Feed-Out

SMUD announced recently they will become one of the first utilities to offer a feed-in tariff to PV (and other renewable) generators, beginning in 2010. That is, they will not be net metered; rather, the entire array output is offered to SMUD and SMUD is obliged to pay at a specified rate for a long time frame; 10, 15, perhaps 20 years.

This is, more or less, the best method I can think of to spur additional PV installation. At a minimum, someone should be able to sit down with a calculator, determine the up front installation costs and determine the return from SMUD based on the feed-in rate. This is a long term guarantee for renewable energy. It's been something I've blogged for for two years, and I'm glad we're going forward with this.

But I'll be damned that it's not going to offered to me...I was too early an entrant; I received a SMUD rebate for my installation, and the thing that I will bitch about until my array spits out its last watt is that my payment for excess energy is determined on how much energy I use; the more I conserve, the less I get paid for it. Feed in won't be applicable to most home solar installations, because SMUD intends on going after larger PV providers with little load behind the meter; that is, they want PV farms.

This makes sense in my opinion, even though I'm personally pissed I don't have the feed-in option. SMUD and everyone else realizes how insignificant and trivial 2kW to 4kW home PV retrofits are in the grand scheme of things. We don't necessarily need all these small insignificant systems, we need soccer-stadium sized installations, and the only way you're going to get anyone to invest in something of that scale is to offer some degree of future revenue guarantee.

Therefore, the weight of the future of Sacramento PV rests on a handful of SMUD rate designers to come up with a feed-in rate that will spur additional generation. Make it too complicated with several dozen schedules and hundreds of variable rates depending on time of generation, time of year, length of contract, etc., then it becomes a fiasco to figure out the future revenue stream. Make it too cheap, and you're not going to get a sufficient level of PV growth that's worth a shit. The question is, will it be sufficient to drive new generation production at more than the current trickle of a few MW per year...will they design it correctly?

And by correctly, I really mean to ask, "will it be subsidized by all electric ratepayers?" because PV is expensive energy and the only way to make it work in our world is to subsidize it. I sincerely hope we do. I personally think we ought to tariff a full $0.02-0.03 per kWh consumed from non renewable energy both to reduce overall consumption and to use that to subsidize the installation of thousands and thousands of PV systems. If you don't want to pay it, either don't use so damn much power, buy into a solar share farm, or install your own system. We're collectively pussyfooting here -- a 2kW installation here, a 3kW system there -- come on, start charging significantly more for conventional power. We have renewable portfolio standards to meet, yes? Los Angeles supposedly needs to replace 2,600 MW of out of state coal-fired generation in less than eleven years. 2kW homeowner hack-jobs like mine won't cut it.

My gut feeling is that SMUD won't build enough into their feed-in tariff to encourage significant PV generation. Which is too bad, really. Too beholden to too many interests that don't lie in the renewable energy spectrum. But I've not come to expect anything different in my America. I am 200% sure that LA will fail to meet their non-coal mandate...not because they couldn't, but because they won't have the courage to raise rates enough both to reduce fossil fuel consumption and force renewables to a significant level. My SMUD will fall into that same tar-pit.

If we don't make the hard decisions today, they are only going to be many times harder tomorrow. A lesson lost on the California Legislature, by the way. We collectively know we are moving to a renewable energy future...but we're approaching it like most Christians vying for heaven; we all know what we need to do to get there, but almost no one is doing what's needed right now.