PV Economics 101 - Part 2
By Josh Landess
Net Metering and National Energy Policy
KA: I heard all sorts of exotic things like that but the reality is if you're grid connected, you already have grid to where you're putting in the solar system, then net metering is the best way to go. Cause the grid is one hundred per cent efficient from the point of view of the consumer using it for net metering. And if you have a time of use meter it's three hundred per cent efficient. You get back more energy than you put in.
EVW: I'll have to think about that calculation for a while. Do you feel as I do that net metering is kind of a neglected topic in some of the energy debates where we're trying to determine energy policy? And it has so much potential to kind of help out if we're lacking in energy because it gives homeowners an incentive to produce, frankly, an enormous amount of energy. Or am I exaggerating that?
KA: Yeah I guess it is in some ways a "neglected topic" for this is a good way of putting it. I think the problem with the current net metering laws is that we're making progress and improving them, three words, one comma, one period at a time. And what's really needed is the recognition that the inverters that connect this power to the grid are Underwriter Laboratory certified devices just like the toaster in your house. And this technology is not like it was twenty years ago. These are not home-brew devices. They're appliances. And the laws ought to just treat solar like any other appliance. You should be able to just plug it in and use it.
EVW: Well considering some of the urgency brought about by the electricity crisis and frankly the war, I keep thinking, with the administration]s much-vaunted energy industry contacts, that they could kind of help us all cut through a lot of the red tape. I'm not trying to get on their case but I see fifty states with fifty different policies and fifty states worth of homeowners kind of struggling with hammering all that out as you've alluded to. I just keep thinking, if we could just all get on the same page it would be good.
KA: The thing is, to turn the page back here, you asked about the payoff period on my system.
KA: Taking into account the legal fees my system will never pay off.
EVW: And you mentioned that PG&E customers are helping pay their legal fees?
KA: Yes they pay all their legal fees.
EVW: Under the law.
KA: Right, under the law. As long as PG&E is able to fight renewable energy with rate-payer money and force people to make enormous legal expense expenditures in order to inter-connect systems, we're never gonna have solar. And PG&E knows that, that's why they act that way.
EVW: This is seconding something I heard elsewhere by the way. It wasn't an anti-PG&E thing, it was just a comment by an experienced progressive utility guy that a big part of their costs were the bureaucratic, legal, and paperwork costs in trying to get net metering hammered out.
KA: Well I think what's needed in the net-metering laws is the recognition that these devices are appliances. You should be able to connect them with at the most, "notice" to the utility, not "permission" from the utility. This is even more true in the case of smaller systems under a few kilowatts. You can buy them over the web with a credit card, they can ship to your door UPS. But I don't think we're gonna get help from the current federal administration. I think as much as you say that they have energy contacts, they're oil contacts.
EVW: And yet the matters for all of us are so urgent you know that putting aside all of our political opinions, maybe they can just make that effort or something.
KA: I wouldn't even say "if everybody", but if more people drove solar powered electric cars, Bin Laden would be a goat herder. We'd never have even heard of him.
EVW: Gosh I could go off on a rant but I'm not gonna...
KA: It reminds me of... there's a comedian here. I can't remember his name but he does this... He always starts his shows with "I don't want to go off on a rant here" and then he does.
EVW: Probably Carlin. If it's not it could be. Certainly some of the money that I pay when I pay for gasoline is going to Saudi Arabia and thence to other people or is helping prop up the price of world oil, so a country like Iran from whom we buy no oil can sell to say Japan or somebody and make money. I'd like to believe they have nothing but good things in mind for the future of the world but I'm having a hard time believing that these days.
KA: Yes and the interesting thing is the United States does produce a lot of oil. We just use so much more than we produce. But the curve is very steep at that point, where small reductions in consumption can make a big reduction in dependence on foreign oil and hence price. If you look at especially what happened with California over the summer with electricity, when in this very steep curve, is that the very small cutbacks in conservation made an enormous difference in the wholesale price.
EVW: Yes. There was a lot of room there based on years of not even really paying attention to our use of energy.
KA: Now the state is trying to give it away. They're telling people to leave their Christmas lights on. It's patriotic to help consume the power rather than throw it away. Now if the United States was able to cut its fossil fuel consumption, I don't have real numbers here but I suspect it's less than thirty per cent, we wouldn't be importing from the Middle East.
EVW: Thirty percent what?
KA: Of our fossil fuel consumption. Do you know... do you have any data...
EVW: I do but I'm not clear what the question is....
KA: I'm not sure what the real number is but if you look at the percentage of our fossil fuels that we provide ourselves versus import, we provide most of the fuel ourselves.
EVW: Yeah it depends... I know the numbers for petroleum. They are roughly this: We use something in the neighborhood of twenty million barrels per day. And of that, slightly more than fifty per cent is imported. That number, twenty million barrels of oil a day, is roughly, I think, thirty-eight or thirty nine per cent of total energy usage including everything. So then you've also got coal and natural gas-fired electrical power production, and what-have-you.
KA: For which we don't import.
EVW: Much of which we don't import, correct. And nuclear and solar and everything else. As you know, when you look at changing over to electric vehicles or changing over to distributed energy at households and and all this other neat, cool stuff, you start to bring into play the fact that these different percentages are intertwined. That is, using gasoline in your car relates to using natural gas to heat your house for example or to generate electricity for your stove just because the different appliances can start to use different things.
KA: And then more specifically the big power plants can use different fuels and will take the cheapest one.
EVW: Right. I mean if I'm looking at a guy like you, what you're doing is helping to avoid the gasoline or diesel that would otherwise go into your four cars. And obviously you're producing electricity renewably above and beyond any of that. And so you're helping your local power plant to avoid burning natural gas and whatever else. Energy.gov is a good place for getting a lot of these numbers.
KA: The important thing to recognize is that not only am I doing that, but I'm doing so at great savings to myself. If the system has an eighteen-year payback and I can borrow from a bank on a 30-year note, I can send a smaller payment to the bank every month than to the power company.
EVW: So you mentioned that this system will never pay for itself given your legal expenses. That's one side of the spectrum. What would be the other? What if you had absolutely no hassle and it was just all good to go from the start? About how long would it take?
KA: That was eighteen years. But the system will keep running after that, and the power it produces is free. After 30 years the output will be down to about 80% of the original. Hopefully by then my cars and the appliances in my house will me more energy efficient and my power usage will have gone down to match. If not, I can always add a little more panel to the system.
EVW: I don't think most people looking at trying to set up power usage for their house would calculate 31 kilowatts. I'm sort of curious about how you came to that.
KA: Well, the way you size a system is actually relatively straightforward. You look at your past year's power bill and you size the system to produce that much power in the next year in kilowatt-hours. And we have big power bills because we have a lot of cars. It's still cheaper than buying gasoline.
EVW: Yeah you mentioned also that you have pretty good power bills because of your computer stuff. Did you have anybody come in to consult for you whether or not there's better insulation or something you could do on your house or is that really not that important?
KA: It's not that important. The house isn't heated much because the climate we live in is coastal.
That Can't Do Attitude
EVW: I don't want to get on GM's case in this discussion but do you think they'll ever consider coming out with another EV long the lines of the EV1? Because I know that most of the people that have leased it have been happy with it, you know?
KA: Well I think that all depends on the outcome of their lawsuit against the ARB. If they're forced build zero emission vehicles, I think the EV1 is the best car they have.
EVW: I'm skeptical of their being able to reproduce a lot of the infrastructure they had in place to build that car. But it's a pity because, like I said, everybody seems happy with it.
KA: Well you know I'm skeptical, yes, but to make a comment about the auto industry in general and not General Motors: You're talking about an industry that in just a time period measured in months converted from building cars to building airplanes and tanks during World War II. The "can't-do" attitude has only to do with electrical vehicles. If the law holds and indeed in 2003 they are required to build zero emission vehicles, the EV1 is really their only option. I don't see them coming out with anything else. And if they don't build it they'll subject themselves to shareholder lawsuit.
EVW: You're somewhat involved in the ARB lawsuits in some way?
KA: I am now a Party as an Intervener.
[Note: Since the interview took place, the status of the lawsuit has chnaged. GM has recently dismissed their remaining complaint and re-filed their lawuit in both Federal and State Courts in Fresno, with Chryslter as coplaintiff.]
EVW: Last we talked, we were wondering aloud to each other, trying to figure out why GM seems to have built this wonderful car but doesn't seem to want to pursue it much further. And I wondered it you had any further thoughts on that? I can't figure it out.
KA: I can't figure it out either. There's been a change of management in the company since they built the car. They went through a period of a financial crisis that caused them to belt-tighten in general, and I can see the EV1 program was one of the things that got belt-tightened. The sad thing about it is that in 1997 when they built the car, the car that they were trying to build was a Panasonic Gen1 and ended up with the Delco Gen1 that just did not have the promised range. It had a range of 60-65; that's about what we were seeing on ours. The car met some needs. It didn't meet all the needs we had for a car. They introduced this car at a point when the market wasn't ready for it. And the car wasn't really ready for the market.
I think the electric vehicle curve is an exponential one and they stuck it out through the very flat part of this curve. And I give them credit for that. And just when the car started taking off then they bagged it, and that was the really sad thing. If they had stuck it out over the past two years and continued to manufacture these cars they could have three or four thousand of them on the road now. They'd have all the quirks worked out. And I think they'd be in a position where, with the lead acid powered car, that it would have been profitable.
EVW: Not only that but they'd have unbelievably happy customers with a lot of cache because when people see it I know they tend to point at it and want to buy one. Some people do, I should say.
KA: Well now that we have four cars and have an extra one we can loan out to people and because we have two EV1's, it's usually an EV1 that goes out. And what I'll do is set up a charger at someone's house and give them the car for a week. And at the end of the week I do the cruelest thing in the world. I give them a phone call and say I'm going to pick it up and take it to the next guy.
EVW: So it has been in your experience that they're really happy with it when you do this loan-project?
KA: I have not had anyone I've loaned the car to for a week that did not want the car. And many have likened me to a heroin dealer who gives them the first dose and then won't sell them more.
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