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Some smart movers and shakers in Minnersota...

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  • Some smart movers and shakers in Minnersota...

    I wish some of our so-called leaders in Canberra were capable of the same kind of forward thinking as those in Javaphile's home state...
    Could Minnesota's ‘value of solar’ make everyone a winner?


  • #2
    Unfortunately all is not as sunny as one is led to believe with this new 'value of solar' rating method. While most homeowners may see an increased financial value in the solar power they generate in the short term (Potentially only in the very short term!) beyond that they will see no added financial benefit using it and will in fact loose money if it's put into place.

    The 'net metering' and 'value of solar' systems/methods are not only about how much is paid per kwh generated. Each method also defines how the number of kwh's to be paid for is determined.

    Under 'net metering' the number of kwh's of electricity generated is simply deducted from your total kwh's of electricity used. If you generated less than you used you pay the retail price for the difference, and if you generated more than you used you are paid the wholesale price of electricity (This is the price the utility company pays to buy power from other utility company's which is roughly1/2-2/3rd's of the retail price.) for that extra amount generated.

    Under the 'value of solar' (VoS) method for the kwh's generated you are paid the VoS price. You are then billed for all the kwh's of electricity you used at the full retail price.

    It doesn't take a math genius to figure out that as long as the VoS price is above the retail price a homeowner comes out ahead using VoS over 'net metering'.

    As stated in the article the VoS is currently above the retail price. Or is it? At the VoS price of 13.5 cents per kwh (Given in a VoS methodology document released by the Public Utilities Commission on 31-1-2014.) that is indeed above the 'energy charge' (The figure most often used by the utility company and Public Utilities Commission when giving the cost of electricity.) on our electric bill. However that is just the beginning of the true cost of the electricity. The 'energy charge' amount is only one of (Currently!) 11 different charges, fees, and taxes that make up the totality of our bill. The 'energy charge (winter rate)' for my current bill is 7.4 cents per kwh. So yes, the VoS is clearly more than the 'energy charge'. But lets start tacking on all the other utility company charges. There's the 3.2 cents/kwh 'fuel cost charge', the affordability charge, the resource adjustment charge, as well as the 'basic service charge'. Add them all up and you have 12.27 cents/kwh. And that price is before all the city/county/state fees and taxes are added on. Add all of those in and you have 13.82 cents/kwh. But wait, it gets even worse. As you may have noted the 'energy charge' quoted is the winter rate. The summer rate is ~15% higher! Add that on as well as the higher taxes it causes and in the summer we pay ~16 cents/kwh. So even at today's rates you are ahead of the game using the old 'net metering' method!

    But wait! It gets even worse!

    One (Of the many!) things that they fail to mention is that while all their calculations are based on a 4-5% annual increase in the cost of electricity Xcel (Far and away the states largest electrical utility.) has already made one filing for a rate increase and is in the process of submitting another filing that combined with the current one will increase the price they charge by almost 50%! Add in all the additional rate increases over the 25 year period you're locked into today's VoS price by using that method and the homeowner gets royally screwed.

    The only people/organizations that would benefit from the new VoS is the government. They get to collect their ~15% fees and taxes on the power you generate where-as under 'net metering' they only tax the power over and above that which you've generated. The utility companies as they get to lock you into an artificially low price for the power you generate for 25 years. And last but certainly not least big business will profit as they're the only ones who will have the space and resources to install solar systems that will produce more power than the company uses. (That is the only scenario where VoS pays more than 'net metering', when paying for power generated over and above consumed power.) And who will pay that profit to Big Business? We the consumers will via rate hikes. What? You didn't really think the utilities were going to loose money did you?!? As always any added cost to them will be passed on to their customers.

    As much as the utility companies would like to have you believe that the new VoS is bad for them and good for homeowners the reality is that's pure bullsh!t. The whole process/system is nothing but smoke and mirrors to make the average homeowner think they're getting a good deal when the reality is it's just one more way for big business and government to make more money off of us.

    Java "Does the math" phile
    Toys! I must have new toys!!!


    • #3
      And interesting that Australia is effectively going the other way, with most of the solar tariffs now abolished, so in effect we have net metering.

      Mind you, with electricity at roughly 23-25c for most residential customers, net metering is still financially viable.

      However, as solar installations become increasingly cheap, we will likely get to the stage in Australia where even net metering will be curtailed. It's simply too expensive for utility companies to provide all the infrastructure if people are only using grid power when the sun isn't shining.


      • #4
        Whenever the Govt proposes changes for 'our' benefit, I always try to see what they really mean, because I simply do not believe they will ever do anything that reduces how much we pay or that would increase our rights. It's all a sleight-of-hand and a shell game designed to confuse us.

        From how you create the money you borrow when you sign your name through to the wildly inaccurately named Freedom of Information laws, they do nothing to improve our lot and will never protect us against an increasing debt or obligation. If the Govt suddenly jumps onto the VoS system as being good for us, we will know for sure Java is right; the Power Corps and the Govt will be seeing a way to get more money from us.


        • #5

          The devil is always in the detail, as they say....



          • #6
            Yes, I'm afraid I agree with Journeyman.
            I don't trust governments at all due to the fact they are comprised of politicians.
            Government is only ever for the benefit of politicians and the establishment who own it.