The Ratchet Effect is why solar power won't be worth while for you to invest in --- or at least not as worthwhile as it should be. For anyone who has true net metering, that is to say a single meter turning backwards when they are generating excess power, forget about this article. It's not about you*. But for anyone who is double metered (or stuck with a single meter with a double read out) monitoring the output from his solar array, wind turbine or small hydro system, read on.
*Actually, there is a way the power company and the government can still shaft you if you are net metered but it is diabolical. I hate to mention it in case I give them the idea but, I suppose, it is better out in the open so that we can be prepared. I have described it at the end of this blog.
The Ratchet Effect is most easily understood, by using the example of a day in which you generate just exactly as much power as you use but applies equally to any day in which you generate and use electric power (that is to say, every day). I have written about it before but I want to put a name to it so from now on we can talk in Short Hand. We can talk about the Ratchet Effect without having to go into the whole explanation again. So let's look at our hypothetical day in which you generate just as much power as you use.
Say you use and generate 60kWh on this day. That is not what is registered on your meters. Fortunately, in my jurisdiction (New Zealand) we are allowed to use our home generated power and only top up if we are short or send power to the grid if we generate an excess. This is not so in all jurisdictions. In Germany, for instance, every kWh they generate goes through one meter and every kWh they use through the other. Do the calculations on that little lot and see what a scam it is. At any rate, let us say, with the ratchet effect, your meters each read 10kWh. That is the sum of the instantaneous amounts you imported and exported throughout the day. Remember, that this happens because your meters record any instant that you are importing or exporting and no meter turns backwards..... And you will hardly ever be using exactly what you are generating.
This occurs because of the following. Firstly, even if it is sunny all day from daybreak to sunset, the amount of power you generate throughout the day looks like a sin curve. That is to say, it starts at nothing, rises to a maximum in the middle of the day and falls to nothing in the evening. Your power use does not follow this pattern.
Then, few days will be sunny all the time. There will be clouds passing in front of the sun, greatly reducing your power generation. It rises again as the cloud pass by.
Then there is your use. In a usual use profile, you will have a small peak of use in the morning, a larger one in the evening and automatic devices such as your refrigerator go off and on during the day. If you are at home, you may turn your computer on for an hour sometime in the day and then turn it off. So why is all this important.
What it means is that at practically no time will your power use balance your power generation. In our hypothetical day even though you generate, over the whole day, exactly what you use, at any given moment, one or other of your meters will be running. Both only run one way and that is up. Neither of them goes backwards. In this hypothetical day, at the end of the day, let's say that both of them read 10kWh.
Now you would think on first thought that the power company will simply take note of these two readings and say that, overall, you have neither generated or used power. Wouldn't that be nice. Not on your nelly. Ever ask yourself why they bother with two meters* if this is what they intend to do. Why go to the added expense. All they would have to do is to install a little electronic device to disconnect you if the grid goes down so that you don't electrocute the lineman that comes to repair the broken wires. Then they could leave the old analogue meter with the rotating disk where it is, at no expense to you.
*which in most jurisdictions, you will have to pay for and also pay for installation.
The various ways that the government and the power company can set up the system are numerous. Just remember, though, that once you have installed your system, the power company (and the government) has you by the short and curlies (in politeze 'can change the rules any time they want'). They may tempt you into installing your system with a promise simply to subtract one meter from the other for billing purposes, and the government may say the same for tax purposes. They may even do as in Germany and promise you a greater rate for excess that you generate than for extra you use. This will generally be for a specified period*. Ever get suspicious when something seems too good to be true. It usually is. Let's look at one variation. There are many and each jurisdiction will have their own scam. Remember that one or other of your meters is ratcheting up at any given moment.
* 20 years from installation in Germany, for instance.
Suppose that the power company gives you less for power you buy than for power you sell. That is fair and right. The power company has to earn a profit from their business*. Let's say in our example they charge you 20c per kWh and pay you 10c per kWh. In our example you have used a make up of 10kwh and sent d 10kWh to the grid. You pay $2 and get $1 for that day and despite having generated just exactly what you have used, you still pay a dollar. If that is the daily average over the year, your yearly bill is $365**. Remember, this is the excess sent and received due to the fact that both your meters ratchet. They record the instantaneous export and import and meters only go upward. No meter turns backward. Of course the situation will be worse than this. We still haven't talked about summer vs winter or about totally overcast days vs totally sunny days.
*Note that the way the power companies structure their costs is to charge you some fixed costs, correctly characterized as Line Charges, theoretically for the maintenance of the lines, and charges per kWh you use.
** Plus, of course your line charge which is a fixed charge for the privilege of being connected to the power company.
A second possibility is that they give you exactly the same price for the 10 in and 10 out. Your bill is zero but hold on. The government is something else again. They will charge you tax at your marginal rate (say 33%) for the power you sell to the power company and GST at 15% (in New Zealand) for the power you buy from them. If again power costs 20c per kWh, you will pay 66c and 30c = 96c to the tax office for the power you used and generated that day.
What is more likely is that you will pay the dollar to the power company and the 96c to the government despite having generated all the power you used that day. In actual fact, in my jurisdiction, the typical price the power company pays is nearer to 5c
I'll leave you to work out other possibilities. They depend on the system which is in place in your bally-whack and there are many possible variations.
Just remember, with your twin meters ratcheting up - the Ratchet Effect - small renewable power becomes far less attractive.
The Net Metering Ploy
I mentioned at the start that the power company and the government can still "pull one" even if you are net metered. It goes like this. With the advent of small power generation and the installation of new meters, it is likely that "smart meters" will be deployed. This is for, the most part, to the benefit of the consumer since the smart meter should be able to talk to your devices and turn them on and off to take advantage of less expensive power when there is excess generation. However the smart meter will also talk to the power company.
There will no longer be any necessity for meter readers since the company can read your meters remotely whenever it wants to. Suppose your power company sets up its computer to read your meters as often as possible. It should be possible, for instance, with today's computer power to read them every minute if they so desire. You see where we are going with this. In one particular minute interval your single meter increases from X to X+x. The x is how much net power you have used, above your home generation, in that interval. This is accumulated with all other x's in your power import file. In a different one minute interval, your meter decreases from X to X-y. The ]y[* is how much you have sent to the grid in that meter. These are accumulated in your export file.
*The absolute value of 'y'
We are now, essentially in the same situation as we were with double metering and the company can charge you as they decide. The government, will, of course charge you both types of tax.
Watch out. Any scheme a government puts in place is rarely as attractive as it seems and the more attractive it seems, the more likely that it is a scam. It may be a scam now or in the future when they change the rules. A good first blow for the consumer is to have true net metering but even then you have to keep your guard up.
*Actually, there is a way the power company and the government can still shaft you if you are net metered but it is diabolical. I hate to mention it in case I give them the idea but, I suppose, it is better out in the open so that we can be prepared. I have described it at the end of this blog.
The Ratchet Effect is most easily understood, by using the example of a day in which you generate just exactly as much power as you use but applies equally to any day in which you generate and use electric power (that is to say, every day). I have written about it before but I want to put a name to it so from now on we can talk in Short Hand. We can talk about the Ratchet Effect without having to go into the whole explanation again. So let's look at our hypothetical day in which you generate just as much power as you use.
Say you use and generate 60kWh on this day. That is not what is registered on your meters. Fortunately, in my jurisdiction (New Zealand) we are allowed to use our home generated power and only top up if we are short or send power to the grid if we generate an excess. This is not so in all jurisdictions. In Germany, for instance, every kWh they generate goes through one meter and every kWh they use through the other. Do the calculations on that little lot and see what a scam it is. At any rate, let us say, with the ratchet effect, your meters each read 10kWh. That is the sum of the instantaneous amounts you imported and exported throughout the day. Remember, that this happens because your meters record any instant that you are importing or exporting and no meter turns backwards..... And you will hardly ever be using exactly what you are generating.
This occurs because of the following. Firstly, even if it is sunny all day from daybreak to sunset, the amount of power you generate throughout the day looks like a sin curve. That is to say, it starts at nothing, rises to a maximum in the middle of the day and falls to nothing in the evening. Your power use does not follow this pattern.
Then, few days will be sunny all the time. There will be clouds passing in front of the sun, greatly reducing your power generation. It rises again as the cloud pass by.
Then there is your use. In a usual use profile, you will have a small peak of use in the morning, a larger one in the evening and automatic devices such as your refrigerator go off and on during the day. If you are at home, you may turn your computer on for an hour sometime in the day and then turn it off. So why is all this important.
What it means is that at practically no time will your power use balance your power generation. In our hypothetical day even though you generate, over the whole day, exactly what you use, at any given moment, one or other of your meters will be running. Both only run one way and that is up. Neither of them goes backwards. In this hypothetical day, at the end of the day, let's say that both of them read 10kWh.
Now you would think on first thought that the power company will simply take note of these two readings and say that, overall, you have neither generated or used power. Wouldn't that be nice. Not on your nelly. Ever ask yourself why they bother with two meters* if this is what they intend to do. Why go to the added expense. All they would have to do is to install a little electronic device to disconnect you if the grid goes down so that you don't electrocute the lineman that comes to repair the broken wires. Then they could leave the old analogue meter with the rotating disk where it is, at no expense to you.
*which in most jurisdictions, you will have to pay for and also pay for installation.
The various ways that the government and the power company can set up the system are numerous. Just remember, though, that once you have installed your system, the power company (and the government) has you by the short and curlies (in politeze 'can change the rules any time they want'). They may tempt you into installing your system with a promise simply to subtract one meter from the other for billing purposes, and the government may say the same for tax purposes. They may even do as in Germany and promise you a greater rate for excess that you generate than for extra you use. This will generally be for a specified period*. Ever get suspicious when something seems too good to be true. It usually is. Let's look at one variation. There are many and each jurisdiction will have their own scam. Remember that one or other of your meters is ratcheting up at any given moment.
* 20 years from installation in Germany, for instance.
Suppose that the power company gives you less for power you buy than for power you sell. That is fair and right. The power company has to earn a profit from their business*. Let's say in our example they charge you 20c per kWh and pay you 10c per kWh. In our example you have used a make up of 10kwh and sent d 10kWh to the grid. You pay $2 and get $1 for that day and despite having generated just exactly what you have used, you still pay a dollar. If that is the daily average over the year, your yearly bill is $365**. Remember, this is the excess sent and received due to the fact that both your meters ratchet. They record the instantaneous export and import and meters only go upward. No meter turns backward. Of course the situation will be worse than this. We still haven't talked about summer vs winter or about totally overcast days vs totally sunny days.
*Note that the way the power companies structure their costs is to charge you some fixed costs, correctly characterized as Line Charges, theoretically for the maintenance of the lines, and charges per kWh you use.
** Plus, of course your line charge which is a fixed charge for the privilege of being connected to the power company.
A second possibility is that they give you exactly the same price for the 10 in and 10 out. Your bill is zero but hold on. The government is something else again. They will charge you tax at your marginal rate (say 33%) for the power you sell to the power company and GST at 15% (in New Zealand) for the power you buy from them. If again power costs 20c per kWh, you will pay 66c and 30c = 96c to the tax office for the power you used and generated that day.
What is more likely is that you will pay the dollar to the power company and the 96c to the government despite having generated all the power you used that day. In actual fact, in my jurisdiction, the typical price the power company pays is nearer to 5c
I'll leave you to work out other possibilities. They depend on the system which is in place in your bally-whack and there are many possible variations.
Just remember, with your twin meters ratcheting up - the Ratchet Effect - small renewable power becomes far less attractive.
The Net Metering Ploy
I mentioned at the start that the power company and the government can still "pull one" even if you are net metered. It goes like this. With the advent of small power generation and the installation of new meters, it is likely that "smart meters" will be deployed. This is for, the most part, to the benefit of the consumer since the smart meter should be able to talk to your devices and turn them on and off to take advantage of less expensive power when there is excess generation. However the smart meter will also talk to the power company.
There will no longer be any necessity for meter readers since the company can read your meters remotely whenever it wants to. Suppose your power company sets up its computer to read your meters as often as possible. It should be possible, for instance, with today's computer power to read them every minute if they so desire. You see where we are going with this. In one particular minute interval your single meter increases from X to X+x. The x is how much net power you have used, above your home generation, in that interval. This is accumulated with all other x's in your power import file. In a different one minute interval, your meter decreases from X to X-y. The ]y[* is how much you have sent to the grid in that meter. These are accumulated in your export file.
*The absolute value of 'y'
We are now, essentially in the same situation as we were with double metering and the company can charge you as they decide. The government, will, of course charge you both types of tax.
Watch out. Any scheme a government puts in place is rarely as attractive as it seems and the more attractive it seems, the more likely that it is a scam. It may be a scam now or in the future when they change the rules. A good first blow for the consumer is to have true net metering but even then you have to keep your guard up.
1 comment:
This is a very well written explanation of the problem with solar power in New Zealand today. I would like to suggest a solution that may work for many people experiencing this problem: Automated Self-Consumption checK: www.feedinfighter.co.nz
Best Regards
Ben Stanton
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