I don’t believe in free lunches. Whenever somebody offers me anything for “free” I immediately ask myself what’s in it for them. If the answer doesn’t bother me, I may go with the offer. microFIT PV is no different, so here is the best explanation I could think of.
This is the second part of a series analyzing what are the incentives for the Government to offer such a generous price for the solar-produced electricity. If you didn’t do it before, you may want to read first part 1.
Currently, the electrical power is centrally generated at power plants, but the consumption is distributed over a large geographical area. To link the generators to the consumers, the electrical system we know as “the grid” employs a transmission network (we usually see it as huge power towers holding electrical wires) and then a distribution network all the way to our homes, factories and offices.
But delivering electricity to your electrical outlet is not 100% efficient. In fact, it is estimated that the transmission and distribution losses are around 6.5% in US. In Quebec, they range from 4.5 to 8%, depending on the temperature and the operating parameters.
What’s special about the microFIT PV generators (solar panels) is that they are distributed almost the same way the consumers are. This means that the power generated by the microFIT PV installations will be consumed locally and there is minimal transmission of power to distant consumers. No transmission means there are minimal losses, and that’s a certain win for everybody.
Even more, every locally generated kWh used by a customer will displace a far-generated one, so the existing transmission lines will probably get a (minor) break.
There is also something else here: no transmission of power also means that adding microFIT systems to the grid will generally not load the network. This is in contrast to adding a regular power plant (even a solar or wind farm), which can potentially require improving/updating the transmission network. Again, this eases the Government position, because it’s certain microFIT installations will add no burden to the Government purse, and it may slightly ease the need for new/bigger transmission lines.
P.S. If you want to read the rest of my analysis, go on and read part 3.