Taking the Long View: Solar power crucial for the long game

Grid defection they call it. It happens when customers find it economical to say goodbye to their power company and the electrical grid in favour of self-generated power from a solar-and-battery system.

Various factors determine when defection makes sense. New Zealand’s high and ever-rising energy prices play a part, in combination with the continuing reduction in the cost of solar and introduction of batteries. Do the maths and a logical “tipping point” is apparent.

The tipping point comes sooner when power companies reduce the price paid to solar customers – as they have done recently – for excess power they sell back to the grid. And it will come even sooner if other network lines companies follow the lead of Unison (which serves customers in the Hawke’s Bay, Rotorua and Taupo areas) and institute an extra charge on solar customers. Essentially the charge scrapes back some of the savings customers have made through their investment in the technology.

Is Unison’s move anything but a “trial balloon”? Get one company to float it and see what happens. And have a lines companies do it because they have a monopoly in their service area. Stick it to solar users and they can’t switch providers.

A recent report from Concept Consulting Ltd has the same short-term, self-interest, profits-now whiff about it. Entitled Electric cars, solar panels and batteries – how will they affect New Zealand’s greenhouse gas emissions?, it offers a detailed look at the impact of the technologies.

For starters, I’d feel a lot more comfortable if the report were funded by the Royal Society of New Zealand and not by the electricity industry itself (three power companies and three lines companies feature prominently in the credits).

The report is a ringing endorsement for electric vehicles (EVs), but without much enthusiasm for the role of solar. Granted, a switch to EVs is potentially a 100% gain in greenhouse gas emission reductions if the fill-up is from renewable sources instead of fossil fuels. The benefits of a switch to solar are less significant, given the high renewable component in our current electricity mix.

The report notes that increasing energy supply will be needed to fuel a growing EV fleet and proposes that power company wind farms and geothermal can look after it. (It fails to note the long lead time needed to put this infrastructure in place compared to distributed solar power.) And there is no mention that plug in overnight to solar and battery systems at home could play an important role.

The former approach will increase income and profits to the power companies, prolong the status quo, and hasten grid defection. The latter draws on a more diversified renewable mix, gives customers free choice and helps them save money, accomplishing all of this with a lower impact on the environment.

If our ultimate goal is to get New Zealand onto a sustainable and sound economic path, we’ll need to embrace all the options available to us. And we’ll need them all to have any hope of realising emission reduction obligations we agreed to at the Paris climate change talks.

The path to get on is one that leads to 100% renewable sources for our electricity and transport needs. Do this and we can begin to save and redirect the dead-weight $5 billion dollar annual cost of imported oil. We’ll need a large solar uptake to accomplish it. And we’ll need a suite of innovative policies to support it. One thing’s for sure: Actions to discourage and penalise solar are not part of it.

Looking for something beyond a local, industry-funded response to the challenge, I turned to the Rocky Mountain Institute. Based in Boulder, Colorado, RMI is a highly-respected, independent, non-profit organisation committed, as it says, to “creating a clean, prosperous and secure energy future”.

Their recent report, The Economics of Load Defection, sheds some interesting light on the topic at hand. We can head toward one of two futures, it says. Path 1 has an integrated grid; Path 2 is grid defection.

Path 2 will lead to overbuilt and underutilized grid and customer-side resources at higher cost to both. Path 1, on the other hand, includes a pricing structure, business model and regulatory environment where solar is appropriately valued as part of an integrated grid.

“Solar PV and batteries can potentially lower system-wide costs,” the report concludes, “while contributing to the foundation of a reliable, resilient, affordable, low-carbon grid of the future in which customers are empowered with choice.”

Taking the long view, the integrated grid of Path 1 is a win all around – even for the power companies.

Gord Stewart is an environmental sustainability consultant. He does project work for government, industry, and non-profit organisations.

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