Since all of our electricity comes from the sun, we have a finite amount of electricity. It's determined by the angle of the sun, the cloud cover, and the length of the day. On sunny summer days we have more power than we know what to do with. When it's cloudy and the days are short (our average winter day), we're on severe energy rations. At night, our battery bank keeps us running, but it only has as much power as can be filled up throughout the day. While we do have a generator for back-up, we try our hardest to never use it. So, our average winter night means no more than one LED light bulb on at a time, nothing plugged in or running other than the refrigerator and oven, and lights out at 10pm. Unless it was sunny all day, we can't watch a movie or do laundry in the evening. We can't use the toaster until the sun is shining. The fan for our composting toilet has to be turned off from October - February. I don't think much about using electricity in the daytime (because it's abundant) but every flick of the switch at night means I have a little less of a valuable commodity.
After a life-time "on-the-grid," the lesson of finite electricity has been, by far, the most valuable experience of living "off-grid." When you're living in a home connected by powerlines to a utility, you don't have to think much of where your electricity comes from or how much there is. Up until a decade ago, things were simple. Electricity came from the utility which, for the most part, burned an oil derivative or coal in order to produce it. We, as consumers, were customers of the utility. The more we consumed, the more they profited. Like any traditional business model, it's in their best interest to sell us more electricity. Every time we turned on a lightbulb, our meter would begin to spin and electrons would flow down the line from the power plant into our home. The electrons were, for the most part, created in a large internal combustion engine which also created more than a dozen proven carcinogens and carbon emissions. Every watt of electricity that flowed into our home generated a corresponding tick of the meter which was paid every month based on the value that the meter reader saw when he visited our neighborhood.
When oil was cheap, the effects of climate change unknown, and distributed PV (i.e. rooftop solar panels) nonexistent, the system worked perfectly. However, none of those are true anymore. We are beginning to realize the true costs of oil and coal in the form of incessant foreign wars, climate change, pollution, oil spills, deforestation, and mercury poisoning. We are running out of easy-to-access sources of oil, which has caused the price of crude oil to go up 400% in the last decade. And, most disruptive to the model is the fact that anyone can install a photovoltaic panel on their house which promises to supply them with free electricity. These factors are quickly necessitating a paradigm shift in our utility model.
One of the main problems is that rooftop PV eats away at the bottom line of utilities. A large portion of what we pay for electricity goes towards supporting the fixed costs of the grid (line and power plant maintenance, administrative costs, etc). If the utility guarantees that they will purchase PV power from homes at a set price, then, assuming that the amortized price per KWH produced by a PV panel is less than it is to purchase from the utility (called grid parity, which it is in Hawai'i and the southern US) it makes financial sense on an individual level for everyone to oversize their systems. The excess power that they produce ensures that their meter runs backward enough so that they don't have to pay an electric bill. However, this creates two related problems:
1) The sun isn't always shining. So, the service that the utility provides is still necessary. They still need to maintain their power plants and the lines to your house. When a cloud passes overhead or the sun sets, the utility then needs to crank up their generators to cover the sudden loss of power.
2) The more homes that oversize their systems, the higher the burden of covering the fixed costs of the grid (line and power planet maintenance, administrative costs, etc) for the rest of the homes. You still with me? The fixed costs of the grid don't change as rooftop PV panels gain in popularity. So, imagine an island of 100 homes. There is a central power plant and everyone is connected to it. That plant and the power lines cost $100,000 ($1,000 per home) per year to maintain. One day an expert PV salesman shows up, and sells large PV systems to 10 houses. Those 10 homes are no longer paying an electric bill, because the utility is paying them the avoided cost of fuel (which Kaua'i does) for their excess power or simply running their meter backwards (net metering) for every KWH they receive. However, the utility still needs to maintain the same generation capacity, because peak power occurs at night and nobody is generating any solar power at night. So, the overhead costs are now saddled on the remaining 90 homes ($1,111 per home). As rates rise, the PV salesman is able to sell systems to 30 people the next year. Meaning that only 60 homes are paying for the overhead of the system ($1,666 per home) which is factored into their usual rates (which also include variable price inputs like fuel). Pretty soon, everyone but the lowest income group on the island now have oversized PV systems and those few remaining folks are footing the bill. Rates have risen up to 20% in some places for those exact reasons. This doesn't work. Look at this recent example from HECO for what utilities are doing about it (limiting the expansion of solar).
We're stuck in a world where the utility company charges the same amount per electron whether it came from oil or the sun. Because of this, we have a dwindling customer base which will result in either the utility going bankrupt (and not being able to maintain the grid) or the lowest income families being pushed into destitution with higher rates.
The system is inherently flawed and bound to fail.
In order to live within our means, we need to incentivize electricity when it's readily available (when the sun is shining) and discourage it when it's not. We have to change the way that we look at the flow of electrons. Instead of a one-way line from utility to us at a set price, we need to democratize our energy so that electrons become a commodity which we buy, sell, and trade at a market price based on the current supply and demand. We can very quickly revolutionize our island by becoming fully participatory members of a completely distributed energy system. Our utility can transition from being an energy supplier, to being merely the middleman in a market of electrons.
But it starts with smart meters.
The fundamental problem with analog meters is that all we know about our electricity consumption is in a monthly total. We don't know if we consumed that power when it was readily available (sunny day) or when it wasn't (late at night). So all electricity outflow is priced at one rate, and all electricity inflow at another. There is no way to distinguish between an electron that was generated on a sunny day on a PV panel in a field in Lawai or at night in the bowels of Port Allen in an internal combustion engine. Daytime use can't be incentivized, and a variable fair market price for electricity which ensures that the overhead of the grid is being spread out evenly is impossible. The one-way flow of information from analog meters ensure the failure of distributed renewables into our grid, and they maintain the status-quo of the traditional utility-customer model.
If we have any hope of realizing 100% renewables for Kaua'i, accurately pricing energy consumption and production based on supply and demand is a necessary first step.
It's time to shed the strangehold of oil on our isolated island community and minimize our contribution to climate change by using the resources that we have (sun, wind, and water) to power our island. A smart grid, by enabling time of use pricing and furthering consumer education based on real time energy usage, is a necessary bridge to a sustainable future.
*As always, I feel the need for a bit of a guilty disclaimer. Being off-grid removes me from this system. Instead of being a participatory member in a potential vibrant market of electrons, I become a self contained island. When it's sunny and my batteries are topped off, my excess electrons are completely wasted. Living off-grid is a relatively inefficient use of resources.
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