't travel through a substation, it doesn't travel through long transmission lines that need to be maintained, it's just generated (roughly) where it needs to be, saving you a lot of infrastructure. So it certainly seems "fair" to offset that infrastructure cost at least somewhat - you are providing value to the utility in terms of infrastructure they don't have to build themselves. And they sell that power that you feed back to customers paying for "green energy" at a premium as well.
(note that despite regular peaks occurring later in the day, annual peaks almost always occur during periods of high solar production - it is aircon during summer heatwaves that blows the grid, not cooking dinner. So you are delivering huge value in terms of peaker plants that don't have to be built to run a few days a year during those heatwaves.)
I don't live in California but in 2020 we had heat waves and my local power company blew up 2 substations in my area from the load. That wouldn't have happened with more distributed power generation, solar production is at its peak precisely during those heatwaves that strain the grid so badly, but the utilities were actually making a big push at the time for net metering to be abolished and solar production to be reduced.
And of course we still pay incredibly high transmission costs - we have 8-9c per kWh electricity but my transmission and delivery charges are approximately 12-14c, for a normal suburban area (I'm not out in the boonies), so obviously that money isn't making it into the infrastructure where it needs to be anyway.
(Compounding this issue, of course, is that there are plenty of people who are out in the middle of nowhere, and I'm sure a good chunk of that cost is going to subsidizing them. If we want to talk about market distortions and ignore the greater social good - how about we move away from these hidden subsidies to people living in the middle of nowhere? Make them pay the actual costs of their roads and electric and other services.)
Big picture it's hard to see the pushback against net metering as being anything other than rent-seeking by an entrenched industry. They're charging huge delivery fees and not maintaining the grid, and they're pushing back against remedies literally at the same time as their infrastructure is failing. They're paying you nothing for electricity fed back into the grid, while charging other customers a premium for "green" electricity. Pick a side, it's either valuable or it's not.
This is true if you're not connected to the grid. However if you use power on those cold winter cloudy days you need all that infrastructure still. The difference is when you used the grid's power every day that cost was spread over the year. If you only use grid power 20 days a year that grid infrastructure is very inefficient and costly.
Net metering is an anachronism. You should pay and receive the current spot price which is near zero on Spring/Fall sunny days and super high in Summer evenings and Winter nights.
Cold winter days don't represent peak consumption for the grid, there is no capacity being built specifically for cold winter days. In contrast there is capacity being built to offset everyone turning on the A/C during summer heatwaves, and solar has high power output during those periods.
Your argument is specifically called out as being a misuse of the "duck curve" concept.
> Common misconceptions
> One misconception related to the duck curve is that solar photovoltaic power does not help supply peak demand and therefore cannot replace other power plants. For example, in California, solar output is low at 7 pm when daily demand usually peaks.[19] This fact leads some to believe that solar power cannot reduce the need for other power plants, as they will still be needed at 7 pm when solar power output is low. However, California's annual demand peaks usually occur around 3 pm to 5 pm,[20] when solar power output is still substantial.[19] The reason that California's annual peak tends to be earlier than the daily peak is that California's annual peak usually occurs on hot days with large air conditioning loads, which tend to run more during midday.[21] As a result, solar power does in fact help supply peak demand and therefore can substitute for other sources of power.
https://www.caiso.com/todaysoutlook/pages/supply.html is pretty good for total energy used and sources. In the Summer 3-5pm could be demand peak, but looks like the total energy used is high over a few hours, even after sun down.
That might be true in California, but in Europe that's where the peak demand was before AC got popular. And it can easily go back to that with the spread of heat pumps.
And actual usage of that capital often has peak usage much more extreme than a typical 90/10 rule, meaning that the vast majority of that fixed cost is mostly unused.
The key to decreasing that peak is the distributed storage that's paired with distributed solar. It allows massive amounts of cost savings, despite needing to beef up the distribution side of the grid for this to work.
Utilities are gonna charge you 25c a kWh extra for peak demand delivery, and then be paying the actual people delivering it like 1c a kWh, you can book it.
I think that's kind of backwards of what we really need in the long run, though. With renewable energy, supply is variable and a large, well-connected grid is what you need to even out supply and demand. (An extreme form of this would be transcontinental HVCD lines so solar farms on the day side of the Earth can sell to customers on the night side.)
It's nice to have local power generation to keep some/most of the load off the grid in the average case, but I still think that it's important to have a grid that can handle high load during unusual circumstances. (And our use of electricity is just going to keep going up, especially as ICE vehicles are replaced by EVs. This is a good thing, but it requires more infrastructure.)
New plans are all time-of-use rated, meaning that you can only swap kWh within the same time of use band. At least, that's how it's been explained to me, I have not yet been able to find any explicit rules on PG&E's site explaining how time of use and net metering interact. (And for that matter, PG&E goes to nearly excessive length to avoid describing how anything works, what the actual rates and charges are, or generally putting the most useless pablum on their website.)
I think that all of these market designs and pricing schemes need to be made with an eye on getting to the lowest cost zero-carbon grid. Current best models are coming from Christopher Clack at Vibrant Clean Energy, and all his modeling shows that if we deploy lots of distributed solar and storage at meters, and upgrade distribution, we end up saving massive amounts of money over the decades. The reason is that by having distributed solar and storage, you can massively reduce other fixed cost parts of the grid as they age out.
So really we need net metering policy that encourages that sort of capital investments today, and not just in the wealthiest neighborhoods that have good credit scores or $20k to spend on home improvement on homes occupied by owners, but all over the grid, including rentals.
That's going to take not only good net metering policy, but also new innovation in financing and entrepreneurship. Figuring out how to convince landlords to let you install solar and storage all over, and integrating that into a virtual power plant is a nut that somebody needs to crack. Maybe it won't be entrepreneurs, maybe it will be cities making municipal Virtual Power Plants to meet their own ambitious climate goals. But there are a few key pieces missing from the best possible, most economical efficient, energy transition. And if we just let the utilities dictate policy, we will not be getting anything like the most economically efficient grid, we will get grids where they can make maximum profit.