The ITC has helped spur the industry and that subsidy is no where near what the oil industry gets. Did you know if you know the oil industry only pays taxes like the sold 85 barrels even though they sold 100 barrels. Talk about BS. On large scale projects it is already more affordable than other energy. We just bid one for a utility company and the cost was below $2 a watt.
In terms of PPA...there are two main customers for this concept. In Minnesota there are 3 types of utilities: for profit, city owned and some type of rural or cooperative that the members own. The last two can not use the ITC because they dont pay taxes therefore they look for some sort of PPA to drive the cost down where the owner of the array utilizes the ITC and depreciates the asset. The other PPA type options are for non profit organizations and residential customers that cant afford the upfront cost. In the case of the residential customer without capital they are definitely paying a premium....but this is no different than anything else they purchase like a used car from Louie's Auto where Louie provides the financing.
Net metering is kind of funny subject. We are doing a project for a cooperative and they had an open house that I sat with some of their executives and most of the time no one was there to ask questions. The state just passed a law to allow the non profit utility companies to charge solar and wind customers a fee of $5 to $10 a month and they were trilled about this. (Side note renewable energy has become a republican versus democrat issue and the republicans passed this in Minnesota even though the original law was bi partisan and done with a republican governor). I asked them how many current wind and solar customers they had...the answer 12. I really doubt the extra $60 a month is going to change the budget at the utility company. The other interesting thing which most people dont know is the actual price of electricity. They spread it out and in Minnesota charge two rates winter and a higher one in summer. The day I was at the open house was a very hot day and demand was very high. The amount the utility company was paying to buy electricity to sell to their members was over $15 a kWh yet they were charging their customers $0.14 a huge loss. Granted there are other times where they are paying $0.02 and charging $0.14. You would think that they would be happy for the solar customer who is feeding the grid and they have to buy less at $15. I didnt bring this up because I am making a sale with them but what about the guy down the block that buys energy effeciient appliances, LED light bulbs etc and consumes way less....why not charge him more to support the grid?
One other thing that will drive solar is the consumption of the homes will continue to go down thus less is needed in terms of size of an array. Thinks like tablets consume way less than computers. From a safety standpoint the USA is less vulnerable to attacks if the power source is not centralized. If I wanted to attack the USA I would go after a power plant.
Since this is the stock section. Look at Solar Edge.....they recently went public and they have a great product....Elon is teaming up with them. Short Enphase they just got passed by Solar Edge and will have problems.
I understand what you're saying about subsidies for other energy. Oil has been massively subsidized for 100 years and that is why we've had minimal energy innovation because it is so hard to compete with it. If you get rid of the ITC in 2017 then I think you will see the industry consolidate itself and the bad players forced out, installation costs go down rather than be propped up by subsidy. Avg cost right now 4.4 per watt, I believe in France/Germany once they removed subsidy this got down to 2.6 to 2.8. Imagine if solar could get down to the 2 range in the next 6-7 years? It would really accelerate the adoption process. Focus should be on getting costs so low and quality so high that you leave people no choice but to get solar. Make them compete until someone comes up with an Apple or Google like product innovation.
As far as PPA goes. It can definitely be a good deal city/muni owned since they can't use ITC. For those that can't shell out the 15-25k for a system, I don't think it is a very good product. Atleast financing is a much better one. When leasing a car, it is usually because it is cheaper than buying that particular car and allows you to have a higher quality vehicle or more flexibility in obtaining a different car in the short-term. With solar, the product is pretty much all the same and accomplishes the same goal. Wouldn't it be better for homeowners if they just bought the actual system and owned it themselves? Just get a 20 year loan at 3-4% (rates should be low given minimal risk, which people will see as years go on. Although not sure how you collateralize that debt) Just seems buying/financing a far better option for residential than PPA. Jigger Shah, the guy whose book I linked a few posts ago, basically invented PPA FWIW.
The reason they're not more friendly to net metering isn't because it wouldn't help them smooth out demand. It's because they know long-term they are going to be screwed if their business model is disrupted. So don't even try to work with solar because the end game to working with them is decentralizing how power gets distributed and flys in the face of everything they've sold for the last 100 years. They actually are big purchasers of Elon's product, the PowerPack, it helps them smooth out demand. Hopefully the product will make sense for homeowners but it will probably take another 5-10 years. Not much different than something like Big Tobacco putting a bunch of crap out there to keep the debate going for a little while.
I think I once read there are like 40 times a year when demand spikes and it costs the utilities a ton in profit. So in that sense, storage or solar will help them a lot.
My guess is you see the regulators step in eventually and go with some type of "solar rate" that is somewhere in the middle of wholesale and retail. I understand your Minnesota example but in Hawaii where everyone has rooftop, you've got to have some type of grid maintenance. Our grid needs modernizing and upgrades nationwide as well, but that's another issue.
