re: Rooftop Solar is about to collapse -Time Mag.

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A few years ago, you could usually sell the power for the same rate you pay for it. For example, if you pay 11 cents per kWh to Southern Company, they would pay you the same rate for your excess power.

They have gutted that, usually by saying things like they will buy it back at the cost to produce their energy + a fixed amount (3-5 cents per kWh) or capping the amount they will buy back. On top of that, there are fees and other things they will charge you that eats into any “payback” or ROI for solar.

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To be fair, there are legitimate arguments for why utilities shouldn’t pay the full electric rate back to the customer given how the rates are structured.

I’m not sure about other states but in south LA (at least with Entergy) the “energy charge” on your bill covers basically the entire cost to generate and distribute power, minus the variable fuel costs. That means it covers capital costs (both the grid itself and the power plants), maintenance, day-to-day operations, etc.

The simplest argument is that the grid operator should not have to absorb the entire cost of delivering excess power from someone’s rooftop solar to other customers at a loss. But there are other factors, such as the need to maintain generation capacity in the event that the customer’s rooftop solar system isn’t producing (which is even further complicated by the ongoing shift to renewables for utility-scale generation, which means a portion of the utility-scale generation capacity may also be down if/when that happens).

In theory the offset from excess solar should be roughly the wholesale power rate. Unfortunately there’s not much transparency in the billing rates though, and the residential customer doesn’t really have any bargaining power anyway.