Month: April 2021

A: Yes, but probably not the whole house, probably only the circuits you would power from an emergency generator. Since solar panels must, by law, disconnect from the grid during power outages (to prevent the linemen getting electrocuted by your solar power) you will need to install a re-connect switch at your electrical panel just like that for a back-up generator. This usually needs to be installed with a battery, but when the grid is out and the sun is shining you will be powering the house from the sun. Nice. I intend to do this on my house this year.

Hi Bob, 
This point is often debated but it does have a bit of a “how many angels can dance on the head of a pin” quality to it. At the end of the day, RECs and SRECs help to fight climate change and I am not about to argue against them.

The generalized version of the debate over who owns the zero carbon claim on a REC is: whoever pays for the carbon footprint reduction is the rightful owner of the claim that they have cut that carbon footprint. This has some logical sense to it, if I pay for a car I own it including the right to brag about how good I look while driving it. The federal government subsidized 30% of the cost of my arrays. The SREC subsidy was for about another 30%. Net metering subsidized more than the remaining 40%. Net metering is the biggest of the subsidies because I am paid 23c/kWh for my electricity when the wholesale price for electricity is about 12c/kWh. I paid very little of the overall cost of my arrays. An economist would argue that since the NPV is positive at a 3% discount rate that I have actually paid nothing for my arrays. The total subsidies exceed the total cost. I agree with the economist. I have not paid anything for my solar panels, I been paid to own my solar panels.

By this logic, the cut in my carbon footprint should be owned 30% by the federal government, 30% by the purchaser of the SRECs (whoever that may be) and about 40% by Eversource because it pays the excess price to me for the net-metering. Logic then, requires that Eversource claims it owns 40% of my carbon footprint reduction, not 100%. And the 40% claim is because of the net-metering subsidy not because I have sold the SREC. Unless Eversource can prove that is has actually bought my SRECs (and not somebody else’s) it has absolutely no basis for claiming that I cannot claim my zero carbon production.

So, logically the argument that Eversource owns 100% of my claim to zero carbon electricity is invalid. At best it has a claim to 40% and not because it bought SRECs.
An exception to this would be if the various parties had contractually agreed to split the bragging rights. Some contracts do explicitly say who has the bragging rights. But mine do not. The federal government could have claimed to have 30% (or 100%) of the bragging rights in return for the tax credit, but I have not made any such agreement with the federal government. Neither have I made any such contractual obligation when selling my SRECs through my aggregator, nor with Eversource in my net-metering contract.

Furthermore, the argument that Eversource owns the bragging rights to my zero carbon electricity is not only logically flawed, it does not pass a basic legal test of ownership. A restaurant does not claim it owns half my meal if it gives me half off the usual price. The fact is that I get to eat the meal no matter who pays for a subsidy in order to buy it for me. By analogy, the owner of the array (not the one who subsidizes it) is the one who has the right to make the claim about cutting the carbon footprint. I am indisputably the owner of my solar panels. I wrote the check to the installer for the full $75,000 purchase price. My solar panels are not owned 30% by the federal government, 30% by the owner of my SRECs and 40% by Eversource. I own my array lock, stock and barrel, including the right to sell it to someone else, and all bragging rights associated with the zero carbon electricity it produces. 

So, in my opinion, the argument that the purchaser of an SREC (in the absence of an explicit agreement to allocate the bragging rights) has the right to claim that it has cut its carbon footprint fails both the logical test and the legal test of ownership. I own my solar panels and I have the sole right to claim that I have produced electricity with a zero-carbon footprint. No one else has any such claim, even those who have subsidized the cost of buying the solar panels. 

Again I look forward to your response Bob. 

Question: Hi David, I really enjoyed your talk last week on your zero-carbon adventure. I did have a question, which didn’t get answered. I have a friend that works at National Grid and she told me if you sell your solar RECs, which I believe you did, you cannot claim to be carbon free as those rights go with the REC? After your talk, I went back to her and she felt that this was definitely the case and that you would need to buy RECs to offset the ones’ you sold, to make the carbon free claim and you should also tell people you sold your RECs and brought other ones. 
Just wondering your thoughts on this 
Thanks and thanks again for a wonderful talk. I plan to share this with some folks 

Hi Rob, I have occasionally heard this perspective before, and I think that reasonable people can disagree on this one.

I have two concerns with your friend’s perspective. 

The first is that I have not counted either RECs or SRECs in my calculation of my carbon footprint. I am not offsetting any of my carbon footprint with credits such as SRECs. I have actually cut my carbon footprint to zero by using the fab four. It is Eversource (our electric utility company) that is claiming it has cut its carbon footprint when it has not done so. So, I think it is more accurate that I say I have cut my carbon footprint to zero and it is Eversource that has been allowed by the state regulators to claim it has cut its carbon footprint (by buying my SRECs) when it has not done so. But I have genuinely cut my carbon footprint and it is zero. The SRECs have not been counted in any part of my carbon footprint reduction. My carbon footprint is zero because I no longer burn heating oil and I generate all my own electricity, including that to heat my house, using heat pumps, powered with zero-carbon solar panels. 

My second point is that, where I do count the SRECs is in the financial subsidies. I genuinely receive this cash, so I do not think it is right to remove it from the financial forecasts. There are many subsidies involved in going zero, from net metering and zero-interest loans (which are essentially funded through all of us in MA paying the highest price for electricity in the US, other than Hawaii) to federal and state tax credits. SRECs are calculated per kWh I generate. The federal tax credit is calculated based on the price you pay for the solar system you install. Why should one subsidy not count just because it is based on kWh generated rather than on the price of the solar system? In 2018, SRECs were replaced with SMART and so it is only owners of legacy systems that receive them. I do not see why a subsidy should be dismissed for those who installed systems prior to 2018 but should be allowed for those who installed systems after 2018. 

In my opinion, SRECs are just a form of subsidy, paid from a regulated utility to an owner of solar panels, which means they are ultimately paid by all electricity customers because that regulation has been imposed on the utility company by the state. . This is essentially a regressive form of taxation because it takes money from everyone who uses electricity (including poor people) and funnels it to those who can afford to install solar panels which tend to be wealthy people or investors. I think this is rather unfair, but I do not make the laws Rob, I just abide by them.

Please share these thoughts with your friends, I am interested to hear what she says. 

As of November 16th 2020 I have not heard back.

A: In one sense the cost is indeed zero. You do not write checks for the electricity produced by your solar panels so in that sense it is zero. However, a more common definition is the Levelized Cost of Energy (LCOE) which is the upfront cost of the array divided by the amount of kWh it produces over its lifetime. This works out to be about 5c/kWh if you have a sunny roof and about 10c/kWh if your roof is in about half shade.

Q: Can you discuss the embodied energy and natural resource use of the active systems, such as solar panels, that are necessary to achieve a “net zero” status? 

A: The embodied carbon footprint of solar panels (i.e., the carbon dioxide released by making the panel) is about equal to 18-months’ worth of the carbon footprint avoided by generating zero-carbon electricity. So, from a carbon-footprint perspective, you can think of the solar panel paying for itself in about 18 months. Financially, ours will pay for themselves in about 6 years. 

A: When my Tesla is charged from my solar panels (which generate electricity at about 8c per kWh) I can drive for 2c per mile. A gasoline-powered car getting 30 mpg on gas at $3 a gallon costs 10c per mile. It is 80% cheaper to drive on solar power than on gasoline!  And that is without even mentioning the zero-carbon footprint of driving my Tesla on solar power.

Q: Do you still prefer installing solar panels rather than purchasing 100% clean energy from National Grid through suppliers like Eligo Energy. 8.9 cents/Kwh for 6 months. Have you done a financial analysis of paying 9 cents to 14 cents/kwh to receive 100% clean energy from National Grid compared to installing solar panels on roof?

A: I am assuming that the 9c per kWh is the cost of generating the electricity. Utilities charge separately for distributing that electricity, often about 12c per kWh in MA. This means that you actually pay about 20-24c per kWh after you add in all the other charges, including the $7 a month they charge you for being a customer. When you add solar panels you eliminate the entire bill (except the $7 a month which is effectively what you pay for maintaining the option of drawing power from the grid when you need it) so your cost drops from 24c/kWh (what I am paying today for Eversource electricity) to between 4c and 11c depending on how much shade you have on your roof and which subsidies you get. So, generating your own solar power is far cheaper than even the generating cost of electricity from Eligo, let alone the full cost of that electricity.

If your roof is so shady that solar panels on your roof will generate electricity at more than the full cost of electricity from your utility (21c/kWh in the above example) then buying 100% clean power may make sense for you. However even a half-shaded roof (I have one) generates electricity at 11c per kWh which is less than half of what I pay Eversource today.

A: Solar photovoltaic panels are sometimes called solar P.V. panels to distinguish them from solar thermal panels, or solar hot-water panels, which use the heat from the sun to directly heat water. Solar thermal panels can be over 70% efficient, which sounds great compared to solar P.V. where the maximum commercially available efficiency is 22%. However, if you are using that solar electricity to power a heat-pump hot-water tank (please see page 66 in Chapter 2 of Zero Carbon Home), with its 400% efficiency, you get a total heating efficiency of 84% for the solar P.V. panel that is heating your hot water with a heat pump. This is better than the efficiency of a solar thermal panel. 

Because of net-metering (please see page 82 of Zero Carbon Home), solar P.V. panels can generate the electricity in the summer, and you can use it in the winter. This is not possible with solar thermal panels, which don’t generate enough hot water in the winter and generate far too much in the summer.  Also, the solar-P.V.-plus-heat-pump-hot-water-tank option has no pipes and hence cannot leak. Better overall efficiency, energy “storage” via net-metering, and no burst pipes make solar P.V., in my opinion, a far better solution than solar thermal panels.

A: Solar photovoltaic panels are sometimes called solar P.V. panels to distinguish them from solar thermal panels, or solar hot-water panels, which use the heat from the sun to directly heat water. Solar thermal panels can be over 70% efficient, which sounds great compared to solar P.V. where the maximum commercially available efficiency is 22%. However, if you are using that solar electricity to power a heat-pump hot-water tank (please see page 66 in Chapter 2 of Zero Carbon Home), with its 400% efficiency, you get a total heating efficiency of 84% for the solar P.V. panel that is heating your hot water with a heat pump. This is better than the efficiency of a solar thermal panel. 

Because of net-metering (please see page 82 of Zero Carbon Home), solar P.V. panels can generate the electricity in the summer, and you can use it in the winter. This is not possible with solar thermal panels, which don’t generate enough hot water in the winter and generate far too much in the summer.  Also, the solar-P.V.-plus-heat-pump-hot-water-tank option has no pipes and hence cannot leak. Better overall efficiency, energy “storage” via net-metering, and no burst pipes make solar P.V., in my opinion, a far better solution than solar thermal panels.

A: There are now three separate subsides for batteries in MA: if you have an array enrolled in SMART you get an “adder” for having a battery. The SMART subsidy in October 2020 is about 8c/kWh (note this deceases with time and varies with the utility company you use so please check what it is today). The adder for the battery is about 4c/kWh. For a typical 10kW array producing 10,000kWh a year the SMART subsidy is worth $800 a year and the battery adder is worth another $400 on top. Both are for 10 years so the adder is worth about $4,000. Both decrease with time – that is the structure of the SMART subsidy scheme. However, once you get your subsidy rate it is locked in for 10 years.
A Powerwall battery costs $10,000 to $15,000 fully installed. So the $4,000 SMART adder cuts the price by a third to a half. The SMART adder is (as is all SMART income) taxable income.  I have yet to see a solar installer admit this.

In addition, Eversource has a subsidy called Connected Solutions where ES pays you to have access to your battery during peak power demand. This payment seems to be about $1,200 a year but the it is not really clear exactly how this is calculated or for how many years it lasts. It is not clear if this is considered taxable income (like SMART) of if it is considered more like a rebate or a credit (the way net metering works, and that is not taxable income). If the Connected Solutions program lasts 10 years it would pay for the entire cost of the battery which seems excessively generous and therefore unlikely. However, it will be something else to reduce the cost to you. 

Finally there is a brand new subsidy, called CPEC (which was just announced in August 2020) or Clean Peak Energy Certificates. Power stations are now required to buy these CPECs to reduce their carbon emissions during peak demand on the grid. They are a bit like SRECs which is what SMART replaced. Peak demand (say on a hot summer afternoon when everyone has their AC on) brings the fossil fuel “peaker” plants into operation. These are not only the most expensive power-generating plants on the grid but they are often also the dirtiest, i.e., cause the most pollution and CO2 emissions. Hence, the state has a strong interest in reducing the use of these peaker plants through encouraging batteries. CPECs are brand new and no-one can even tell me how much I can earn from them or whether they are taxable income. However, it is sure to be favorable to you. So, overall, and despite all the uncertainty, batteries are looking like a better and better bet. I have ordered battery systems for both our home and our rental property.

My final point is not about batteries but about generators. A diesel or propane generator costs about $500 a year to set serviced so it will work when you actually need it. This is $5,000 over 10 years. The generator itself will probably cost you $3,000 up front. So, the 10-year cost of a generator is $8,000. The 10-year cost of a battery is between $5,000 and $10,000 with the current SMART subsidy alone. Add in Connected Solutions and CPEC and batteries are looking like a really good investment. Oh, and did I mention that they have a zero carbon footprint and emit no asthma-inducing soot, nitric oxide or sulfur dioxide?

Note this post was current as of October 2020. The subsidies for batteries are a moving target and one that changes by state, by utility, over time and even by zone you are in within a utility’s service area. Please check the latest information for your home before deciding to install a battery.