Power Failures, Dynamic Pricing and The Future of Small Contracting

Article RoundupIndustry Issues

Opinion: More solar panels and battery storage at homes could prevent power failures

By Barry Cinnamon for The Mercury News

Cinnamon makes the link between power outage prevention and solar/battery backup clear. He states that while this tech provides electricity for households it also functions as a buffer for transformers by directing excess solar or battery power back to the local grids, rather than straight to nearby transformers (which can overload and fail). He points out that heavier demands for energy due to higher temperatures and more EVs are increasing power outages in CA and that modernizing local grids would address the problem.

Cinnamon states that encouraging homeowners and businesses to install BTM solar and storage systems would avoid the need for expensive grid upgrades that would otherwise fall on utility ratepayers. He highlights two important policies that would help lower the barrier to solar adoption: no limits on customer ability to install solar tech and the reduction of up-front costs of battery storage systems.

Key quote: “Power was out in my neighborhood for about 12 hours while PG&E deployed a crew to diagnose the problem and replace the transformer. But the blackout would not have happened if just one more home in the neighborhood had a solar or battery storage system.”

Beyond TOU: Is more dynamic pricing the future of rate design?

By Herman K. Trabish for Utility DIVE

In this article Trabish assesses the merits of dynamic pricing, often in comparison with time-of-use rates, by citing consulting groups and various consumer advocates. His research highlights the limitations of TOU rates with regards to reducing peak demands. He states that these rates offer too small a daily price differential.

Trabish points to the merits of dynamic pricing, “alerting customers to steeper increases in per-kWh rates in advance of specific peak demand events,” which results in increased reductions when highest demand days occur. This system guides customer usage more effectively because it closely aligns actual pricing and costs with price signals. Not only does this aid consumers, it also helps utilities more easily assimilate renewable energy and lower their generation and distribution costs.

Trabish’s research does demonstrate, however, that advocates are mixed on the suitability of dynamic pricing. He points out that while consumers show a willingness to adjust to different rate structures, issues like off-peak price to peak price ratio and rates set up to be revenue neutral present problems. He discusses how dynamic pricing would adequately address looming concerns like over-generation and afternoon load ramps but could also mean a lower volumetric portion of rates and and adverse impact on lower income customers. Trabish also goes on to describe some successful dynamic pricing programs in the US.

Key quote: “TOU rates solve yesterday’s problem. The future is dynamic pricing enabled by smart technology that brings variable renewables and DER onto the grid at the right time and the right price.”

Note: One of my subscribers had this to say about dynamic pricing and TOU: “I’ve been selling with TOU in CA since 2001. It’s standard now in CA, easy to explain, but much too complicated to analyze for residential customers. Our software uses rules of thumb to estimate savings with solar and with batteries…TOU is a stepping stone. Dynamic rates are the future, but utilities don’t want them since they will make less money… Nobody is using these rates yet, but it is the most logical approach. Bitcoin payments and micro-grids will provide the infrastructure once utilities are beaten down sufficiently.”

Are Small Contractors the Future of Solar? Pamela Cargill Weighs in on the Industry’s Evolution

From the Aurora blog

Aurora interviewed Pamela Cargill, longtime industry expert and consultant with Chaolysti, regarding the future of the industry for smaller contractors. Cargill states that small contractors will  experience some significant growth in the near future and that the solar industry in general will start to resemble the more established and sizable HVAC industry. She predicts that the most successful contractors over the long run will be the ones with the long-term vision for their customers and business.

To begin to more closely resemble traditional trades like HVAC, Cargill asserts that contractors need to be more focused on running an effective contracting business than sales and marketing. Part of this effectiveness involves using automation to carefully track customer follow up during the sales process and beyond and automating the design process, particularly around the more routine aspects of it. Finally, she talks about the real need for operational effectiveness, something not quite so vital in the past when many contractors were muddling through a bit, making things up as they went along.

Key quote: “I think as we’re moving into the future, it’s really going to be worthwhile for us to look much more at how are other contracting businesses operate. What are the best practices from those spaces that we could bring over? Whether it be in terms of project management, scheduling and dispatching, long-term customer support, service plans, keep in touch, re-marketing, etc. That’s really what’s going to start driving excellence in this business in the very near future and going forward.”

States Can Recharge Rooftop Solar

By Bloomberg View Editors

In this article the authors argue that state regulators need to take steps to rescue rooftop solar from a decline in the near future due to power companies’ campaign to end net metering. They state that solar power is subsidized: rooftop solar users get a deduction for their monthly electricity charges and utilities pay retail for rooftop solar, with no accounting for grid costs. And given the benefits it means for the environment, the authors believe this subsidy should continue. But they call for a national carbon tax that would incentivize utilities to buy rooftop solar and equal things out. It would also eliminate the need for net-metering. The authors point to NY’s model as an example of striking the right balance for utilities and solar users and assert that eventually battery storage and falling costs for solar will eclipse any need for net-metering.


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