June 19, 2012
By Matt Palmer
Our home is perfect for solar. We have a south-facing, completely unobstructed roofline with a good pitch. But, I knew that before Enmax showed up. What I wanted to know was would there be a cost benefit, or would it cost more money over the long-term? Enmax was straight up in saying that installing solar was not going to save me money. Depending on what option you can afford, and there are three lease options from $0 down and $60 per month to $3500 down and $17 a month for 15 years, determines how much the system will cost in the long-run. The Enmax system will produce anywhere from 12% to 20% of annual electricity needs – weather and location dependent.
As much as Enmax is making best efforts to make solar easy for people interested in adopting it, at the moment the program seems to be more for people who are able to do it for the feel good reasons, or as Enmax says people who value leading the way into the future.
In doing some research I found a great blog post by University of Alberta Business School‘s Andrew Leach. In his blog “Enmax Solar Power – A Definition of Affordable” Mr Leach crunches the numbers on Enmax’s solar program. But are the numbers, the affordability the only issue? What are the impacts to the electrical grid and distribution system if more people start switching? Is the system ready for the migration, and changes in daily demand?
40 US states have a system called net metering, and according to a recent article in the New York Times “Solar Payments Set off a Fairness Debate“, the push to solar creates problems for electrical companies in managing costs and the power grid. Power companies are required to buy excess energy from residential and commercial solar producers. Ostensibly, one would think this is a good thing. More people using solar means less demand on coal plants. At some point there would be a threshold where the coal plant can cut capacity, and still maintain baseline for times when solar is not producing, giving a benefit of less pollution. Cutting capacity will cause problems for the owners of the power plants, who still have to pay for the costs of building and operating the plant. Those costs will end up being passed on to the remaining consumers not using solar. The NY Times article points out one unintended consequence:
…the utilities not only lose valuable customers that help support the costs of the power grid but also have to pay them for the power they generate. Ultimately, the utilities say, the combination will lead to higher rate increases for everyone left on the traditional electric system.
“Low-income customers can’t put on solar panels — let’s be blunt,” said David K. Owens, executive vice president of the Edison Electric Institute, which represents utilities. “So why should a low-income customer have their rates go up for the benefit of someone who puts on a solar panel and wants to be credited the retail rate?”
This is a complex issue that deserves an honest and vigorous debate. US states that use net metering are seeing high rates of adoption of solar. In Alberta, Enmax has sold about 250 solar packages so far , although their program is still relatively new. The economics and affordability for consumers has impact. US consumers are seeing economic benefit, Alberta consumers not so much.
The answer for my family now is to work on reducing energy waste. Turning things off when they are not being used. Not leaving computers on all night etc. Then encouraging others to do the same. There are many areas where we all waste energy. As much as we would like to install solar on our roof, the economics are not there yet, for our situation. When that changes we will look at it again.
It would be interesting though for Enmax, an NGO, or government to do a study showing how many homes and businesses need to adopt solar in order to start dialling down coal power plants and what the costs and benefits would be? Knowing how the overall system will adapt to the adoption rates is an important piece of information.
The Enmax program is important in bringing options to the table for people who have the desire and can afford to transition where their electricity comes from.