Thread by @mafernando

Whilst everyone is focused on the distributional fairness of the #SL CEB price hikes - there is a huge (and growing) problem (for the CEB - Rooftop Solar (RTS):

https://twitter.com/Numberslka/status/1557013143460913153

The capital cost of RTS in SL has fallen from $10/Watt in 2011, to $5/W in 2015, $2/W in 2019 (actual obtained quotes).

India currently installs RTS at $0.65-0.7/W. The panel itself is $.27/W (India or China price) - the balance is mounting racks, inverter, wiring and labour.

The levelized cost (cost of energy) of RTS is the lowest in India (US$ ¢ 6.6/KWh) and China (¢ 6.8/KWh), with the USA (¢ 23.8/KWh) and UK (¢ 25.1/KWh).

pv-magazine-india.com/2021/10/21/ind…

Based on above India RTS pricing, and applying an approx 30% increase for labour & non-panel costs, SL should be able to install RTS at ~$0.85/W and an energy cost of US¢ 8.5/KWh, or LKR Rs. 30-35/KWh (at LKR 360/$).

A household in SL consuming 600KWh per month (1 AC at night ~= 300KWh/month) can wipe out their bill with a 5KW system. This should cost $4300 upfront, which will then zero out bills for next 25 years.

A HH consuming 135KWh, will need a 0.9KW system - costing $750 (~Rs 270k).

It’s fairly obvious what the problem for the CEB is. If RTS cost is Rs. 35/unit, then anyone over the 120 unit pricing will start moving to RTS in droves.

https://twitter.com/defaultlk/status/1558357511165870080

This bucket (>120units/m consumers) represents 50% of CEB revenue.

https://twitter.com/defaultlk/status/1558661554354020352

And generate Rs. 33bn in subsidies which are then used to fund the rest of the CEB’s operations.

https://twitter.com/DefaultLk/status/1558661541490311169

Already, prior to 2022, RTS was growing at a clip of 10MW/month. 30-40k of CEB’s highest revenue customers have already ‘left’ the grid with RTS. RTS is a backdoor liberalisation of generation what CEB will find very very hard to stop.

Other countries/states, e.g Australia, Florida, Arizona, with a big disparity between the paid tariff and RTS cost, have experienced this - called the “utility death spiral”:
thehindubusinessline.com/opinion/are-ro…

The solution is not to ban, or slow RTS. RTS is by far the cheapest, cleanest (no pollution), greenest (no carbon) power solution now for any country. Massive amount of RTS (especially with batteries) is the future of the Grid.

https://twitter.com/mzjacobson/status/1526433539566080000

Banning RTS, to help the CEB, would be robbing Peter (consumers) to pay Paul (CEB). At the same time, if all the best customers opt-out of the CEB, then everyone will lose - Grid will be starved of investment. This is a classic public market ‘adverse selection’ problem.

Like in any system where a Public Good needs to be maintained alongside a private market - e.g Education (pvt schools & unis), Healthcare (pvt hospitals) - the solution is in careful regulated pricing, tariff structures, and transparent funding of subsidies (general taxes) /End.