If you can't connect backfeed to the grid, you can't connect new load to the grid, either.

It shouldn't matter which way the watts are flowing for a particular customer.

Except as mentioned above, the power company becomes free off-site "storage" for your off-peak power. You generate power you don't need in the morning, and you get it back "free" from them in the afternoon when you get home from work.

Mod parent up – and Hawaii has some specific issues.

Hawaii has basically hit the saturation point of renewable energy until a decent storage system is developed. Renewables output tends to be erratic. If the wind is up or the sun is out the utilities has to bring down their gas generators, wind dies down or the sun sets and they have to bring on the generators. In other parts of the world they could export the electricity but that’s not an option here. Basically they have hit the saturation point. If you added more renewables the utilities would leave the power plants because they could not bring them up fast enough.

Fun fact – Germany this summer charged customers who exported renewable energy onto the grid. They mainly have coal plants which take hours to take off / bring online. A few days of good wind and low demand meant there was nowhere for the electric to go. I think Germany is trying to fix that with more transmission line but it gives you an idea of the problem.

If we had truly privatized power companies, I'd expect this behavior. After all, it would only make sense. You invested a bunch of money to build a whole infrastructure for power generation, doing all of your cost calculations based on people relying on it for 100% of their electricity needs. You have no provisions in place to store incoming electricity for future resale to users. What upside would you have if your customers start to generate their own power?

But we don't. We have government regulated monopolies. I'm not trying to argue the merits for or against the arrangement right now, except to say this means to me, they should be required to comply with whatever the government believes is the best way forward. If government is going to issue tax breaks and incentives for installing solar power? Then it's clear it thinks this type of energy generation on an individual basis should be encouraged. So how can it sit by and tolerate the power companies imposing rules that run counter to that goal?

Personally, I think as a homeowner, my ideal solar installation would be one where I don't need to be tied to the grid at all. Tesla is working on battery packs for homes that look a lot like refrigerators, which you'd couple to a solar panel installation to provide power at night or during bad weather conditions when the panels aren't capturing energy. I've heard that currently, they make the cost of the installation a bit prohibitive, but there's a good chance they'll become successful as part of a mainstream installation in the next 3 years or so. From what I've heard, reviewers of the setup said it was possible to run the entire home for as long as 48 hours or so on nothing but the battery pack, as long as power was used somewhat sensibly (not just leaving all the lights on in the house for no reason, etc.).
 

That's not an entirely fair assessment. Solar feed-in is during peak power rates and the owner is at best reimbursed at the fixed residential rate which is frequently 1/4 to 1/8 of the peak rate. I agree that solar users are going to need to contribute to the grid but the power companies are being very short sided here.

Without the feed-in of peak solar output and the credits that generates there is no reason not to install the batteries needed to go fully off grid where the homeowner won't be contributing anything to the grid. There is a very fine line here where battery storage becomes viable and we are approaching it rapidly. Solar continues to fall in cost, it's already approaching price parity with nuclear power without subsidies. If it continues to fall to $0.50 a watt it's going to reach cost the amortized cost of coal generation. It's beginning to hit critical mass, the more demand the steeper costs will drop which lowers costs and increases demand more. After years of subsidies priming the pump solar is finally gaining momentum and it scares these power companies to death because they are invested almost entirely in hydrocarbons. They are fighting solar because of these investments.

The scary thing here is that if they don't turn things around and realize the potential of solar and embrace it they are going to get displaced by battery storage and then the power company is out of business. There is a very real possibility that by 2030 solar is going to be THE source of power.

First they ignore you, then they laugh at you, then they fight you, then you win.

Mahatma Gandhi

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Solar power continues to get cheaper. I'm interested in the implications for the broader energy market. Even a 5% drop in demand for coal, natural gas, and oil could have a tremendous impact on the boarder market.

They should consider doing something like the Bath County Pumped Storage Station [wikipedia.org] in Virginia where:

I imagine this would work in Hawaii too...

The percentage depletion allowance: This lets oil companies deduct about 15% of the money generated from a well from its taxes. Eliminating it would save about $1 billion a year.

The deduction essentially lets oil companies treat oil in the ground as capital equipment. For any industry, the value of that equipment can be written down each year.

But critics say oil in the ground is not capital equipment, but a national resource that the oil companies are simply using for their own profit.

The foreign tax credit: This provision gives companies a credit for any taxes they pay to other countries. Altering this tax credit would save about $850 million a year.

Foreign governments can collect money from oil companies through royalties -- fees for depleting their national resources -- and income taxes.

A royalty would be deducted as a cost of doing business, and would likely shave about 30% off a company's tax bill. Categorized as income tax, it is 100% deductible.

Foreign governments long ago grew wise to the U.S. tax code. To reduce costs for everyone involved and attract business, they agreed to call some royalties income taxes, allowing oil companies to take the 100% deduction on a bigger slice of their bill.

Intangible drilling costs: This lets the industry write off about $780 million a year for things like wages, fuel, repairs and hauling costs.

All industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.

Here's the practical outcome of these policies: http://www.americanprogress.org/issues/green/news/2013/12/20/81497/baucus-tax-reform-cuts-46-billion-in-oil-breaks/ [americanprogress.org]

The oil industry has prospered over the past decade, thanks to high oil and gasoline prices. The five largest companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—earned more than $1 trillion. In the first nine months of 2013, these five companies earned a combined $71 billion in profits. Certainly, these companies and other large oil companies will prosper without $40 billion in special tax breaks over the next decade.

The tax subsidies for renewable energy are dwarfed by the tax subsidies for oil and gas. The oil and gas production industry is hugely profitable. When an industry has the top five companies making a trillion dollars profit over ten years why do they need any tax breaks that other businesses don't get?

The real rich bastards are the oil company executives. You know how they spend that vast profit? Stock buybacks. About 25% of big oil company profit is going into stock buy back programs, which is more then they spend on exploration and acquisitions. Because of way that executive compensation is structured with stock options and deferred payouts, this ends up being a huge multiplier payout multiplier for the executives. They get their stock at a ridiculous discount, pump up the value and realize vast personal wealth.

All the investors are happy because they see their valuation go up as well so they don't complain. It's short term gain over long term profit. According to this 2007 Bloomberg article [bloomberg.com], the big oil companies are effectively liquidating themselves over the longer term.

If Chevron Corp. keeps buying back its stock at the current rate, the com

Really? So, if I put a natural gas generator on my property the government will pay for 60% of the material and installation cost? As well as require the utility to buy electricity from me at a price above what it costs them to produce it themselves? I don't think so.

Solar must be the most subsidized electricity source out there today. I won't claim to be an expert but I've talked to people around here that are in the wind and solar business. The level of subsidies on wind and solar is mind blowing. These people will basically get the state and federal government to pay for all the equipment but they still can't build up wind and solar power because they would not be able to make enough money to pay the rent on the land. Think about that, they get the sun and wind for free, and the solar panels and windmills paid for by my tax dollars, and they still can't make any money.

At least with the subsidized fossil fuels I pay for with my tax dollars I know my heat pump will run on these cold and windless nights.

You don't need giant indoor dam, you just need a giant outdoor tank higher than the surrounding region. The problem is, big tanks like that are kinda expensive. Millions of dollars.

Expensive and, more importantly, dangerous - storing large amounts of power would risk a rather large flood. It would make more sense to excavate an underground cavern and pump water out of it to store power. This is (likely) cheaper, safer and allows far more height difference, thus more power per same amount of water and storage space. And of course you get a huge cistern out of the deal, too.

Let's assume we excavate our cistern so we get a water head of 100m for our turbine. Also, let's assume the turbine+generator is 80% efficient. A single cubic meter of water weights one metric ton, so we'll get 1000kg*100m*9.8m/s^2 * 0.8 = 784 kJ = 217.8 kWh out of it.

According to Reuters [reuters.com], New York State's electricity usage peaked last summer at 33,955MW, so if we'd want to provide every single watt for, say, two weeks from our reservoir when fully loaded (completely empty of water) at maximum power draw, we'd ned to excavate 24h/d*14d*33955MW/217.8kWh/m^3= 53 million cubic meters of rock. This works out to a square 10 meters high and 2.3 kilometers on each direction (plus enough to compensate for support pillars). Expensive, yes, but also ridiculously oversized and perfectly doable with today's technology. Also, doubling the depth doubles the power contained in every cubic foot of water, leading to smaller cistern required.