Puerto Ricans power their own solar boom

 From Canary Media

A bright yellow building with bold green trim hums with activity in Caguas, a city sprawled across a mountain valley south of San Juan, Puerto Rico. In a spacious kitchen, volunteers chop vegetables and cook rice for community meals. Down the hall, visitors browse racks of free and discounted produce, canned beans and bottles of oil. Outside, beneath a large metal awning, retirees soak in calming music as they take part in a stress-relief workshop.

The community services on offer here at the Centro de Apoyo Mutuo, or Mutual Support Center, are made possible by the 24 solar panels mounted on the rooftop. Two lithium-ion batteries the size of suitcases are kept in a windowless storage room, allowing the center to stay open on cloudy days and in the evenings. The building doesn’t use any electricity from the utility grid.

Nearly five years ago, after Hurricane Maria tore a path of devastation across the U.S. territory and all but destroyed Puerto Rico’s electricity system, residents in Caguas reclaimed what had for decades been an abandoned Social Security office. They ripped out moldy carpet, scrubbed the walls and began providing food and supplies to neighbors.

“This was a space that wasn’t serving the people, and now the community has taken it over,” Marisel Robles, one of the center’s organizers, says on a muggy day in early May, just weeks before the start of the next Atlantic hurricane season.

Robles guides me up a thin metal ladder to the rooftop of the one-story building, pushing aside tree branches sagging with brown seed pods. Saúl González, a volunteer and local solar installer, joins our expedition. The three rows of solar panels form a ​“mosaic” of different makes and models, all of them donated by nonprofit organizations, he explains.

With 6 kilowatts of solar capacity and 30 kilowatt-hours of battery storage, the system can typically meet the center’s power needs. Occasionally, members cut the lights and fans during the day to save electricity for an evening dance class. Still, Robles says it’s better than running expensive, polluting diesel generators or depending on the island’s electric grid — which, despite years of post-hurricane repairs, remains prone to routine outages, sweeping blackouts and frequent voltage surges that fry people’s appliances. In early April, the entire island lost grid power for three days after an aging electric breaker caught fire on the southern coast.

“Sometimes, we hear the ​‘boom’ of people turning on their diesel generators, and that’s how we know the power went out in town, because here we still have power,” Robles says, looking out over the tops of neighboring buildings. ​“For us, it’s like a victory every day this happens, because we feel like we did something right.”

The Mutual Support Center is not unique in its ability to produce its own clean energy. A rising number of Puerto Ricans are installing solar panels and batteries on their homes and businesses, fed up with the unstable electric grid, high electricity bills and the state-owned utility’s reliance on fossil fuels. As of January 2022, some 42,000 rooftop solar systems were enrolled in the island’s net-metering program — more than eight times the number at the end of 2016, the year before Hurricane Maria struck the island, according to utility data. Thousands more systems are operating but are not officially counted because, like the center’s unit, they aren’t connected to the grid.

Spearheaded largely by residents, business owners and philanthropies, the grassroots solar movement sweeping the island is happening despite headwinds from the territory’s centralized utility — which claims it’s working to advance the island’s clean energy goals but continues investing in fossil fuels. Solar proponents say that, for the technology to reach most of Puerto Rico’s 3.2 million people, the government and its utility will need to more fully participate in what has largely been a bottom-up energy transformation. With billions of federal recovery dollars set to flow to Puerto Rico, they argue that now is the time for public policies and investments that shift the island away from an outdated model of large, far-flung power plants to one that supplies clean electricity close to where people need it.

Saúl González, left, and Marisel Robles help maintain the solar system on the Mutual Support Center’s rooftop in Caguas, Puerto Rico. (Maria Gallucci/Canary Media)

Cheaper energy; pricier wires

 A very interesting and informative analysis.  I shall quote only parts of it.

Shortly after covid hit the US and the work from home era began, I looked into buying a bottle of shampoo online. I used to always grab things like that at the drug store next to my office, so without an office to leave, I kept forgetting to buy it. Unfortunately, shipping would have more than doubled its cost, which I couldn’t stomach. Instead, I wrote “BUY SHAMPOO, IDIOT” on a post-it note and put it on my front door.

Increasingly, this is what buying electricity in the US may feel like.

Your electricity bill has two elements: the cost of generating power and the cost of delivering it. People typically assume their bill is mostly or exclusively driven by the former. Far off power plants produce energy, they sell it into the wholesale market, and those costs eventually get passed on to consumers.

In reality, the cost of building and maintaining all the infrastructure to get power to your house (transmission lines, substations, distribution networks, transformers, etc.) is a significant portion of your bill. In fact, when working with large energy users across the country, I even see utility bills where a majority of costs are associated with delivery.

And one of the most slept on trends in the energy industry is that this portion is growing rapidly. According to the US Energy Information Administration,

“After adjusting for inflation, major utilities spent 2.6 cents per kilowatthour (kWh) on electricity delivery in 2010, using 2020 dollars. In comparison, spending on delivery was 65% higher in 2020 at 4.3 cents/kWh. Conversely, utility spending on power production decreased from 6.8 cents/kWh in 2010 (using 2020 dollars) to 4.6 cents/kWh in 2020.”

Put simply, generating power is getting cheaper while delivering it becomes more expensive. In this post I will show how the utility business model creates this situation, how it can meaningfully slow the energy transition, and why DERs must challenge the monopoly if we want to fix it.

There are obvious downsides to electricity becoming more expensive [because of surging 'poles and wires' costs]. For industry, high prices hurt the bottom line. For residential consumers, one can be forced to choose between a credit card balance and keeping the heat on. But within the more specific context of electricity generation becoming cheaper while its delivery cost increases, the impact on electrification should be considered.

The term electrification is used to describe fuel-switching a fossil-fuel energy demand to electricity. The two most common examples of this are electric vehicles and heat pump electric heating. Both are considered by most in the energy sector to be essential parts of decarbonization. The idea is that if we switch as much energy use to electricity as possible, then unlike when using fossil fuels, we can clean up the electricity source.

One reason electrification is supposed to be economical (in addition to sustainable) is that making power through renewables and batteries is getting cheaper by the day. As the power system converts to these sources, electricity prices should come down, making electrification economics more attractive. Or so the theory goes.

But if delivery costs continue to increase at the current pace, they’ll eat any savings generated by large-scale solar and wind. This is a problem for decarbonization, when around 130 million Americans live in a state where replacing an old gas furnace with a heat pump would create higher energy costs than simply buying another gas furnace (ignoring the higher capex as well).

And this doesn’t just impact residential home electrification. Buried in the business model of virtually every new and exciting decarbonization pathway (direct air capture, H2 for steel and shipping, e-fuels for aviation, etc.) is the assumption of very low cost electricity inputs made possible by renewables. You can listen to this episode of The Interchange for a deep dive on the subject, but the quick version is if that cheap renewable energy input is to be accessed via the grid, then delivery costs once again become a problem.

If we want rapid climate action the cost of electricity needs to fall, but its delivery costs may get in the way.

Another outcome of rising delivery and declining generation costs is electricity users will try to avoid those delivery costs. This will be accomplished by building on-site power systems or migrating to locations adjacent to existing cheap energy generation.

The former is becoming commonplace. Homes and businesses are installing on-site solar and storage at a rapid pace, and while they may not realize it, they are doing so to avoid delivery costs. The economics of this choice are often superior to signing up for a grid-delivered power contract because each unit of energy generates value at the retail rate (inclusive of delivery costs) rather than wholesale rate. And as the march of technology learning rates continues, the quantity of locations where this choice makes sense will grow.

Over time, the cost of electricity alone will decline, as renewables get cheaper.
But as the costs of delivery rise, the total cost of utility-scale electricity will exceed
the initially higher costs of distributed generation (rooftop solar)

Simultaneously, load will begin to migrate to places where large wind and solar projects already exist, in attempt to offtake power directly. This has started to happen with new industrial energy loads like hydrogen production and crypto-currency mining because they are extremely sensitive to the cost of power. Soon, other new-build industrial sites will do the same. And eventually, when this dynamic becomes compelling enough, businesses will even consider moving from their existing facilities to capture low cost power directly from large-scale energy sources. If you can avoid the distribution grid, you will.

In the electricity industry we refer to this as load defection, for which the primary concern is the so called utility death spiral. If load defection accelerates, delivery utilities will experience significant decline in energy sales, necessitating rate increases to pay for fixed infrastructure costs. This leads to more load defection, and the cycles continues. This is considered problematic because it will leave those without on-site power systems shouldering the cost of the delivery infrastructure we all (including on-site energy users) rely on.

This argument has been used to levy prejudicial fees on customers with on-site generation, and while this may seem logical, it ignores a crucial consideration; short-run versus long-run costs.

It is true that existing grid delivery assets are fixed costs. Reducing energy consumption from the utility doesn’t reduce the cost of that infrastructure. Once it exists, we’re stuck with it. However, reducing energy consumption (at the right times, more on that later), absolutely does decrease the need for future delivery infrastructure. If the delivery infrastructure needs to support “x” peak load today, and 1.5x at some point in the future, then a 0.25x reduction today means we only need to support 1.25x in the future. While it doesn’t translate immediately into delivery infrastructure savings, it most certainly will over time.

This matters because, while load hasn’t grown for 15+ years, it is about to explode. Earlier I mentioned electrification to show how increasing electricity delivery costs are a problem for decarbonization, but what I didn’t describe was the extent to which this will transform our electricity system. A study from the National Renewable Energy Laboratory (NREL) found high levels of electrification (but not even full electrification) will result in the power system requiring between 2 and 3.5 terawatts of generation capacity, relative to our 1.1 terawatts today.

Doubling or tripling our generating capacity will require a ton of new delivery infrastructure. It follows that reducing load on-site with distributed energy will absolutely reduce total delivery system costs. In turn, this means distributed energy will help keep delivery rates low for everyone, which is a very different outcome than the dystopian utility death spiral narrative some would lead you to believe.

Load defection is good for the grid, because it makes room in our existing delivery infrastructure to accommodate electrification. That results in a more optimized, cheaper power system for all, while making successful decarbonization more probable.

This phenomenon isn't just confined to the US,  It's happened here in Australia, too.  The grid was privatised, despite being a monopoly, and the regulatory system in effect encouraged the grid companies to 'gold plate' the network.  This led to surging electricity prices, which the right-wing party (the badly misnamed Liberal Party) used to justify ditching the renewable energy target, despite the steep actual decline in renewable energy costs.

Solarquotes calculates the cost per kWh of rooftop solar at ~7 cents/kWh.  At first sight, it appears much more expensive than utility-scale solar.  But that's before the cost of the grid is added in.  Utilities are charging anything from 18 cents/kWh to 30 cents/kWh to supply electricity, plus they also add a fixed 'poles and wires' charge to your bill.  In sunny Australia, the risk of grid defection is very real. 

My ray of sunshine

Off grid--by Dionne Gain, The Age

From Elizabeth Farrelly at The Age:

Although the term “solar system” usually refers to our heliocentric colloquium of planets, asteroids, comets and assorted gravity-tethered junk it could equally designate the arrangement of wires, batteries and photovoltaic panels that hover above my head as I write. I can’t tell you how much I love it, my little solar system.

Each day, rain or shine, it is fully replenished (after its overnight fridge-running duties) before breakfast is done. I can charge all devices, run a fridge and a vacuum - run the heater all day if I like - at zero cost to self or planet. In more than three months, the batteries have never dipped below three-quarters full.

It’s not cutting edge or anything. Slinky, certainly, with a neat box of lithium-ion batteries and a wee animated readout tracking the photons, letting you monitor charge-rate, usage, feedback - even remotely, via app, from a thousand clicks. But it’s not earth-shattering. Not the artificial photosynthesis of which science is now capable. Yet still it strikes me, every day, as a kind of magic.

All this is less evident with urban solar because it’s often just an adjunct to grid-type power, of which the true costs are hidden – dissipated communally and amortised over time. Here in the country things are much clearer. Just to connect, although the poles and wires are easily visible from my desk window, they wanted to charge me $50,000. And that’s before I started paying through the nose for the power itself, at rates increasing with every disillusioned consumer who deserts to solar.

Fifty thousand bucks. My generously proportioned solar system cost less than half that - and thenceforth is bountiful, clean and free.  We can wrench the coal from the ground, burn it in a way that pollutes the air, wastes water and heats the globe, transport it vast distances via wasteful and uglifying wires. Or we can sit with our hands out and silently collect what nature gives us gratis. You can have a clunkety-clunk diesel generator, a filthy coal-fired power station or this sleek and silent on-site engine whose only moving parts are photons in and electrons out. You choose.

More energy strikes the earth in an hour than the world can use in a year. Scientists have calculated that to generate the necessary 15 terawatts of carbon-neutral energy would use only 0.17 per cent of the earth’s surface – a country the size of Venezuela or Namibia. Obviously, this incident energy is not evenly distributed. On the other hand most of it falls on the poorest countries – Africa, India, South America. So my question is this.

Our politicians blather on about how we have to dig, sell and burn our filthy coal to drag the world’s poor out of misery. We’re awfully bloody sorry about climate change, and the island nations we’re drowning, but honestly it’s the only way to end poverty. Blah blah.

Yet Elon Musk says 100 Tesla Gigafactories (producing low-cost lithium-ion batteries) like his Nevada model could “transition the whole world to sustainable energy”. So why wouldn’t they just do that?

Why can’t the rich countries see that ending poverty by driving climate change is madness? That their greatest calling, for themselves, their grandkids and the so-called “third” world is to provide free, clean energy forever?

Why don’t they bundle their aid budgets together and just build these factories, these massive arrays – a hundred, two hundred. Honestly, whatever. Just bloody do it.

[Read more here]

To provide electricity to a home which is off-grid, you require more resources than you would for one which is connected to the grid.  This is because the demand on the grid from millions of consumers averages out.  I don't put my kettle on at the same time as my neighbour.  Similarly, the supply of electricity from renewables also averages out.  The winds in western Victoria blow at different times and strengths to the winds in eastern Victoria.  At any given moment, sunshine levels are different across the state and the continent.  If there are adequate interconnectors to distribute power from one end of the state to the other, the need for storage is reduced.   Moreover, having a mixed supply from wind and solar also means that less storage is needed.  That's hard to do cost-effectively for a single off-grid house, as small wind turbines are much less efficient than large ones. 

Yet, even without being connected to the grid, the author has had no shortage of electricity.  Note that the three months she talks  about (July, August, September)  are the coldest months of the year in Australia, which means that even using heaters she has had enough power to run her house. 

The implication of this is obvious.  If a single household can go off grid, clearly the whole grid could be run using renewables.  This is so obvious that I always wonder that denialists can't see it.  With the right level of storage, with interconnectors, and with some "excess" capacity (see below) we can move to 100% renewables without blackouts.

What about cost?  The author doesn't give the details of the panels and battery she installed, but  6.5 kW of solar panels would cost $4000, and a Tesla 13.5 kWh Powerwall would cost about $15,000 fully installed.  She says the cost of her installation is "less than half" $50,000, so that would fit.  I don't know how much electricity her house consumes, but the average is something like 20 kWh per day, which means that even with only a 13.5 kWh battery she has never run out of electricity.   On the other side, her cost savings would average $4000 a year ($2200 for the electricity and $1800 for connection) -- she will never pay another electricity bill.  And her installation will have paid for itself in 5 years.  No wonder the utility companies are petrified of household solar + storage and say it needs "regulating" because it's "unstable".

Note that 6.5 kW of solar panels would produce far more power than the house needs every day in summer (35.3 kWh in January) and the panels will have to be automatically disconnected from the house's internal power grid to prevent damage and fire.  This is the equivalent of curtailment at grid level.  One way to ensure there is enough power from renewables is to overbuild capacity and then curtail output when supply is greater than demand.  In effect, this is what the author has done on her house.  But this adds to costs, though overcapacity is typical even with conventional power stations in order that all likely demand levels can be catered for.  A future grid powered by renewables would also have inbuilt additional capacity for the same reason.

To get equivalent levels of storage from the grid would mean 16 hours of storage capacity would be needed.  That would add US$70/MWh to the cost of the underlying electricity at current battery costs.  This is slightly more expensive than coal, according to Lazard's LCOE estimates.   But the cost of batteries is falling fast.  In 5 years' time, storage will cost 1/3rd of what it does today.  Which means that 16 hours of grid-wide storage would add just $23/MWh to the cost of electricity.  In other words, still a little pricey now, but cheap in 5 years and even cheaper in 10.