As thousands of homeowners install solar panels and consume less electricity from the grid, there’s growing debate about who should pay for the upkeep of poles and wires that make up the power system.
In the one corner are utilities who say solar-households are free-riding. That is, they’re using the grid when the sun isn’t shining, and when they want to sell power back to utilities under net metering rules, but they’re not paying for the cost of maintaining infrastructure that allows that. In the other corner is the solar industry, which points to the benefits of solar in improving grid “resiliency,” not to mention solar’s wider environmental benefits.
A paper by Robert Kaufmann, a professor of earth and environment at Boston University, adds something to the discussion. Analyzing the hour-by-hour flows of power in the Massachusetts network, he shows that solar has a positive overall effect even for electricity consumers who don’t have rooftop PV.
Residential solar is useful to the grid because it’s most productive when the the system needs it most: say, in the middle of a summer’s day, when people are running their air conditioners. By reducing the power utilities need to meet demand, they save managers from having to turn to the most expensive and inefficient stations that go on only at times of extreme need.
To incentivize solar, Massachusetts issues credits to homeowners that they can sell on a marketplace to utilities that are required to generate a percentage of their power from renewables. Kaufmann finds that the cost of this program–which all ratepayers have to pay–is about equal to the benefit of solar in reducing overall electricity prices (about $300 per megawatt). In effect, he says, it costs nothing to subsidize solar because the subsidy is being paid off from its own savings.
In an email, Kaufmann, who co-authored the paper with Devina Vaid, says his results may be generalizable to other states “where periods of high demand correspond with hot sunny weather”–though he hasn’t done the actual research.
But is the way states incentivize solar fair? Not really. PV benefits all electric consumers. But, in a perfect world, that benefit should go to homeowners who’ve invested in solar, not neighbors who haven’t, Kaufmann says. Solar households are free-riding in one sense (not paying for infrastructure) but losing in another (not being paid for the benefit they produce). In economic terms, the incentive structure is wrong, even if it balances out in the end.