Grid-Tie for Alabama Power Customers
The intent of a grid-tie system is to offset kWh you would otherwise purchase. This it does. The extent to which it reduces your power bill is dependent on the utility company to which it is tied. Grid-tie solar was very popular in areas where legislation forced net metering because under such an arrangement, solar could effectively zero a power bill or generate a surplus, which was refunded to the owner. Net metering is slowly but surely going away because it is unfavorable to the utility’s revenue. Net-metering’s replacement usually has the utility paying for un-consumed generation at the “offset” (or wholesale) rate. Under this plan, the economic size of the solar system is based on what you can actually consume, as the un-consumed kWh is greatly reduced in value. The Alabama legislature has never, and will never, pass legislation forcing the utility into a financially unfavorable arrangement, that is, net metering. There is no place in Alabama where solar will zero, or significantly reduce, an electric bill. You can still own a grid-tie solar system, but there is little to no financial incentive for doing so. Especially if you will be tied to Alabama Power. They have done all in their power to remove ALL financial incentive for owning solar. If you just want to reduce your carbon footprint, solar grid-tie is a good deal – even for Alabama Power customers. If you want to save money, consider building a house that requires significantly less energy to provide the same creature comforts. It is very doable
Battery systems provide grid independence, not bill reduction. The least expensive kWh you can get currently comes through the meter. But there are some people who no longer relish the vulnerability of being completely dependent on large corporations for the things that are necessary to living comfortably. They are very willing to pay for something that provides such independence. If you have no such concerns, forget about battery-based solar systems.
There is one way that solar can provide both a reduction in $ out for purchased power AND some grid independence. If interested, watch the video on my website on solar water heating. I honestly can’t explain why solar water heaters are such a mystery, and a rarity, in Alabama.
I understand the desire to maintain all of our grid addictions at a lower cost. But the guys that own the politicians have tilted the table in their favor. By far, the better approach is to REDUCE or ELIMINATE your dependence on purchased power. You can still have all the creature comforts to which you have become accustomed. It does, however, require a break from traditional programmed behavior – which means it takes some effort in thought as to how you really want to live.
I worked for Alabama Power for 20 years in power distribution. It has been over 9 years since I’ve purchased a kWh and I’m living in the most comfortable house ever. I sell and install all kinds of solar systems, but my main focus is systems that support life, security, and comfort – independent of the grid. If you are interested, please call. I can talk a lot faster than I can type.
Grid-Tie Solar for TVA Co-Op Customers
The TVA administers the solar program. Here is a link to the TVA website explaining the program. The process starts by making application with your electric utility and Co-Ops are not required to participate. Make application, get the information and study it well to understand how this works. You can’t connect a solar system to the utility without a signed agreement (usually lasting 10 years) between your utility and the TVA. Your solar installer must also be qualified and be approved by the TVA.
Let’s start with a few facts about grid-tie solar. First, a grid-tie solar system is grid-dependent. It will not work if the grid is down.
Second, solar is fully capable of offsetting every kWh your house consumes. However, eliminating or reducing your power bill is another matter. There was a time when net metering was popular in parts of the US. Net metering provides for an even exchange of kWh through the meter. In other words, the utility pays you the same thing you pay them. Consider that a TVA utility purchases a kWh at one rate and sells it to you at a higher rate that allows them to remain in business and make a reasonable profit, as regulated by the Public Service Commission. If they pay you the “retail” rate for a kWh, they will lose money when they sell it to your neighbor because of the losses involved in moving energy. This loss is actually paid by the rate payer. Net metering is not a good deal for the utility nor the non-solar owning rate payer. I’m not aware of a single utility in Alabama that uses net metering. Legislated net metering made solar grid-tie systems very popular, but I think they will eventually go the way of the dinosaur.
The TVA does offer options that accommodate those that just want to be green and those that want to lower their power bill via solar. Let’s talk about the latter.
Grid-tie solar systems generate kWh, the exact thing you purchase from the utility. Every kWh your system produces goes to one of two places. If you consume it, it offsets a kWh that you would have otherwise purchased. If you don’t consume it, the TVA purchases it for the offset rate. If you consume a kWh your solar system produces, you save something close to 15 cents. If you don’t, TVA purchases it for around 4.5 cents. This huge disparity tends to keep the grid-tie systems connected to a TVA Co-Op relatively small. A larger system will produce a lot of 4.5 cent kWh, making a large system less profitable than one designed around your average summer and winter consumption.
Solar water heating offers another way to reduce your power bill. A solar water heater costs less than a small grid-tie solar system and breaks even in about half the time. Solar water heaters do not require a contract or a permission slip with the utility or TVA. If lowering your power bill via solar is your goal, I suggest you start by considering a solar water heater. Watch the video linked here for more details.
How Grid-Tie Works in Alabama, even for Alabama Power Customers
You have heard that solar can reduce or eliminate your power bill. The power company will purchase any excess power and you can even make money. If you covered a few acres with solar panels, you might even have a nice retirement income.
All of the above is true in states where the utility offers NET metering. Net metering exchanges kWh at the retail rate. The utility pays you the same amount for a kWh as you pay them. No utility in Alabama offers net metering and it exists mostly (maybe ONLY) in places where it is mandated by the state. Net metering is bad for utilities and their customers. Every solar system results in lost revenue to the utility and forces rate payers to subsidize the lost revenue. I think net metering will eventually go the way of the dinosaur.
The intent of a grid-tie system is to offset kWh you would otherwise purchase. This it does. Here is how it works in Alabama. Every kWh you generate and consume saves you the cost of the kWh and the associated taxes, including the state and federal income tax. A solar kWh consumed by the owner saves around 16 cents. That is a good deal. Most Alabama utilities will purchase any excess kWh you generate at the “offset”, or wholesale rate, of around 4 cents. That is a reasonable and fair deal.
Technically, you can offset every kWh your house consumes, making ownership of a grid-tie system very green. However, reducing your power bill is another matter. A grid-tie solar system sized to maximize the return-on-investment will be sized to minimize the generation sold to the utility at the reduced rate. In other words, you want to minimize the kWh you generate and sell for 4 cents. This is the current situation with most all electric coops in Alabama, including TVA.
Alabama Power is a little more jealous of their revenue. They got the PSC to approve a Capacity Reservation Charge, or CRC for short. It is currently about $5.50 per system kWh rating per month. Their take is something like this. The capacity they have installed to serve your house is idle when the sun is shining. But they must maintain the capacity because they have to meet your electrical demand when the sun is not shining. So, they charge you a fee for holding that capacity in reserve. This makes perfect business sense to a utility and I suspect many other utilities will follow this model and small roof-top grid-tie solar will disappear.
Alabama Power likes solar. They own a lot of it. And they seem very friendly to their customers owning solar. But the CRC protects their revenue by essentially putting the generation of your solar system into their pocket. If your goal is to be green, this program works for you. If you are interested in reducing your power bill, not so much.
By the way, grid-tie systems must be connected to the utility to function. They go down with the grid. Many people are disappointed that their grid-tie solar system does not produce power during a grid outage.
But solar is not going away. In fact, it is now a force to be reckoned with and will play a significant role in the future of residential power. Easily 90% of our systems involve energy storage – batteries. These systems reduce or eliminate your dependency on purchased power. They are fully capable of interacting with the grid, but because of the complexity of utility interconnection agreements, most owners choose not to connect their solar system to the grid. These systems power select loads much like an uninterruptable power supply and can push power into your grid panel, reducing your purchased power. No grid interconnection agreement and no permission slip required from the utility. The technology is amazing.
A solar water heater is an excellent way to use solar energy to reduce your dependency on fossil fuels and will save a boat load of money if you replace an electric water heater. Solar water heaters cost less than a modest grid-tie system, break even in around 7 years, and will return around $20,000 over its expected 30+ year lifetime. No permission slip or contract with the electric utility required. This is a better solar option for many people.
Thanks for your interest in solar and I appreciate your reading this blog. We would love to help you tap into the abundant solar resource – the natural and renewable source of energy.
I want to go off-grid
One of the most frequent requests I get goes something like this. “Can you put some solar panels on my roof? I want to get rid of my electric meter all together.” I think the prospect is looking at his/her bill when he/she calls.
The short answer is no. Abundant, readily available, reliable, low-cost power has turned Americans into willing killowattaholicis. We like convenience and the addiction happened naturally. The wall plug and light switch were there when we were born. If we want something, we plug it in or flip the switch. We are largely unaware of how much power we consume, and our appetite has no end. I don’t like the term “addiction” either, and I was a kilowatt pusher for 20 years. But examine our behavior. If the power goes off, we panic. We complain about the bill, but don’t change our behavior. The caller wanting to go off-grid is simply tired of paying the going rate for power and is looking for another pusher to get his fix. Here is the truth. The lowest cost power you can currently get comes through the meter. If you are unhappy with the bill, lower your consumption.
Here is the problem. The houses we’ve built consume so much power that we are locked into dependency on the utility company. Here is a list of appliances that are grid dependent; electric stove and oven, dryer, water heater, heat pump, central air conditioning (including ground source or geo-thermal). It is not possible to power these kinds of appliances during the winter from an off-grid system. The number of houses that have an electric meter that I’ve converted to off-grid: ZERO.
I worked for Alabama Power as an electrical engineer for 20 years. I now live off-grid and help others break their dependency on purchased power. Most of the systems I install are off-grid (stand-alone) power systems and most go into grid-connected houses. The owners simply want options. A small but growing number of people actually move off-grid. Anyone interested in owning their own power system is encouraged to visit the Alabama Solar Technology Center, my home and base of operations. You will see a renewable energy building capable of supporting a number of people with a high degree of comfort and security. It CAN be done, but it WON’T be done in the conventionally built house designed to be grid-dependent. When you tour the Solar Center, you will see how to successfully implement off-grid and you will be thrilled at the possibilities.
Here is a recent request via email with my thoughts and replies. This is an actual case.
Prospect
New construction: Would like feasibility of using solar system and wind generated power to provide electricity and hot water in an off grid environment. Living quarters in new construction will be 2000 Sq Ft. I need estimate of system size needed and cost of system.
My Thoughts
Solar – yes. Wind – no. Solar heated water – yes. Estimate the size of the power system based on square footage? You know a square foot does not consume any power. I need to get this person to come to the Solar Center for a tour.
My Reply
The nature of this inquiry is too complex to answer via email. Please call on Monday at your convenience.
Prospect
House is 60×40. 60ft side faces due south with no shade. Not sure of roof angle, it’s standard trusses across the 40ft span. I suspect I will need somewhere around 800 to 1000kWh system, based on my current usage in present home.
My Thoughts
Hum. This person does not listen. Didn’t I say this is too complex to discuss via email. And now I have an email with kWh usage of her PRESENT (grid-dependent) house.
My Reply
You will have to help me with the 1000kwh thing. Where did you get that number? And per day, week, month?
Prospect
Off-grid house. 1000kWh per month, based on size and design of house. I have made the size and design determinations based on an engineering background.
My Thoughts
A well-designed air-conditioned off-grid house will require approximately 450 kWh/month during the summer and around 300 kWh/month during the winter. I need to get this person to tour the Solar Center.
My Reply
Have you toured my place?
Prospect
I haven’t toured your place yet. I have viewed your website. My policy is whomever has the best price for what I need, will get my business. I also like to keep my business in Alabama, if possible.
My Thoughts
I probably don’t want this person to become a customer. She has a “policy” and already knows what she needs (but is clueless and resistant). I think she should consider a new policy: I won’t purchase an off-grid system from someone that does not live off-grid and I’m willing to pay for a functioning system.
My Reply
I think you will benefit greatly from a tour of the Alabama Solar Technology Center, my home and base if operations. I’m in my 7th year off-grid, living more comfortably than ever, and I do not come near 1000kwh per month.
The tour is free whether you buy anything from me or not. I’ll prepare a budget quote when we have the tour completed and things better defined. Let me know when you can come.
Prospect
Based on the square footage of my current grid-based home and its electrical consumption, nine months out of the year I use approximately 600kWh per month, or less. The other 2 – 3 months (Dec, Jan, Feb), electrical consumption is approximately 1400kWh per month. I like to maintain a consistent temperature in my home. Of course, when I move, I’ll be using propane for some appliances (stove, oven, etc.) as opposed to electricity, which is currently used. Thus, my electrical usage will be somewhat different. I’m also not opposed to Geothermal heating & cooling, but need more information before going that route.
I’ll let you know when my General Contractor has the house built. You may want to take a look at the location.
My Thoughts
If you do not do the tour, you are never going to live off-grid. You are going to heat with propane as well because geothermal is not an off-grid option (and your “engineering background” does not know it). I’ve tried to be gentle, but I’ll make a bold effort to salvage this case.
My Reply
Well, I recommend the tour before you do anything. You would then realize on your own what I’m persuaded to tell you now.
⦁ If you are going off-grid, you can’t take your grid addictions with you.
⦁ Thus, your previous life as a killowattaholic has no real connection to your future. Toss your kwh consumption records. They are meaningless.
⦁ You must learn the difference in off-grid and grid dependent appliances. Geothermal belongs in the latter, as do all other forms of electric heating.
⦁ You will be excited about the comfort, security, and simplicity of off-grid living.
⦁ You have the cart way too far ahead of the horse. You can leave the grid out of the conversation until the house is completed. A successful off-grid experience starts at the conception stage, not after the house is built.
I “recommend” the tour to be diplomatic. In truth, I’d rather not sell you a system unless you do the tour early in the process. There is much more you need to learn, but I’m not going to write a book. The tour will fill the deficiency and is an education you can’t afford to be without.
33 days later
My last email seems to have broken our conversation. Do I need to keep your inquiry in my active folder?
15 minutes later
No! Do not contact me again. I’ve decided to go with a company that will sell me what I want, and not preach to me about what they think I need.
Goodbye!
My Thoughts
This was the best outcome. I do not want someone unwilling to make the simple but necessary adjustments required of off-grid living to be my customer. I want success stories, not failures. It is sometimes difficult to see a woman get what she thinks she wants. This is not going to play well and I hate it for her and what it is going to do to the solar industry.
No Reply
My Thoughts
I know what goodbye means.
Selecting appliances for Off
Most of us were born into a grid world. Our minds are steeped in grid dependency. Effort is required to change the programming and a change of mind always precedes a change of state. So, exactly what appliances can be operated from an off-grid system? Below is a copy-paste from a recent inquiry:
Regarding appliance selection, here is a list of appliances that are grid-dependent. Electric stoves, ovens, water heaters, clothes dryers, and almost all forms of electric heat. The absolute best way to do air-conditioning is with a mini-split. Insulate your house well, use glass moderately, and you can figure 12,000 btu (one ton) per 1000 ft2. That is one half of the standing rule of thumb used by almost all HVAC contractors. I strongly recommend you consider a DC appliance for your refrigerated and frozen food requirements. Small microwaves are no problem. HE washers, gas dryers, gas stove/oven are standard along with the usual array of countertop kitchen appliances. Wood or gas heat, but you may want both. Gas for convenience and wood for sustainability. We do well water systems slightly differently, but that is a subject of it’s own.
The above list will allow you to make an almost unnoticeable transition from grid to off-grid. If you are willing (or specifically want) to accept some life style changes, the transition to grid independence can be very affordable and rewarding.
