We have all seen those big power plants outside cities that provide power — historically from coal, oil and nuclear and now more recently, natural gas. These utility power plants have served us well for over a century. But technology is passing them by. These old central generation power plants are obsolete. They are more expensive than power generated by wind, solar and energy storage. Even some of the newest gas peaker plants under construction are destined to be obsolete within a decade. New power generating technologies – solar, wind, battery storage, distributed energy resources, virtual power plants, etc. — are steadily improving in terms of cost, duration and reliability.
Unfortunately, commercial and residential electricity customers are saddled with the costs of existing power plants, even ones that have been installed recently. Utilities pass their costs of power generation, transmission and distribution directly to ratepayers. Moreover, utilities are guaranteed a 10% profit based on their net assets. Although they do indeed care about reliability and safety, utilities actually make more money when they own a lot of assets (higher profits) and charge high prices for power (higher revenues).
These new clean, inexpensive power generation and storage technologies are turning the utility industry upside down. Commercial and residential customers can essentially purchase their own power plants for less money than utility-provided power. Listen up to this week’s Energy Show as we review the deteriorating economics of utility-based power plants, as well as the implications these new technologies are having on consumers throughout the United States.
Great solar policy is just as important as great solar technology. Obviously we need the technologies for these products — but we also need the policies so that solar products can be cost-effectively installed. And I’m not just talking about incentives…policies related to net metering, interconnection and permitting are just as important.
Getting good solar policy requires effective political lobbying. I hate to let you down, but these great energy policies did not magically spring from the brains of inspired politicians When I look back at the successes our industry has had over the years — net metering, the California Solar Initiative, Solar Tax Credits, state incentives — all of these policies were based on sound analytical research coupled with effective lobbying.
There are a few companies that specialize in the types of analysis that’s required to put together good policies. One of the best is Cross Border Energy, based in Berkeley California. They provide clients with strategic advice, economic analysis and expert testimony on market and regulatory issues in the natural gas and electric industry. It is my pleasure to have Tom Beach, Principal Consultant of Cross Border Energy as our guest on this week’s Energy Show.
Tom has been influential on many of California’s ground breaking energy policies. He has worked on the restructuring of the states gas and electric industries, the addition of new natural gas pipelines and storage capacity, renewable energy development, and a wide range of issues concerning California’s large independent power community. I also had the pleasure of working with Tom on the California Solar Initiative many years ago. To learn more about the energy industry, real world solar economics, and Tom’s perspective on energy regulatory issues, listen up to this week’s Energy Show.
PS – the Kyocera and SMA rooftop solar system I installed for Tom back in 2003 is still working perfectly, with only 0.4% degradation over the last 15 years.
PPS – his monitoring system is intermittent since his 15 year old computer that runs the software is on its last legs.
Electric utilities got their start in the U.S. in the 1880s. Thomas Edison began transmitting DC power as he literally illuminated the world. Then George Westinghouse (with help from Nikolai Tesla) deployed a better way of delivering electricity with AC power. Both Edison and Westinghouse went on to build tremendously successful companies, aptly named General Electric and Westinghouse Electric respectively. Although dominant in the 20th century, both companies have struggled in the 21st century.
Without a doubt utilities strive to deliver reliable and affordable power all over the world. But new technologies — particularly wind, solar and battery storage — are making the conventional utility business model obsolete. Customers are able to purchase and maintain their own power plants for less money than it costs a utility to centrally generate power and transmit it to every building. There is no doubt in my mind that over the next 20 years we will transition to a network of microgrids supported by some type of intelligent power distribution system.
What we knew and (some of us) loved about conventional utilities is changing. And utilities are fighting back — hard — to maintain their power supply monopoly. So here are Ten Electric Utility Company Myths — some of which were based on fact, and some were simply PR spin.
1. Myth: Utility profits are decoupled from selling electricity
2. Myth: Solar shifts costs to disadvantage ratepayers
3. Myth: Utilities support energy efficiency, we offer rebates
4. Myth: Utilities like EVs. They get to sell a lot more electricity
5. Myth: Utilities like Solar and Battery Storage
6. Myth: Utilities are a public monopoly working for ratepayers
7. Myth: Solar reduces electricity costs
8. Myth: Safety is a utility’s #1 concern
9. Myth: public utilities are the only way to provide reliable and affordable electricity
10. Myth: Solar will disrupt the grid at high penetration levels
Listen up to this week’s Energy Show as we go into detail on each of these myths — and explain their implications on ratepayers and competing power industries.
There is no doubt in my mind that the “All Electric future” is inevitable. The only question is how fast…20 or 50 or 75 years? Electric generation and storage technology is getting cheaper, while at the same time the problems with fossils fuels keep getting worse. Many of our new construction customers at Cinnamon Energy Systems want to power their entire homes with electricity. They will not need natural gas for heating, hot water, laundry or cooking. And with EVs, they will not need gasoline for their cars. Naturally, a bigger solar array is required. And battery storage for when the grid goes down — also to maximize savings with time of use rates.
Mankind has been using fossil fuels since we started burning coal thousands of years ago. What does it mean when our homes, businesses, industries and transportation systems operate primarily from electricity instead of coal or oil or gas? In some states our political leaders are pushing for this 100% clean energy transition. The solar and wind industries will obviously benefit – as well as electric utilities which can transition to fueling our vehicles as well as powering our buildings. The coal industry — and eventually other fossil fuels — will steadily decline as their polluting product also becomes too expensive compared to wind and solar. Breakthroughs with clean coal or inexpensive nuclear are becoming less and less likely as renewable power prices continue to decline.
Enabling this transition is a steady stream of new devices and appliances that substitute electricity for fossil fuels. A few examples include heat pump hot water heaters, induction electric stoves and electric vehicles. Please Listen Up to this week’s Energy Show for more about this “All Electric future” — and what you can do now to best prepare your home and business.
What are the best solar panels? That’s a question we are asked all the time. When customers look for the “best” solar panels they consider efficiency, reliability, quality and cost. Cost and efficiency are closely related – all solar panels generate the same amount of electricity (kwh) on a per watt basis. Your appliances can’t tell the difference if they get their electrons from super-efficient panels made in the USA, or the cheapest panels made somewhere in Asia.
Nevertheless, there are clear cut differences among solar panels when it comes to aesthetics (all black panels look better), ease of installation (which effectively reduces costs) and cost per watt pricing (especially in light of the tariffs on solar cells and panels). There are also more subjective distinctions such as brand name and perceived reliability. Generally these subjective measures are not based on comparison data or independent laboratory testing, so be wary of manufacturer’s claims.
So which panels are best? Please Listen Up to this week’s Energy Show for our advice for selecting solar panels for your roof.
We’re talking about hot water this week. No — I’m not in trouble with my local utility again — just discussing the best ways to heat water for your home. Our focus is on domestic hot water (DHW). This is hot water that you use for your kitchen, bathing and laundry. In the U.S., the average home uses about 68 gallons of hot water a day, with huge variations based on the number and age of occupants in the home.
Taking a step back, I counted six basic ways that people have been heating water since humans discovered fire. Deliberate heating started with a pot on a campfire (or with hot rocks to boil water). Then we used solar thermal to heat water in a blackened container (and we are still using solar thermal systems today). Fossil fuels (coal, oil and natural gas) were then used starting in the 1800s in boilers to heat water (the latest insulated tank technologies use high efficiency condensing gas boilers). In the 1900s we started using electric heating elements in hot water tanks. Flash or pass through hot water heating systems – powered by electricity or natural gas — completely eliminate the hot water tank, thereby reducing standby losses. But the current champions for DHW efficiency are the new heat pump hot water heaters. These systems have efficiencies in excess of 200% since they extract ambient heat from surrounding air (essentially cooling the air), and use this heat to increase the water temperature. I was pleasantly surprised to see that these heat pump systems have become much more reliable and cost effective.
On this week’s Energy Show we will review each of the common technologies used to heat water to help you decide what kind of DHW heating system makes sense for you the next time your tank wears out (BTW, according to NREL the average lifespan of a hot water tank is 13 years).
We often talk about smaller solar power systems on homes or commercial buildings. On this week’s Energy Show we are discussing gigawatt-scale solar installations. The logic is simple: solar panels are getting cheaper and installation costs are declining. At the same time, utility electric prices keep increasing. When prices go up and costs go down profits can skyrocket – so it’s no surprise that there is a big market for large-scale solar installations.
When I started doing PV installations in 2001 the biggest projects were about 5 MW. Now there are several 500 MW installations proceeding in the U.S., and several 1,000+ MW (a gigawatt) installations are under way in India and China. Solar power plants in the gigawatt range are now being planned in the U.S. To put a gigawatt solar power plant in perspective, it is twice the capacity of most natural gas plants, covers about ten square miles, uses over three million solar panels, and employees thousands of people during construction.
To fill us in on the details of projects of this size, my special guests are Mark Cox and Shola Ashiru with the New Energy Fund II. Mark and Shola have been financing solar companies and projects for almost 20 years. They are currently working on a 1.2 gigawatt project which would be one of the largest systems in the world and the biggest in the U.S.
There is no doubt in my mind that Energy Storage Systems (ESS) will be as ubiquitous as solar – in all market segments. Utility companies are installing these systems to balance their intermittent demand and generation of electricity. Homeowners will install these systems for backup power and to store their daytime solar power for use at night. But for pure economic reasons, perhaps the most compelling market of all is for commercial and industrial (C&I) building operators.
Electricity bills for commercial and industrial buildings are composed of two charges: energy usage (measured in kwh) and demand charges (measured in kw). C&I customers often pay thousands of dollars a month for the peak power demand they encounter during any 15-minute period. Depending on the equipment being used in the building, these demand charges can exceed the energy usage charges. For example, a facility’s average demand may be 100 kw ($2,000 a month with a $20/kw demand charge), but for several hours a month the demand may spike up to 300 kw ($6,000 a month). An ESS that senses when these demand peaks occur – and then discharges batteries instead of drawing power from the grid – can completely eliminate these high peak demand charges.
To learn more about the economics of commercial energy storage systems — and why these systems are rapidly gaining market traction — Listen up to this week’s Energy Show on Renewable Energy World.