When homeowners install solar on their residences, he/she needs permission from the company that supplies your electricity. There are 578,000 individual solar installations in the U.S. representing less than 2 per cent of the nation’s total capacity. So what is the problem that faces your power provider? The most expressed opposition is due to those homes that have enough solar so that at the end of the year, their electric bill is zero. The power company still provides power when the solar output is insufficient to power the home. Obviously, between sunset and the next sunrise, the home depends on the local power company for its electricity. Yet the power company receives no compensation for the service or for the upkeep of its power system.
As the editor of Power Engineering magazine, February 2015 issue says, “The debate over solar is about creating a just cost structure that is fair to both sides” (provider and user). I believe that such a fair cost structure could be created based on the power delivery and infrastructure upkeep costs.
Take the power delivery issue. The electric power provider is responsible for providing sufficient power based on the residential demand. That responsibility comes with a price. What should the price be based is the issue. Should it be a fixed cost? Should it be based on the amount of energy that the home uses when the solar PV is insufficient? This is a great topic for discussion.
Now the other cost consideration, infrastructure upkeep. Should the pricing of the power delivery be based on the cost of power to the distributor and a separate cost for system infrastructure?
“Consumers Energy is a regulated utility, meaning that the Michigan Public Service Commission (MPSC) approves all rates for electric and natural gas service provided to customers.
Rates are primarily established in two basic regulatory proceedings that address:
The base costs of utility service that incorporate the pipes and wires through which service is delivered and the costs of owning and operating power plants, and, the costs for fuel and purchased power for electric service (power supply) or gas commodity costs.” (http://www.consumersenergy.com/content.aspx?id=4589)
So now we have an example that separates the cost of electric power and the upkeep cost of providing the system that delivers the power. Every customer tied to the grid should pay for the cost of providing the system upkeep and separately noted on the monthly electric bill. It leaves one nuance remaining; the cost of providing electric power reliably. This cost is a guarantee that you will have electric power at all times and has a value that needs to be defined. Please comment on what you think is a reasonable approach and why.