Newspaper column: Weaning from the power grid?

The one law the Nevada Legislature manages to pass every session is the Law of Unintended Consequences. Thus it is with its ongoing and pervasive attempts to micromanage the state’s electric power grid — acts that may unleash unanticipated disruptive forces — as reported in this week’s column, available online at The Ely Times and the Elko Daily Free Press.

Since 1997 when the Legislature first approved a renewable portfolio standard (RPS) — which now mandates 25 percent of the state’s electricity come from renewable sources such as solar, wind, geothermal and biomass by 2025 — lawmakers have been crafting various schemes to dictate just what the power grid will look like decades from now.

Not only are there mandates, subsidies, tax breaks, incentives and federal land giveaways for those mammoth solar and wind farms, but similar giveaways are being offered for what the industry calls distributed energy resources (DER). These are primarily solar panels on the rooftops of homes, businesses and government buildings, as well as a few windmills.

Backyard solar panels.

Backyard solar panels.

By law, these distributive energy resources are tied into the NV Energy grid and their power generation is accounted for by “net metering,” which how much power was generated by the DER, how much was uploaded to the grid and how much was downloaded from the grid.

Such installations qualify for various subsidies and rebates, many funded by NV Energy’s ratepayers, that can cover as much as half or more of the cost of the installation, most of which are also exempt from property and sales taxes in Nevada. In a perverse way, the non-DER-using ratepayers are paying to allow DER-using customers to reduce their power bills.

This legislative meddling might have consequences undreamed of by lawmakers and regulators.

When the courts in the mid-1980s broke up Ma Bell’s monopoly and created regional Baby Bells, little did anyone anticipate then that technology would have done the job. Technical breakthroughs changed the way Americans communicate — cellphones, fiber optics, the Internet. Landlines are nearing obsolescence.

A report prepared for the Edison Electric Institute, an association of American shareholder-owned electric utilities, warns those shareholders that renewable DERs, if combined with breakthroughs in technology and the government-dictated distortion of the market, could face a similar outcome.

“Due to the variable nature of renewable DER, there is a perception that customers will always need to remain on the grid,” the January white paper says, noting the obvious fact solar panels work only so long as the sun shines. “While we would expect customers to remain on the grid until a fully viable and economic distributed non-variable resource is available, one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent. To put this into perspective, who would have believed 10 years ago that traditional wire line telephone customers could economically ‘cut the cord?’”

The free market and technology could better plot the future of the electric power market, but the central planners in the Nevada Legislature think they are omniscient and omnipotent.

This home in Frederick, Md., is a net-zero energy house. (WSJ photo)

As if on cue, The Wall Street Journal is out today with a feature story on what it calls net-zero energy homes around the country and calls them a growing trend.

“Green” housing accounted for 20 percent of all new homes built this past year, the paper quotes McGraw Hill Construction as saying.

“So far, net-zero houses are only a fraction of the green residential movement, but other environmental features are becoming widespread. The government is fueling the trend with federal tax credits for things like insulation that reduces a home’s energy loss or geothermal heat pumps. Depending on where they live, homeowners can also claim rebates from their state, town or utility,” WSJ reports. (See above)

The paper said net-zero homes cost between 5 and 10 percent more to build, though one company reports it is building a five-bedroom, net-zero house that costs only 2 percent more.

The primary reason for the growing demand for net-zero houses, home builders told  WSJ, is a desire to cut utility bills, but also to counter future future energy costs and to become independent from the grid.

This is an animated rendering by a team of UNLV students called DesertSol. It is a net-zero energy vacation home and will compete in the U.S. Department of Energy Solar Decathlon this year:

Read my full c0lumn at Ely or Elko.

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12 comments on “Newspaper column: Weaning from the power grid?

  1. Steve says:

    Exactly.

    Its a question I have many I have come across with grid tie systems installed. The cost is very high, you have said yours will ROI in about 10 years. My question is always falling on dead air. They have no answer. The question is “what happens if 99% of homeowners install a grid tie?”
    Of course the answer could be NV Energy won’t allow it. But the other half of the question is “What happens if everyone goes off grid?” You have just provided what I have been watching come down the pipe for years.
    My answer to the 2 part question has always been, I will take my part of the capitol to install a PV grid tie and invest in something like a DRIP. $20,000 in a good dividend reinvestment program can cover electric bills for decades very easily OR one can pay out of income for the electricity, letting the investment grow. Then use that money to upgrade and get off grid.

    PV Grid tie locks the homeowner to the grid for at least 20 years, an investment is fluid and can be moved as needed or wanted.

    I am ready when the time comes.

  2. Rincon says:

    The best way to encourage net zero homes is to stop subsidizing rural households and businesses and permit the utilities to charge differentially depending on how expensive it is to provide power to each unit. It is much more expensive to provide power to small numbers of far flung ranchers than to the same number of people in a city. The Rural Electrification Program brought power to isolated people, but its benefits are no longer required.

  3. Let the market loose.

    ________________________________

  4. Wendy Ellis says:

    But don’t make us subsidize the market.

  5. […] Thomas Mitchell The one law the Nevada Legislature manages to pass every session is the Law of Unintended […]

  6. Vernon Clayson says:

    I remember when rural electrification came around in the late 30s, the “grid” wasn’t taken for granted as it is now, if anything it was almost an unnecessary luxury for the rural people, first came eating and a roof over their/our heads. We lived in a rural area in southwestern New York and not everyone had the wherewithal to bring the wire to their homes or to wire their homes for it so it was a slow process. One of my uncles owned a farm, he lived in town and commuted, while my grandparents and their other children lived on and worked the farm, the barn got electricity before the house my grandparents lived in did. Their home was electrically “net zero”, lit by kerosene lamps, Rayo was the best brand, and lanterns hung at the door for trips outdoors in the night. Like many people in the area water came from a hand pump over a well in the yard and the outhouse was at the rear of the house. Progress is slow, we’ve all come a long way, the TVA was a big thing as was “Hoover” Dam and as nearly as I can see far more practical and productive than freaking windmills and solar panels.

  7. I remember the smell of kerosene lamps.

    ________________________________

  8. […] Newspaper column: Weaning from the power grid? […]

  9. […] Senate Bill 252 would require NV Energy to buy even more overpriced renewable energy, which currently costs at least triple the cost of power from natural gas and coal, and pass the cost along to ratepayers for the next 20 years no matter what happens to the price of fuel or technical breakthroughs. […]

  10. […] Senate Bill 252 would require NV Energy to buy even more overpriced renewable energy, which currently costs at least triple the cost of power from natural gas and coal, and pass the cost along to ratepayers for the next 20 years no matter what happens to the price of fuel or technical breakthroughs. […]

  11. […] I’ve suggested in the past, who needs a power grid when everyone can produce — and store for later — their own power? […]

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