In a letter to the Las Vegas newspaper today a reader makes the argument that owners of rooftop solar panels are not selling power to NV Energy at retail rates, as the company argues, but are rather banking power for use at another time.
The letter was in reply to a Review-Journal editorial that swallowed the power company claim non-solar panel owners are subsidizing those who can afford to install solar panels.
“NV Energy is not buying my excess; rather, the relationship is more like a bank account. I deposit my excess energy with NV Energy when I have it, and withdraw it during the months I need it,” the letter writer argues.
In July, NV Energy submitted a proposal to the Nevada Public Utilities Commission that would cut the credit for power uploaded to the grid by solar panel owners from 11.6 cents per kilowatt-hour, the standard retail rate, to 5.5 cents per kWh, which is closer to what the company pays for wholesale power. The PUC staff has even suggested making the rates retroactive for existing solar panel owners.
The company argues that a customer who installs solar panels and becomes a so-called net metering customer cuts his power bill by up to $1,181 a year on average, while the utility avoids no more than $519 in purchased power costs.
What everyone seems to be overlooking is that solar panels create excess power that is available for the grid at peak-use times. Power is not publicly traded on the open market at the same price all day long. The higher the demand, the higher the price. Prices fluctuate on the half hour.
Solar panel owners should not be getting less in credits per kWh, but more. In summer months, industrial scale power customers typically pay four times as much for power delivered in the heat of day at peak-demand periods than overnight.
In fact, NV Energy has set up Time of Use (TOU) rate schedules that its customers may choose to opt into. That’s what smart meters are for. Under one payment schedule a residential customer in the summer would pay 36 cents a kWh during peak hours but only 6 cents during off-peak hours. Another schedule with different parameters would charge 50 cents a kWh during summer peak.
For those who are not home during summer peak hours and set their thermostats higher, such a schedule could save money.
Since even NV Energy concedes electricity is worth more at the very time solar panel owners are providing it, perhaps the PUC should require the company to pay more, not less. Makes perfect sense.