99% Invisible - 257- Reversing the Grid

Episode Date: May 3, 2017

For most people, electricity only flows one way (into the home), but there are exceptions — people who use solar panels, for instance. In those cases, excess electricity created by the solar cells travels back out into the grid to … Continue reading →

This is 99% invisible. I'm Roman Mars. In the late 1800s, as more and more people began to have electric lights in their homes, the utility companies began looking for a good way to measure how much electricity each customer was using. Actually, way back when Thomas Edison built the first electric power stations, there were no electric meters in people's homes, so he built a monthly fee based on how many light bulbs they had. That Sam Evans Brown of New Hampshire Public Radio. That building per light bulb system wasn't great, so people came up with a meter that did the job well enough. It's the same basic meter that most of us in the US have in our homes today.

And the way it works is when the electricity comes into your house, a little dial turns forward and shows how much you've used. And even though the original designers never really intended for this to happen, if you send electricity back into the grid, the dial turns backward to show electricity leaving your house. Now, if you're like me, there's no electricity leaving your house. It's only coming in. But if you're like Sam, who has solar panels on his roof, electricity is leaving your house. It's only coming in. But if you're like Sam who has solar panels on his roof electricity is leaving the house and going back into the grid. Yeah That's because my solar panels create more energy than I can use that excess energy goes back into the grid and Out to my neighbors and in my state New Hampshire, I get credited for that extra energy I create

It's a practice called net metering and for a while It was totally not Controversial, but now it is there are huge political battles being fought over this Sam and his colleagues at New Hampshire public radio actually did a whole episode of their podcast outside in about net metering because They are even Nurtier than we are and I'm just going to hand it off to them now. So here's Sam and in a little bit you'll hear the voices of his colleagues, Maureen McMurray and Taylor Quimby.

So before we get into the controversy over net metering, I want to go back and introduce you to the guy who accidentally started it all. His name is Steven Strong. Sun energy, the license plate, appropriately. Oh, and then we've got plug in. So like me, Steven is an energy nerd. He's a guy who, when Toyota came out with a Prius, he got his engineers to hack the thing. Gosh.

All right, so can you describe what we're looking at here? This is a lithium ion battery pack that's shoehorned into the spare tire. So he and his engineers made a plug-in Prius and that it years before the car company. And also Toyota went bananas when we told them we were doing this. So way back before he started messing around with Priuses, Steven founded a company called Solar Design Associates. This was at a time when solar power, besides being something on satellites in outer space, wasn't really a thing yet.

And when was this again? Is this the 70s? Yeah, mid 70s. It was a heck of a hard way to make Kinesi living in the 70s and the 80s and the 90s. So Steven's strong is this hard charging, ready to drop everything and get his hands dirty kind of guy, and he kicked off what eventually became kind of a revolution in the way a lot of people are getting their energy. He did it by putting solar panels on an apartment building for people with modest incomes.

There it is, that's the building here. Oh, it's huge. Now, this is huge, but why? Bernie's. Bernie's wide, huge. So this building looks kind of like a big college dorm. It's brick and pretty unremarkable. I think we're not supposed to drive this way.

Well, that's the story of my life. But when it was built on its roof, there was this massive array of solar panels, one of the first of its kind. This was one of the largest solar thermal systems in New England, and it met something like 80% of the annual hot water requirements. But this was like the early days of solar, so this is solar thermal, it's just like heating hot water, it didn't make electricity.

It's a solar thermal, it uses solar panels, but all it does is heat up hot water, and that was cool. Solar thermal is like the simplest technology on the planet. It's so simple. It's got this big box, and on the inside, you've got some tubes that are colored black, and you put water in it, or some sort of coolant

or refrigerant in there, and the sun shines on the black tubes and heats it up, and then you can circulate that back into a tank, and that's all it was. That's, I feel like I could come up with that. I feel like that's like on the level of technology wise of like using a magnifying glass to like set a pizza paper on fire. Wait, the solar panels that Carter put on the White House

were those the solar thermal ones? Yeah. That was stupid. He was just heating water at the White House? Yeah. In any case, it was mostly solar thermal panels up there, but Steven Strong convinced the developer to let him install a couple of solar photovoltaic panels too.

Photovoltaic panels are the ones that actually make electricity, and at that time there were a brand new technology. Now as soon as the technology was available, we were employing it. But there was this question, how should I do the wiring? Wait, what do you mean? So whenever the sun is shining, obviously the electricity will go towards running all the stuff in the building, you know, water pumps, hot water heaters, whatever.

But what happens when the sun's not shining? Or what happens if the sun is shining and there's nothing going on in the building? So what he decided to do was just configure it so that when there's no sun, the building would work just like any other building. It would buy electricity from the utility company and the little dials on the electric meter

would roll forward. Five kilowatt hours, 10 kilowatt hours, 20, 30, 40, 50. I don't know what a watt. It's a lot of money. Oh my God, a lot of money. You don't have to know what a watt is or what a A lot of money. You don't have to know what a watt is, or what a kilowatt hour is. You don't have to know. All you need to know is that it's the measurement for electricity use.

So getting back to Steven Solar panels, what he did that no one had ever done before was to wire it up so that if the sun was shining and the building wasn't using any energy, the unused electricity would flow out into the grid, and the little dial on the meter would just roll in the other direction, backwards. 50, 40, 30, 20, 10. Which means, at the end of the month, when the person comes to check the meter,

the owners of the building would pay for whatever the dial said. So, like, if they used 60 kilowatt hours, but they put in 40, the dial would say 20, and they would only pay for 20. And it worked. It was just, it was intuitive. It was almost like that's just a way it should be. It's like we're producing electrons that are just as valuable as the ones provided by the coal plant or the heavy residual fuel oil driven plant. Why shouldn't they receive the same value? And so it just made sense. Did you talk to the utility at all?

Did you show them your design and say this is what we're going to do? No. The developers said, you don't worry about that. You just get the technical side of this done and get it working. And we'll take care that we're going to be interfacing with the utility. It turned out that they didn't say anything about the system to the utility purposefully. And told me at the time, there's one thing in your career that you should learn early and that is it's easier to ask forgiveness than it is to ask permission. and that is it's easier to ask forgiveness than it is to ask permission.

And that, ladies and gentlemen, is how we got a little policy called net metering. Is that true? So why wouldn't he tell them? Well, it's uncharted waters. He didn't know what the utility would say, and he didn't want to be told no. So net metering, it's the net of when the meter goes forward and goes backward. It's what's in between. Yeah, net as in net versus gross. I mean, the only reason that it was designed that way is because that is what the meter could do. You know, that little spinning disc electric meter, all it can do is spin forward and backwards. So that's what they used. But it was well and truly the first one that was connected to the utility grid outside the fence of a government laboratory.

Okay, so he puts in the solar panels on the roof of this building, what happens? So the utility company, they were actually fine with the whole thing. In fact, they praised Stephen's innovation, but the solar panels didn't last very long. They actually blew off the building in the first year. And they didn't like, they didn't glue them on or whatever.

It's not the truth, it's against windy. So not a terribly auspicious start, but what it did was kick off some intense interest in this idea that solar could serve the needs of a home, but also produce electricity for the grid like a tiny part-time power plant. And this concept of homeowner as power plants is actually important in thinking about how people with solar panels on their homes will be paid for the power they're producing. Because big established power plants sell power to the utility companies at a cheaper wholesale cost. And then the utility companies can sell their customers that power at a cheaper wholesale cost. And then the utility companies can sell their customers that power at a higher retail rate

so that they can make profit and pay for their costs. So then the question becomes, do people with solar panels, do they become like the mini power plants? Should they be paid the lower wholesale rate or the higher retail rate? So are they like Costco or are they like mom and pop? Is that what is that

that I know this analogy? I think that's pretty good. In any case, states eventually started passing laws about this very question. And that was all through the 80s and the 90s. And for the most part, these laws said that the utility companies should pay people the higher retail rate because it's expensive to put solar panels on your house, and this would incentivize solar. And eventually, 41 states passed laws allowing people to get this higher retail rate

for net metering, and utility companies, at the time, they didn't put up much of a fight about it. Yeah, but the utility companies, at this point, they're like dancing with the devil, and they don't even realize it. Yeah, and nobody had any reason to say, oh, this might not be a good idea because solar was just like this weird thing

that probably was never gonna be cost effective. And that's how it was for a bunch of years. Until suddenly, solar started to get cheap. For decades, solar power was so expensive and unwieldy if you could afford it. And that is changing in a mind-bendingly rapid pace. Solar-related stocks rallied on Wednesday on the news that Congress plans to extend

a solar investment tax credit by five years. Starting the mid-2000s, a bunch of really ambitious, well-financed companies start saying, hey, we can make some money doing this. And so from 2009 to 2010, the amount of solar in the US doubled. It doubled again from 2010 to 2011. It doubled again from 2011 to 2013. And from 2013 to today, it's on track to triple again.

Okay, so what are these companies doing that's different? Like how are they making money? What's their model? What they're doing is they're offering people solar for no money down. They pay for the cost of the panels and exchange, they take a chunk of the money that you would earn by producing power. And so if you had someone come and knock on your door and say, hey, want to be part of the next renewable energy era, and you could have solar panels on your roof right now, and it's not going to cost you any money, and we're going to give you a discount on your power bill. I'd say, yeah. And that business model is made possible by net metering, by getting this higher retail

rate for the power people are producing with solar. And I think it's fair to say that the utility companies basically did not see this coming. And so now, they're starting to push back. They don't want to be paying the retail rate. They think people generating electricity with solar should get the wholesale rate, just like a power plant would. So where the fights happening now then? Where the really high profile fights over net metering? Well, so obviously Arizona is the number one. So that's Kristi Schalenberger, who works for this industry news site called Utility Die that tracks all this stuff.

She points out that we've seen net metering battles in California. And of course you have Nevada, which has basically become the by word for what you don't want to see. Nevada's fight got really crazy. Huge, huge blowback from all swaths of life. Basically, you have celebrities, you have presidential candidates. I do not often get involved in state or local issues other than my own state, but I find it rather incredible that the Public Utilities Commission here in Nevada has made a decision which makes it harder for people to

install solar panels. Wait, who is that? That was Bernie Sanders. You're joking. But anyway, you've got this crazy obscure policy that's getting tons of attention. Hillary Clinton talked about it when she went to Nevada and talked to local newspapers there. There are fights in Iowa, Texas, Maine, Vermont, New York, Utah, Hawaii, and of course, right here in New Hampshire.

It's a battle that's happening all over the country, state by state, the local electric companies pushing back and all the solar installers fighting against the utilities, and each state has like its own local flavor to this argument. But I still don't understand a little bit about this fight. Like, why would me having solar panels on my roof? Why would it make the utility company like so angry? Is it just money? Well, yeah, of course it's about money, but who's money? The utility companies want to reframe this argument so that it's not just about their interests, but it's about the interests of the people

who don't have solar panels. So, okay, here I talk to Michael Harrington, who, here in New Hampshire, he used to be one of the guys who regulates electric companies. It's a taking from the not so people that have not so much and giving it to people have more. Say I was retired school teacher in Manchester living in an apartment, there's no way I'm going to put solar panels on that apartment roof

and get any benefit from that metering but I'm going to have to pay for it because some guy in Bedford, I just use Bedford as an example, I've got nothing to do with Bedford. Bedford, if you're not from New Hampshire, is a wealthy suburb of Manchester, which is our biggest city. But he might have a 4,000 square foot house, and he says, boy, if I do this net metering thing in five or six years, I'll be getting basically free electricity. So it's a reverse distribution of wealth from the way we normally do things in the United States.

And I don't think that's right. Hmm. I get it. So it's like someone ultimately has to pay and if all of these people who are people of means who are homeowners have solar panels, then the cost of the other utility will go up. And that means that people who are renting or anything like that, they get screwed because I want solar panels on my house.

And that's me. This is how rate structures work, right? A utility is a big company that invests a ton of money in polls and wires, in energy descent across those polls and wires, and then they take all of their customers and they divide the cost of that up between all of them and they spread it around. And under that business model, if say 50% of the people in the US went solar and started that metering, a big chunk of the money that they're saving is money that's not going towards paying for the polls and wires. So this is the argument against net metering, which is you, or let's say me, because I actually do have solar panels on my roof right?

So you're screwing me because I don't. I'm screwing you. Yeah, me putting solar panels on my roof costs you money. What the hell, Sam? What the hell, Sam? Except the problem is we're not 100% sure that's true. Hold on a second. I've got to look something up because um so this is another former regulator Cliff Bilo. Where is that? He's the one here in New Hampshire who wrote the first initial net metering law here in New Hampshire. And he says that even then, there was this intuition,

like this feeling that maybe there were actually benefits to solar. So the feeling was solar might be higher than average and value, and I think the evidence has proven that out over the years that solar tends to produce at higher than average price hours. So Cliff Bilo is literally saying the exact opposite thing from Michael Harrington.

He's saying that me putting solarony Solar and Payons on my roof actually saves you guys money. Okay, well this is a pickle. I don't know if I believe him. I don't think it's gonna save enough money. All right, so let's first maybe dig into why it might be. Even though we pay the same amount for every unit of energy on our electric bills,

all electrons are not created equal. In reality, every five minutes, there's a new auction for energy. of energy on our electric bills, all electrons are not created equal. In reality, every five minutes, there's a new option for energy. So every five minutes, we've got a new price for energy. When demand is low, prices are low, and they can actually go negative, like power plants will pay us so that they don't have to shut down, usually that's at night. And when demand is high, prices can be insane, like a hundred times higher than normal.

And again, the utilities take all of those costs, they average them all out, and they divide them by their customers. So the thing is, solar panels are producing at times of day that's really high value. Sunny, hot, those are usually the times where electricity is expensive, and that's when you're producing solar power.

And so by feeding back into the grid, we're cutting usage so much that it lowers the price during those peak times. Exactly. And so cliff below is arguing these people are actually, you know, even though they're getting paid more than a regular power plant, they're actually getting paid less than the energy's worth. And that means that there's savings for every solar panel you put on the grid. I would admit, but that's only true up until a certain point, right?

I mean, if you suddenly tip it and it goes from 20% of the population on solar panel to 50 to 70, then I'm sorry Cliff, your math doesn't work out. That is exactly right. You should go work for MIT. So people do have ideas about how to solve all of this, which we can talk about, or we could not. Give us one. Give us your favorite. All right, well, the most interesting to me

is from a guy called Don Creese. Do you think that the way that we pay for electricity is just dumb? It's a leading question. Yes. we pay for electricity is just dumb. It's a leading question. Yes, it is clearly inappropriate in today's technological age to continue to charge people the same price for electricity, 24.7, when the cost of providing people with electricity varies sometimes by orders of magnitude,

depending on the time of day and the time of year and the grid conditions that apply. So is it not then by extension also kind of dumb to not vary the price that we're paying customers who are generating solar power from their roofs? I agree with that as well. Don is the state's consumer advocate. His job is to watch out for people who pay electric bills. So basically he's supposed to be keeping costs down and looking out for the little guy.

It simply isn't fair to take a retired schoolteacher living on a fixed income in Manchester and force that customer to pay subsidies to a wealthy hedge fund manager living in Bedford, who has a MacManchon that's covered in solar panels. Is there some actual retired school teacher and manchester and some actual hedge fund manager in Bedford because Michael Harrington gave me the exact same analogy?

Not that I'm aware of. They're totally is. Where are those people? But anyway, I mean, Don Crease also thinks that this cost-shifting thing is a problem. And so this is what Don Crease wants to do. It's called a time of use rate. As in, you get paid more if your solar is going during those high price times, like later in the afternoon, but you also pay more if you're using more energy in the afternoon. And so to make this really simple, every day there'd be a

different price, a higher price between 2 PM and 8 PM, which is when electricity is pricier. between 2PM and 8PM, which is when electricity is pricier. And this is cracking open the door to a radically different way to pay for energy. Instead of abiding by this crazy illusion that every electron is worth the same amount, it's acknowledging that when demand is high, electricity gets expensive, and maybe we should let people know that.

I think that we can provide that more frequently updated information to consumers. So this is Jessica Transick. She's a professor of energy studies at MIT. I think that that should be possible, yeah. But she wants to take it even a step farther. Remember, there is constantly a new price for electricity every five minutes, and she thinks we should have a display in our houses that says, here's the price of energy right now. Like something that literally follows,

like the five minute, every five minutes, the market clears, you get a new price. Well, maybe hourly, you know, I think five minutes, five minutes might be a bit too much, but hourly. So if you ever find a utility that wants to do that, I'm ready to sign up, I'll be in the pilot. I think that'll be fun. Okay, great. I'll let you know. I'll let you know. Now, see, I actually find that really interesting because I had no idea that it varied at all

and it varies wildly. And, you know, I think twice about turning the light switch on if there was a flashing red high price alert or something. Yes, right. Now, there are some really important caveats to this approach. For one, rolling out new meters everywhere would be expensive, and this would be a very big,

maybe very difficult change in the way utilities operate. But for two, the markets can be brutal. There are prices that can go up like a hundred times the average, which is crazy. And that's why even Jessica Transick thinks that they should have a cap

and why Don Crease wants this sort of D-clawed version of that, which is like a slightly more expensive period from 2 to 8 p.m. versus really following the markets. But they both think that it's time we looked from 2 to 8 p.m. versus really following the markets. But they both think that it's time we looked at redesigning the way our electricity is metered

because solar has made everything more complicated. Here's Don Creese. Well, you know how net metering started? There was that architect guy and... And strong. Yeah. Did you actually talk to him? I spent a day with him. Really? So you know that like he? That's been a day with him. Really?

So you know that he just did it without asking anybody's permission. Just like he didn't know. I want to see if my meter is going to run backwards. If I just wire my building up and attach it to the Boston Edison grid, I want to see what happens. I mean, it was right. But the fact is that it wasn't like the commission on

uniform state laws got together and said, let's design a net metering statute that will promote the development of distributed generation in this really logical, rigorous way. No, it just happened by accident. And now it's everywhere. And so it is high time for everybody to take a look and see what a rational, well-designed bit of public policy would be. that a public policy would be. Or maybe we'll just go back to building by the light bulb. Let's do it. I'm going to reduce my number of light bulbs.

I can handle that. Be very cheap. 99% Invisible Was Produced This Week by Sam Evans Brown and Logan Shannon, with help from Maureen McMurray, Taylor Quimby, Jimmy Gutierrez, and Molly Donahue. A longer version of the story aired on the podcast outside in from New Hampshire Public Radio. Go listen to some of their other episodes, they're great, they do nerd stuff just like we do and they make it really fun, you're gonna like it. Special thanks this week to Bob Johnstone who wrote the book, Switting to Solar and Haskell, Whirlin. You can see pictures of that infamous first grid-tied solar apartment building at our website, 9-9-PI, dot work. Music this week was from Jazaar, Jason Leonard, Blue Dot Sessions, Pottington Bear, Okakumi,

and Sean Rial. The outside-in theme music is by Break Master Cylinder. 99% of visible is Delaney Hall, Emmett Fitzgerald, Kurt Colstad, Taren Masa, Katie Mingle, Sean Rial, Avery Troll from Munch's Sharif Yousif, and me Roman Mars. This piece was edited for our use by Katie and Mixed by Sharif. We are a project of 91.7 KALW in San Francisco and produced on Radio Row in Beautiful, Downtown, Oakland, California. You can find this show and join discussions about the show on Facebook. You can find this show in joint discussions about the show on Facebook. You can tweet me at Roman Mars and the show at 99PI or we're on Instagram, Tumblr, and

have a nice subreddit too. But we release at least two articles about design and architecture every week on our website. That's 99io.org