I sent the following letter to the Editors for the Sacramento News and Review in response to an article that they ran concerning the pros and cons of small and large solar power producing facilities. The article had a number of errors and half-truths, but I decided to focus on some of the more important ones.
The article "Solar Wars" in the June 28 issue of SN&R had some interesting points to make, but seems to have revealed some pretty strong negative biases towards small, net-metering applications for solar power. For example, when discussing the issues of cost there was a statement that desert solar costs $4 per watt, while small rooftop solar costs $8 per watt. I don't know the true cost of the desert solar, but am pretty sure that it is for the solar system only, not the cost of land, cost of significant damage to the desert ecology (far beyond just the desert tortoises), cost of transmission lines and the costs to the local communities in terms of new infrastructure needs and water use. I have read some of the environmental impact studies for these very large installations and found that very few of the external costs beyond the transmission lines have been included in the cost of mitigating the negative impacts of these systems. It is my guess that these external costs are at least as much as the direct cost, bring the bill to at least $8 per watt (probably more, but as far as I am aware, the detailed cost analysis have not been performed).
If that were the end of the story, the two approaches would be about the same with regard to dollar costs. However, I think the author used some old data for the cost of rooftop systems. I install rooftop and small ground mounted systems for between $4-$5 per watt (before rebates and incentives), depending upon the mounting details. $8 a watt would provide a very nice profit margin, but there is plenty of profit built into my rates. Therefore, the $8 per watt cost for small net-metering systems is greatly exaggerated. While I agree that it is certainly possible to purchase these kinds of systems for $8 per watt and more, but that is an inflated cost and needn't be considered in an analysis such as is presented in the article. In addition, the smaller systems do not have any significant external costs. They will work just fine on the existing grid, new transmission lines or substations are not needed. The land is already purchased and used for its original primary purposes. There is little, if any additional environmental or community impact cost.
Therefore the cost analysis should have been exactly the opposite as that which was stated in the article. Roof top installations are under $5 per watt (without including the incentives and tax breaks), while huge desert installations are over $10 per watt if the total cost of the systems are included. Obviously the smaller systems are MUCH less expensive to build and maintain.
The only reason that the cost of the huge systems is attractive is that they intend to sell the "green" power at a very high premium. I have heard rumors that this will be approximately three times the market rate for "dirty" power. The reason that this can be done is that there are government mandates for communities and public organizations to use a mandated percentage of "green" energy. Since they generally have few or no options for producing this power on their own, they are going to be forced into purchasing a significant portion of their power from "green" energy sources. This in effect creates a green energy monopoly, whereby the large solar power plants can charge what they want - and they are going to want a lot!
In California, we are rapidly getting to the point where utility companies will have met their State mandated net-metering goals. At that point, they will no longer be required by law to hook up any additional net metering systems - and they are lobbying mightily to make sure that the mandate does not get extended. They have no desire to continue adding small net-metering power because they can't charge for that power, all that they can charge for is the cost of the infrastructure. Every net metered dollar is a dollar of lost revenue to them. However, they are also required to provide sufficient power to meet the demand, and the current net metering installations add to their total effective power without costing them anything for building additional capability. So while they don't make money directly on the sales of power, they do save a substantial amount in not having to build new peaking power plants to handle the peak loads (which happily occur at almost the exact same time as the maximum solar production).
When the utilities have their own huge solar power plants they will no longer have a need for the smaller net-metering producers, and therefore they will likely stop allowing residences and small businesses to install these systems. Right now ten gargantuan solar power plants have been permitted (or are about to be permitted). Each covers approximately 20 square miles of desert and produces about a terawatt of electrical power. Many more of these huge power plants are in the permitting stages and will come on line within the next ten years if allowed to continue as they are.
The article was interesting but is heavily biased toward desert solar power plants and away from smaller net-metering installations. I would like to see a much more balanced approach to discussing the pros and cons of these systems. Personally, I see no need whatsoever for the desert power plants. In California we have more than enough existing rooftops, parking lots, shade structures, and roadways to more than produce all of the electrical power needs of the State without adding additional environmental degradations or causing a steep increase in the cost of electrical power. The only clear "pro" that I have been able to determine for the large desert installations is that a few very rich corporations are going to get even richer. By the way, the majority of the desert installations are going to be installed, owned and operated by foreign corporations, with the bulk of the profits going to those other countries, not to the United States. They are not going to be owned and operated by local (within the State) corporations, or even corporations within the United States. It is interesting to check out where the contractors are located, and the nationality of the owners.
If that were the end of the story, the two approaches would be about the same with regard to dollar costs. However, I think the author used some old data for the cost of rooftop systems. I install rooftop and small ground mounted systems for between $4-$5 per watt (before rebates and incentives), depending upon the mounting details. $8 a watt would provide a very nice profit margin, but there is plenty of profit built into my rates. Therefore, the $8 per watt cost for small net-metering systems is greatly exaggerated. While I agree that it is certainly possible to purchase these kinds of systems for $8 per watt and more, but that is an inflated cost and needn't be considered in an analysis such as is presented in the article. In addition, the smaller systems do not have any significant external costs. They will work just fine on the existing grid, new transmission lines or substations are not needed. The land is already purchased and used for its original primary purposes. There is little, if any additional environmental or community impact cost.
Therefore the cost analysis should have been exactly the opposite as that which was stated in the article. Roof top installations are under $5 per watt (without including the incentives and tax breaks), while huge desert installations are over $10 per watt if the total cost of the systems are included. Obviously the smaller systems are MUCH less expensive to build and maintain.
The only reason that the cost of the huge systems is attractive is that they intend to sell the "green" power at a very high premium. I have heard rumors that this will be approximately three times the market rate for "dirty" power. The reason that this can be done is that there are government mandates for communities and public organizations to use a mandated percentage of "green" energy. Since they generally have few or no options for producing this power on their own, they are going to be forced into purchasing a significant portion of their power from "green" energy sources. This in effect creates a green energy monopoly, whereby the large solar power plants can charge what they want - and they are going to want a lot!
In California, we are rapidly getting to the point where utility companies will have met their State mandated net-metering goals. At that point, they will no longer be required by law to hook up any additional net metering systems - and they are lobbying mightily to make sure that the mandate does not get extended. They have no desire to continue adding small net-metering power because they can't charge for that power, all that they can charge for is the cost of the infrastructure. Every net metered dollar is a dollar of lost revenue to them. However, they are also required to provide sufficient power to meet the demand, and the current net metering installations add to their total effective power without costing them anything for building additional capability. So while they don't make money directly on the sales of power, they do save a substantial amount in not having to build new peaking power plants to handle the peak loads (which happily occur at almost the exact same time as the maximum solar production).
When the utilities have their own huge solar power plants they will no longer have a need for the smaller net-metering producers, and therefore they will likely stop allowing residences and small businesses to install these systems. Right now ten gargantuan solar power plants have been permitted (or are about to be permitted). Each covers approximately 20 square miles of desert and produces about a terawatt of electrical power. Many more of these huge power plants are in the permitting stages and will come on line within the next ten years if allowed to continue as they are.
The article was interesting but is heavily biased toward desert solar power plants and away from smaller net-metering installations. I would like to see a much more balanced approach to discussing the pros and cons of these systems. Personally, I see no need whatsoever for the desert power plants. In California we have more than enough existing rooftops, parking lots, shade structures, and roadways to more than produce all of the electrical power needs of the State without adding additional environmental degradations or causing a steep increase in the cost of electrical power. The only clear "pro" that I have been able to determine for the large desert installations is that a few very rich corporations are going to get even richer. By the way, the majority of the desert installations are going to be installed, owned and operated by foreign corporations, with the bulk of the profits going to those other countries, not to the United States. They are not going to be owned and operated by local (within the State) corporations, or even corporations within the United States. It is interesting to check out where the contractors are located, and the nationality of the owners.
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