The 3-4c wholesale rate is for base power (giant infrastructure generators, hydroelectric dams and such things), but solar knocks the top off the mid-day demand curve, at which time PG&E is paying much more for "peaker" power generation. But they don't have to pay you the peaker rate, they pay you the baseline rate.

Anyway, to my mind, any system in which current comes out of your PV installation at 3 cents and flows directly into your neighbor's air conditioner at 34 cents is a prima facie scam.

Even peaker plants run ~15 cents these days, since the price of gas has fallen so low.

edit: I'm more familiar with the Texas grid, but beyond the cheapish price of modern peaker plants, in that case the most expensive input sources (small peaker plants, and esp. spot-market purchases) are rarely used at all. Demand prediction and management is good enough to avoid the more expensive inputs, through a mixture of local generation management and advance wholesale purchases on the DC interconnects. On the handful of days when some issue causes a shortfall, it would be valuable to buy residential solar inputs, but this happens about 5-6 days a year. To handle those days, most utilities have a savings-rebate program, where if you agree to reduce your usage between 2-5pm on these handful of days, you get a $0.60/kwh credit. So they solve their occasional peak problem by just turning your thermostat up 2º and "buying" the unused energy at a premium price.

Yeah, but that makes PG&E's "smartrate" summer afternoon price of 75c per kWh even less justifiable.

This data may not be publicly available, but I'd love to see graphs of current flowing out of PG&E substations vs. time of day. At some point the PV generation capacity is going to make them have weird upside-down diurnal cycles.

Something I worry about with solar is once power is psychologically "free" I'll be tempted to set the thermostat down to 65F or whatever, and end up paying full rate when clouds blow by. I think it would be difficult not to increase power use once its free. I'm not talking about explicitly leaving stuff on for fun, but more like "well, power is free, so I guess I can afford a tropical reef tank instead of a plain fish tank" and there goes 1 KW of lighting continuously plus a chiller whereas right now my fish and I are very happy with ten watts of LEDs. This kind of thing needs to be taken into the financial analysis.

Also in the winter if I have "free" electricity and have to pay for natgas to heat, I'll simply buy a raid array of plug in electrical heaters to eliminate that "free" electricity and eliminate paying for some natgas. Or maybe I'll just install a bigger raid array. Either way, I like free heat in the winter and typical analysis usually doesn't consider heating. If you pay me 3 cents per KWh in the winter, and charge me 15 cents equivalent in natgas energy, I'm not going to sell you a single KWh until my house is above 75F in January.

Your array of inexpensive resistors will heat your house just as much (or probably much less) than a window would.

But you can use heat pumps, and you can do deep storage of summer heat, for use at winter (no idea about how well it works at your place). Both are very efficient.

Anyway, if your marginal price for electricity is zero, and the marginal externalities are also zero, there's not much problem in using it.

Heating your house with electricity is extremely inefficient. 5KW of "excess" electricity won't go very far in heating your house when it's cold outside, and any excess you might have will be less in the winter because of your latitude.

I'm not saying you can't do it, but even with today's cheap solar panels it's not likely to be a good value proposition.

Heating your house _directly_ with electricity is inefficient. Using that electricity to run a heat pump can be very efficient (assuming you have a large enough heat reservoir (e.g. a few hundred feet of pipe buried underground))

How can heating your house with electricity be less than 100% efficient?

Turning electricity into heat isn't all the work you can get out of the energy. Heat pumps get even more, by using the energy to move heat from one place to another (e.g from ambient outside air to the volume to be heated), and the heat from this process also heats the volume.

If the air outside my house is warmer than the air inside my house, I'll just open the windows. Generally when one needs a heater it is because the system surrounding the house is colder, sometimes much colder, than the house itself.

Cold makes it harder on the heat pump, but not impossible. Heat pumps use a compressor (just like AC unit). If the pump can create a mass of gas colder than the outside air, then that mass will be warmed by the outside air (no matter what the absolute temps are).

In the limit of course (too cold outside), a heat pump is just as efficient as using the electricity for heat directly.

If that electrical energy was generated from gas, then it's often more efficient to burn the gas directly for heat. So depends when you take as the starting point for 100%

I suppose that part of the price difference is that you're an unreliable source of unreliable electricity, whereas your neighbor pays for stable, reliable service.