I do realize there is loss of revenue for the power that is not consumed. However, it is more beneficial for the power company to still be connected, rather than have the panels disconnected from the grid.
I cannot edit my previous comment, but would like to clarify and say that the profits on the energy put into the grid from locally produced solar panels are higher than they would be from centrally generated sources.
Profits for solar companies increase, not decrease, as solar panels are added to the grid (to a point). Even if the power company cuts a check to someone when they produce more than they consume, they still save money on transmission.
One third of power lost is in the transmission. When solar panels are used, power is distributed locally, with lower loss in transmission. In the mean time, the end consumers still get charged as if the transmission was over the full distance. It costs the power company less to allow the producers on the grid.
Where electricity markets allow for peak hour price increases, usually during the day when AC is blasting and solar production is at its peak, power companies do not need to pay producers full market rates. They can arbitrage the solar power, making additional money without additional cost.
In areas like California where in state production is not enough to meet demand, power companies must purchase from out of state sources at higher rates. The long distance transmission losses is on their dime, resulting in higher costs for the power company.
As solar production exceeds total demand, the economics change. However, in current US markets, having additional solar power on the grid is more profitable for power companies. I can certainly be wrong, but I'd like to see counter examples.
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Re: Re: Re: Whiskey Tango Foxtrot
I do realize there is loss of revenue for the power that is not consumed. However, it is more beneficial for the power company to still be connected, rather than have the panels disconnected from the grid.
I cannot edit my previous comment, but would like to clarify and say that the profits on the energy put into the grid from locally produced solar panels are higher than they would be from centrally generated sources.
Re: Re: Whiskey Tango Foxtrot
Profits for solar companies increase, not decrease, as solar panels are added to the grid (to a point). Even if the power company cuts a check to someone when they produce more than they consume, they still save money on transmission.
One third of power lost is in the transmission. When solar panels are used, power is distributed locally, with lower loss in transmission. In the mean time, the end consumers still get charged as if the transmission was over the full distance. It costs the power company less to allow the producers on the grid.
Where electricity markets allow for peak hour price increases, usually during the day when AC is blasting and solar production is at its peak, power companies do not need to pay producers full market rates. They can arbitrage the solar power, making additional money without additional cost.
In areas like California where in state production is not enough to meet demand, power companies must purchase from out of state sources at higher rates. The long distance transmission losses is on their dime, resulting in higher costs for the power company.
As solar production exceeds total demand, the economics change. However, in current US markets, having additional solar power on the grid is more profitable for power companies. I can certainly be wrong, but I'd like to see counter examples.