Alt Energy Chapter 2 – Net Metering

I the vast world of alternate energy, it is hard to find a starting point for which every day citizens can do their part in the expansion of this sector.  In the coming years we will see growth in infrastructure, research and development, technology, exploration, and various other fields that will require a certain degree of specialization and education.  This unfortunately will fall outside of the scope of the broader population’s learning curve.  In fact, it will likely leave a large percentage of the population far too under qualified to be productive members of it.  With that in mind, they will still need to be compliant in aiding this sector, regardless of their qualifications.

So how does this happen.  How do you educate an older generation on becoming part of this new generation, or at least serving a role in it.  Likewise how does the new generation learn the fundamentals of the older generation when they’ve grown up in such an entitlement era?

From my perspective as someone who grew up right in between the two generations I described above, I believe the most effective way to approach this is with separate but related short and long term views.  From a short term perspective, the two most basic areas that stand out as places we can ALL chip in are:  Auto and Home.  (It’s fairly obvious to say this)  From a long term perspective, education will stand paramount to the success and evolution of our economy.  With those basic premises in place I will now flesh out how I believe we can most effectively hit the ground running.

Net Metering

The Green Revolution will have many micro revolutions contained within itself.  In the grand scheme of things, cars will be running electrically, homes will be self sufficient, energy will not be wasted, storage will be minimized, free market energy networks will be created and most important of all…  Conservation will be encouraged through real life incentives.  …and all of this will be born from the seed of 1 simple little device/concept…  Net Metering!  Sure these things already exist, and can evolve on their own…  but I am here to say that the course of these major evolutionary/revolutionary steps will be changed and guided by the simplest of things.  For lack of a better analogy, (and what may prove to be a perfect analogy) the home computer was an amazing tool that took on a whole new life with the assistance of 1 simple thing.  The Internet!  A simple phone line jack to a port in your PC meant access to “the grid” of information.  The Net Meter will be that same conduit to which the home will become an interactive member of “the grid” of energy.

In its most basic terms, Net Metering is best described as the “net use” versus “net creation” of energy within a household.  Utility companies already provide Net Metering devises for homes that have the ability to create energy.  (Solar is the most common source.  …but wind, bio, hydro either already exist or will soon.)  Rather than just create or harness energy for your own house, (which then gets stored and used as you go) this net meter allows the excess energy that you’ve captured to flow out into the energy grid.  While this energy flows outward, your meter runs backwards.  When you use more energy then you are creating, the meter runs forward.  …and at the end of the billing cycles, your net inflow or outflow is either paid or charged to your house.

Competition: (energy cost/price of the free market)

Currently, the utility companies across our country are regional monopolies.  When your net meter comes to a negative (outflow), the energy provider pays you pennies on the dollar in relation to what they charge you for a net positive (inflow).  This can easily be justified by the utility companies since a Net Metering Homeowner does not bear the cost of the energy grid.  (servicing, maintenance, employees, R&D, etc…)  This is where competition comes in to set the correct price that utilities could or should pay.

Based on the basic logistics of household energy:  During the day while the sun is strong, houses are generally using little energy.  By taking that energy and exporting it, you are minimizing the need for energy storage.  Then at night, when the house is most commonly using more electricity, you then pull back from the grid what you need.  During summer months, when the energy grid is pushed to its extremes, houses will also be producing much more energy with greater sun exposure.  With that in mind, we would want to transfer energy use to places that are using energy during the day.  The prime locations for dimporting daytime energy use are to transportation and business.  This leads us to the next steps, which will be a smart/er energy grid.  Local “Intra-Grids”

At a local level I see the most potent brokers of this Intra-Grid as Oil companies/nations.  Aside from the obvious “reinvestment back into America”, and the marriage of their commodity to its eventual replacement, gas stations are already strategically placed around the US (and the world) as logical locations for power absorption and redistribution hubs.  Their local placement would help maximize lost power from lengthy distribution points.  By Gas stations evolving into local power / recharging stations, they can offer their local community another option into the free market energy sales.  This would give the Net Metering homeowner an option to weigh, as they would then decide which would be more profitable. This would also lead to you local utility monopoly offering you a more accurate rate of return for production versus conservation.  (Brokering this deal with potential suitors for Intra-Grids will turn out to be a costly investment that will likely reap substantial long term rewards of continued energy demands.  I look to explore these options heavily within the BrainTrust / EA community for those on board and interested.)

Conservation:  (Resolution – Incentive = Failure)

The greatest trick the older generation owns in the modern era of energy consumption, is knowing how to exist with little to no energy consumption!  (or living within their energy means)  Its lesson will be learned by generations that have only known infinite supply.  To best establish this lifestyle of living within your energy means, there can be no greater incentive then a “hard dollar” profit for conservation.  Current programs that are already being put into place like smart meters (in California) will teach homeowners about their energy use, but lacks the real life incentive to alter lifestyle changes as the gain is a “soft dollar” one.  (I can walk to the train and save $4 dollars.  …or just swipe my card, ride the train, and get charged $4.  This is “soft dollar savings”.  If I had an option to walk to the train, and get paid cash upon arrival of $4 when I got there…  I would likely be more inclined to not swipe my card and ride the train!  This is a “hard dollar gain”.  From a psychological perspective, the hard dollar gain is more attractive, (even though technically there is no real difference) …but for the exception of “competition” which the free market would set to a better price of potentially $5, $6+ for walking, thus making it a no brainer beyond just the psychological desire.)

Storage of Energy / Transportation of Energy:

Two of the larger problems that the green revolution faces are storing energy and or transporting it through the grid without losing too much power.   By using power and transporting the excess, you are either minimizing or eliminating the need for storage.  The cost to savings ratios are instantly maximized when additional expenses like these are minimized.  With less need for production, creation and supply of the extra/unnecessary storage units, we win environmentally and become better situated to put those raw materials to more efficient use.  Likewise, with the current grid, transporting energy (electricity) over long distances has a wasteful loss associated with it.  An average rate for transmission and distribution loss is over 7%.  Shorter neighborhood Indi-Grids would instantly cut the losses by connecting to these local power/refueling stations to the neighboring sources of power.

In the interim prior to the creation of a car that recharges while driving, the refueling stations will just switch from providing gasoline, to providing new charged batteries, or actually charging your existing batteries.  (the evolution of these stations will have to be well coordinated with the auto industries concepts for refueling)  In the long term, rail transportation, both human and freight will eventually be the ultimate recipient of this localized power.)

Turning your house into an asset rather then debt center:

The Asset:

As a worst case scenario, if your house at least provides you the ability to sustain your energy consuming necessities, then the homeowner profits from the energy creation.  If net metering actually affords you the ability to turn your house into a profit center, where you are rewarded with the best returns the free market could provide, and profit incentives heavily promote conservation and efficiency…  then we all win!

The Debt Center:

When the asset that is supposed to be the “safest” long term investment turns into the “riskiest” investment someone could make, then there is something structurally wrong with the economy and the investment.  For the prudent home buyers who saved 20% (the standard “safe” buying practice) of the value of the house they are looking to purchase, only to see that principal value washed away after it’s purchase, then effectively, the home owner is wiped out in what amounts to nothing more then a bet of red or black at the roulette wheel.  For this asset to not be put to productive use compounds the debt center it has become, since all it will do is continue to drain your savings through the power grid.  For this debt to be allowed to compound its loss, it demands an immediate reevaluation as a useful entity.

For those who feel this concept is too far out of the box, or too far in the future…  I believe it is time that you must take a moment to reassess your views.  The time is now.  The economy, and your way of life is about to change.  It is the speed at which you adjust your way of thinking and embrace the next logical steps of the necessary evolution we must make towards energy efficiency, will shape the future path we need to be on.  This is only enhanced by the relation to the depreciation of our current assets and the loss in opportunity cost by us not taking advantage of these forward thinking prospects.  Just like we saw the coming effects of this economic downturn, but sat indifferent on the sidelines, the eventual global impact of our indifference will lead to an environmental downturn that will not be accompanied with a stimulus package.  Mother Nature will not bail us or our children out.  She is a cruel bitch.  A terrorist of our own creation.  …and the excesses we know we are abusing, yet do little to nothing to alter, will be more catastrophic then any economic disturbance.

 

All the best,

Miss America

P.S.  Education  (long term investment)

The construction of this new arena will be created in the world of engineering.  Civil Engineers need to know how to recreate or refurbish all aspects our infrastructure.  Electrical Engineers will work the grids, create efficiencies, and develop new technology.  Mechanical Engineers will design the cars of the future.  In the vast world of educational opportunities, I feel that someone looking for direction would be well suited to at least consider exploring the hundreds of engineering fields that exist, and see if they appeal to their interest.  I see opportunity knocking very hard on this door.

17 Responses to "Alt Energy Chapter 2 – Net Metering"

  1. TfT   February 5, 2009 at 10:45 am

    First!(I guess the rule of First at Professor’s blog also applies here?! ;) )

  2. 2cents   February 5, 2009 at 12:16 pm

    @MAIt’s good to see someone working at the edge. While I applaud your efforts, I know that you like to look at the near term financial plays that come out of such thinking. With that in mind, I think you will find that “net metering” will not repay the initial investment and maintenance for 20+ years. This will require upfront capital by those who decide to self generate. With such a terrible payback time line, this will in effect become a loan to those unable to meet the upfront capital requirements.Furthermore, there are technical issues with back feeding the grid. It can be done in small doses and with individual considerations for each grid-tie currently, but if many try it, the grid will get a big bellyache. There are safety, current flow, phase synchronization, and load management issues that will require a complete rethink on how customers interact with the grid.Unfortunately, I think your older generation remark will be the near and medium term play. Specifically, variable rate metering will be the upcoming norm. You’ll pay more when capacity is strained and less at other times. Self generation will only make sense when you require peak usage and can generate it @ an equivalent cost to what you’ll have to pay.Variable rate metering will immediately alter the daily life of most Americans. Suddenly what you do will require also considering when you do it! Variable rate metering can be implemented now with virtually no changes in the current grid, and it will drive a huge portion of the savings with negligible upfront investment. I suggest people take a basic course on home energy usage and how to manage it in a variable meter rate world!

    • Free Tibet   February 5, 2009 at 5:10 pm

      I can see the problem if anyone and everyone can put elect up at will. Really hard to build a grid for that. Phase synchronization – right. Serious problem for small generators. Costly.Yes, variable rate metering should be the 1st step.

  3. Hellasious   February 5, 2009 at 12:29 pm

    Smart meters are already a reality. Several utilities are already installing them and at least two major manufacturers are clawing at each other for market share (Itron and Landis&Gyr).Furthermore, a clutch of start-ups are also going at it from the systems integration/software angle

  4. Sean   February 5, 2009 at 1:02 pm

    Miss America, can you recommend a few good stocks to buy? Of course, the risk is on me.Thanks!

    • MA   February 5, 2009 at 1:37 pm

      I’m not big on any stocks right now. I’d look into big names that are seriouslly depressed and likely to somehow avoid nationalization. (thus burning the equity holders)I’d take a look at the 2 companies Hellasios mentioned above. (I don’t know anything about them? …but I have a high level of respect for Hellasious’s views/research. It is far better then mine.He/she runs a website Sudden Debt that is a MUST READ!If I were to gamble (and stick with DOW large cap), I’d take Ford, Alcoa, PG, and a host of other biotech/med related stocks.(my view for a couple of them would not be based on strength, but rather the depth of their fall so far.)Good luck, MA

  5. Guest   February 5, 2009 at 1:32 pm

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    • Guest   February 5, 2009 at 1:33 pm

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      • Guest   February 5, 2009 at 1:33 pm

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  6. Guest   February 5, 2009 at 1:51 pm

    Can we get rid of these silly distractions (long blank comments) and maybe block the IP.

    • Guest   February 5, 2009 at 3:54 pm

      I just made the same request.MAI could see if there was a joke at the end or something… but instead it’s just painfully unoriginal.

  7. Free Tibet   February 5, 2009 at 5:01 pm

    The utilities have a point about the buy/sell differential. I can make elect here with diesel and sell it for profit – because the grid comes to my door. The generator is no big deal. Getting elect to my neighbor is more expensive. Also the problem of smoke and well, diesel. So, it’s not something that should scale up beyond emergency use. Though an adjustment might be in order if I were using a non-polluting source. Transmission efficiency and grid efficiency could both be increased by locating production closer to consumption. But NIMBY!We can dream about elect cars, but the best thing I can do now is to leave the car in the garage. And the most encouraging thing I’ve seen in the economic news recently is that people are doing that. Miles driven down 3+%. We should work on that. There is more room for savings there and ROI should be better. 4 day work weeks?About the generational thing. Those of us who went through the embargo of 1973 haven’t forgotten. I can’t explain the resurgence of the gas guzzlers, but you’ll probably be surprised how fast that generation comes around.

    • MA   February 5, 2009 at 10:37 pm

      Hey FT,I hate to recomend movies as a source for information… but I’d seriously suggest the movie :Who Killed The Electric CarThis movie should be mass produced, and mailed out to every home in America. (it saves time for actually doing the research that the general public just doesn’t want to do. Knowing that that technology isn’t 20-30 years away… but instead 15years old is MIND BLOWING!!!The beauty is seeing actually video coverage of the collaboration of our politicians, the governments, the auto industry, and oil nations… working together to destroy the most amzing alternative that has already been created. Just to keep their cartels in place!!!If you’ve never seen the flick, please rent it. (it’s an indie film) You’ll want to punch a whole lot of people in the face after you have!…you’ll want to do this because you’ll be ashamed about how this blatent manipulation and control has no only been allowed to happen… but instead become ACCEPTABLE!Miss America

  8. r0tiNeK   February 5, 2009 at 7:16 pm

    Great Post MA! This is the future. A greater level of Independent Self-Sufficiency, which in turn helps the Centralized systems live for longer. I can’t see the US electricity grid survivng another 10yrs unless more & more homes become more self-sufficient. Each Home does NOT have to produce 100% of it’s energy needs, but the more self-sufficient & independent it is, the LESS stress we are placing upon the Centralised system (i.e. mains electricity supply).Here in Australia we are lucky to have alot of Sun (although unlucky that it causes drought conditions). On our Farm we have Solar Hot Water (Hot water accounts for 25% of your electricity usage) and we will be getting Solar Electricity when the next Generation photovoltaic Solar panels are made available to the Public. We also have ALOT of rainwater storage tanks which catch the rainwater off our home and 2x sheds. We use this water to grow our own vegetables, fruit trees & nut trees. Permaculture is where all of this is headed. The Centralized systems are about to disintegrate & de-centralise. Localisation & Independent Self-Sufficiency is the new Paradigm. & it’s better for the planet, too! EMBRACE IT!!!!!! : )

  9. blindman   February 6, 2009 at 12:09 am

    ma,here is an idea. not well thought out but.. here it is in it’s untarnished and naked beauty.you talk of debt centers. and propose gasoline centers as logical locations for intra-grid locations. maybe problematic, for one, many of these operators are currently finding sustaining their current operation nearly impossible. the major oil companies are getting out of the retail business (too expensive, liability, compliance, taxes, labor) in favor of refining and wholesale distribution. the local stations are being operated by independents with no deep pockets or access to futuristic credit.alternate location. 1) local public schools.2) the banks. both are receiving tremendous systemic funding. both are ubiquitous and currently operate on generous spacial allotments. also, both currently spend astronomical amounts of money per day, month, year just to heat and light their interior spaces. usually with fuel oil or natural gas. ( new york area ).i calculate, crudely, that a local elementary school in my average lower middle class neighborhood spends approximately $900.00 a day, 450 gallons at 2$ per.for heating. say $5400 a week, heat down on weekends, 20 week season? $110,000 – $140,000? bill for the year. there are say 10 such schools in the district. heating for the school district would appear to be in excess of 1 million dollars.none of these schools, all with large properties and large roof surface areas , has a solar panel. all are supported by the taxpayers whether they have children or not.debt centers. intra-grid locations?speaking of socialism, same is true for government buildings in general. offices, county seats, state buildings, transportation yards, public works properties and public parks.and speaking further of socialism, the largest buildings, great surface area for solar panels, in every city, the banks.debt centers. intra-grid locations?ps. this is not a pre midevil joke!!so you can stop laughing.pss. and the conversion to the new energy science and economics could be taught, first hand at the institutions themselves.!sounds like a win win situation, i guess that means it is doomed.?pss. great forward thinking article. congratulations..http://www.squidoo.com/speth.with a video.!

    • MA   February 6, 2009 at 8:31 am

      Well done.Can I tell you how much I like the idea of banks being that location!!!As for schools… I think that has been brought up consistantly as location for solar panels to turn schools self sufficient. (are you on the school board? My sister is and generally figures out that same type of stuff, then offers solutions, then gets shot down… and business as usual persists!)…it’s a waiting game until it actually happens!Our waste is epic! …because the people in charge want it that way. (this is why I’m also convinced our economic situation is not as bad as some might think. …because there is so much room to wash out the waste, prior to us walking around with a cow and a fishing pole.)Thanks for stopping in.Miss America

  10. ptm   February 8, 2009 at 2:17 pm

    MA,1) The goal of full-electric or Battery-Electric Vehicles (BEVs) should be to replace foreign oil consumption with domestic energy (coal). This will provide a direct and immediate reduction in our trade deficit and thereby improve the our ability to pay off debt. Other issues are less of a concern in my opinion.2) Majority (greater than 95%) of driving is stop-and-go and less than 40 miles per day. A 25-35kw BEV can be charged overnight and travel 100 miles. Driving a BEV is fully comparable to driving a gasoline powered vehicle.3) Gasoline vehicle efficiency is about 15%. Electric motor efficiency is about 95%; however, the two modes have a similar efficiency of 15% when one considers electric generation, transmission, chemical energy storage, and conversion from electrical to mechanical energy.4) Even with coal generation, BEVs generate 1/3 the carbon of a gasoline vehicles; moreover, carbon sequestration can use economy-of-scale at the power plant, yet directly apply to BEVs.5) Low-tech (lead-acid batteries and DC motors) BEVs are more economical compared to gasoline powered vehicles. Assuming a $2-4/gal range for gasoline, BEVs have a cost equivalent of $1.50/gal, which includes the cost of replacing batteries. High-tech (lithium-ion batteries, AC motors, regenerative charging, and capacitor banks) have a cost equivalent closer to $5/gal.6) Late model, high-mileage SUVs and Vans have chassis can accept the weight of lead-acid batteries and can be easily converted into BEVs for $10,000-15,000 and provide “guilt-free” around-town kid transportation for soccer moms.7) This technology now exists and can be readily scaled up for nation-wide production.Let me know if you want more details on this subject.