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Are solar panels facing in the wrong direction?

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Almost every rooftop solar panel in the United States faces south, the direction that will catch the maximum energy when the sun rises in the southeast and sets in the southwest.

This was probably a mistake.

The panels are pointed that way because under the rules that govern the electric grid, panel owners are paid by the amount of energy they make. But they are not making the most energy at the hours when it is most needed.

Solar panels thus illustrate how the rules add cost and reduce environmental effectiveness, critics say, because they are out of step with what the power grid actually needs from intermittent renewables like wind and sun, and from zero-carbon nuclear power.

With the existing price structure, “we incentivize maximum power generation,” said James Tong, the vice president for strategy and government affairs at Clean Power Finance, an investment firm. But in most parts of the country, there is 

plenty of electricity available from other sources in the morning and midday. Crunch time is late afternoon, when temperatures are higher and air-conditioners are working hard, and inefficient plants running on natural gas or even coal are cranked up to the maximum. That is obvious from the wholesale power market, where prices reach a peak in the late afternoon. But at that point, the declining sun is hitting the panels at an oblique angle, reducing power output.

“The needs of the grid may mean that they should be pointed west,” more toward the setting sun, said Mr. Tong. That way, a bigger portion of their production would come at the hours when electricity was most needed. But their total production would be a bit lower, and that would hurt panel owners, at least under current rules.

The problem of solar panel orientation is simple compared with other emerging difficulties in the grid.

Some involve the difference between energy and power. The two terms are often used interchangeably, but they are distinct aspects of electricity. A quantity of energy is a bit like the number of gallons of gasoline in a fuel tank, and power is the horsepower of the engine. If four people want to drive from New York to Los Angeles with a load of luggage, 100 gallons might be enough energy for the journey. But if all they have is a motorcycle with a 500-cc engine, they lack the power to make the trip.

With the electric grid, the situation is similar. A small hydroelectric generator tapping a very large lake would produce a lot of energy, but its power is not enough to keep a lot of air-conditioners running. Likewise, solar and wind will produce a lot of energy, but the power they make often does not match the system’s demand, so the contribution to its power needs may be much smaller.

The debate is over how to pay contributors to the grid so the system has an adequate amount of both energy and power. This is not a discussion likely to engage the ordinary consumer with a home electricity bill, but it is crucial to maintaining the stability of the system as the shift from fossil fuels proceeds to ones lighter on carbon.

Solar panels and especially wind turbines produce vast amounts of energy, but on their own schedule, when the sun is shining or the wind is blowing. The more conventional installations — coal, natural gas and especially nuclear plants — earn their keep by selling energy around the clock. Put enough wind and solar units on the grid during the hours when they are running and they flood the market and push down the hourly auction price of a megawatt-hour of energy.

Sometimes the price goes to zero. Oddly, it can go even lower. When demand is very low in the middle of the night and the wind is blowing hard, there may be too much electricity on the system and grid operators will charge generators that want to add more. Nuclear plants cannot quickly modulate their output so they are, in effect, fined for production. But wind farms still make money because they earn a tax credit for each kilowatt-hour they generate.

The problem is especially acute for nuclear reactors because their costs for fuel are roughly the same whether they are running or not. They are refueled on a fixed schedule, not when the uranium is used up. Their labor costs, mortgage costs and maintenance costs are roughly the same, too. But if the hourly price for energy is suppressed by wind and sun, suddenly the nuclear plants can’t make enough money to keep running.

Thus some have already closed and more are threatened, even though carbon dioxide limits are unlikely to be met without them. Even relatively clean natural gas plants are hurt; they are generally on the margin, the first to shut when new solar comes on line.

Revenue at the Robert E. Ginna Nuclear Power Plant on Lake Ontario in upstate New York is down because cheap natural gas and expanded renewable energy have depressed the market. CreditHeather Ainsworth for The New York Times

The 40-year-old Robert E. Ginna Nuclear Power Plant on the shores of Lake Ontario in upstate New York is becoming an example of an emerging trend. Its income from selling energy is down because cheap natural gas and growing sources of renewable energy have depressed the market.

But the reactor provides a second service beyond energy: dispatchable power, meaning the ability to support electric load on demand. And its owner, Exelon, argues that it is not paid enough for it.

“When we devote so many of our economic resources and our policies to the type of energy that produces power but not power on demand, we end up in a place where we start losing the megawatt we can control,” said Joseph Dominguez, Exelon’s senior vice president for governmental and regulatory affairs. “We’ve moved to a system focused on resources that provide energy when they want to.”

Not everyone agrees. Most electricity markets have auctions not only for energy but also for capacity; utilities serving homes and businesses make what amounts to payments to assure that electricity will be available when needed.

“No planner, no regulator and no utility is going to leave themselves capacity-short,” said Ron Binz, an energy consultant, renewable energy advocate and former head of the Colorado Public Utilities Commission. What the renewables are really doing, he said, is “changing the valuation of baseload plants,” like nuclear and coal plants. A nuclear plant can barely change its output, and a coal plant can do so only within certain limits. A system that must compensate for rising and falling wind and solar generation makes the flexible plants, like those using natural gas, more valuable, he said.

And he and others noted the emergence of a substitute for generating capacity: “Demand response” providers, which sign up customers willing — in exchange for a payment — to have their air-conditioners or industrial machines turned down or turned off by remote control at peak hours. These providers are paid by the companies that have to buy capacity. Conventional generators, eager to maintain their revenue, persuaded one big electricity market to limit the use of demand response.

The argument over how to value capacity and how to value energy has an echo in the debate over payments to the owners of solar panels at the retail level. In most states they get “net metering” — that is, if a utility charges them 15 cents a kilowatt-hour for energy, it pays them at the same rate when they produce. The payment relieves the panel owner of all the other costs of electricity — maintaining capacity for hours when the sun does not shine, and moving the electricity from the producer to the consumer, all wrapped into the retail rate that consumers traditionally paid, and that now the utility pays the panel owner.

The homeowner with panels on the roof may think he or she is disconnected from the system, when in fact the connection has become stronger, making the household a supplier as well as a consumer of energy, and a consumer of all the grid’s other functions, like capacity, transmission and distribution.

All the various generators connected to the grid — now including rooftop solar, and “microgrid” owners who generate on their own but use the grid for backup — are going to have to share some of the costs, predicted Martin E. Shalhoub, manager of business development for ABB’s Power Consulting business. But with utilities trying to maintain profitability, and green advocates trying to encourage solar and other distributed generation, the argument will be complicated.

“Not everybody is going to be happy,” he said.

View original article in the The New York Times

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