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Got a solar panel? Time for a little energy arbitrage.
The new film Dumb Money gives home traders the Hollywood treatment. The movie, based on the GameStop saga of 2021, recounts how amateur stock enthusiasts and trolls united on online platforms like Reddit drove up the stock price of an over-the-hill video game store and caused huge losses for hedge funds that bet against the stock.
The bizarre episode shone a spotlight on just how many armchair stock jockeys are out there. Now, another type of trader is quietly growing in popularity: the garage energy baron.
Online, you can find solar enthusiasts not only celebrating how much energy their panels created but also how much money they made by selling energy back to the electric utility. As more homes can make and store their own energy, more homeowners are trying to get in on “energy arbitrage.” They are buying low and selling high, though this time the product in question is not a share of company stock, but a kilowatt-hour of energy.
Most people have minimal control of their home energy. It is a resource we consume, and the principal way to affect the monthly bill is by turning up the AC or turning off the lights. The roughly 5 percent of Americans with solar panels, along with those who have wind turbines or other ways to generate electricity, have been changing the equation by becoming energy providers rather than passive recipients.
Home solar lowers the amount of energy a home must buy from the grid. Sometimes, when the sun shines high and unobstructed, homeowners with a large solar setup can make more energy than the home requires. In most places, they can turn around and sell the excess energy back to the grid. Net metering, as it is called, helps to recoup the five-figure sum needed to pay for solar panels in the first place.
The revenue can be eye-popping. In the Tesla Solar subreddit, a hive of people with Elon Musk’s solar panels and integrated home energy systems, users recount the details of their system and their savings. A poster from Texas this week uploaded a screenshot showing they made $600 in a month by selling back energy as part of Tesla Electric, the company’s virtual power plant (VPP).
Tesla Electric works because of a new wrinkle in the energy game. With the advent of products such as Tesla’s Powerwall — basically a big, intelligent battery for the house — homeowners can now make their own energy and store it for later, which opens new possibilities. The first is a no-brainer: Stashing excess energy in the battery creates a backup power supply in case of a blackout. However, the ability to charge and discharge the battery at will gives rise to gamesmanship.
Suppose that instead of selling solar energy to the grid right away (in the afternoon when there’s lots of it), a homeowner stashes it and waits. In the evening, when energy demand rises as people get home from work and the price of energy rises, that’s when their system hits the “sell button.”
This is energy arbitrage. It earns the biggest windfalls when prices are volatile, with big gaps between high and low. That’s exactly what happened in Australia in 2022, where wild markets earned record profits for anyone who could use a big battery to buy and sell energy. In Texas, the Tesla Electric VPP automatically sells the energy stored in customers’ home Powerwalls when the price is the highest (and refills the battery when electricity is cheap), which leads to windfall profits during a major “sell event.” One Redditor claimed to be up more than $800 this summer, mostly by using his Powerwall to perform energy arbitrage.
Indeed, homeowners don’t need solar panels or wind turbines to do this, says Jeff Maguire, a researcher at the National Renewable Energy Lab.
“If you're in that scenario and you have a battery, you can charge the battery when energy is cheap and discharge it when energy is expensive,” he says. “You'll make a little bit of profit, and you can do that every day. It’s called energy arbitrage. It's one way to pay [yourself] back for the batteries. It's usually not enough to cover the cost of the battery itself, but it certainly helps, and then you'll have it for resilience when you need it.”
Of course, all this scheming and strategy is reliant upon one basic idea: that a person can sell electricity back to the grid at fair market price. There is no guarantee this will continue indefinitely.
Over the past couple of years, state lawmakers and electric utility operators around the country have proposed cutting off net metering, slashing the rates residents get paid for extra energy. One (disputed) argument from utilities is “cost-shift,” the idea that people with solar panels are subsidized by everybody else who pays for standard electricity, and who pays for the upkeep of the grid as part of every kWh they purchase. Another is technical: America’s aging infrastructure wasn’t built with this “backfeeding” in mind, and may not be able to deal with a very large number of homes sending juice back onto the grid.
The gambit is also about the big utilities’ bottom line. They don’t want to have to “curtail” some of their solar because there’s too much on the grid, thanks to net-metering residents. And they, too, are engaged in the energy arbitrage game.
Many electric utilities are installing their own large energy storage facilities, which is crucial as the country uses more and more renewable energy: If people can’t move their electricity consumption to the times of peak energy supply — say, by charging their EV in the middle of the day when the sun shines — then we need to save lots of our renewable energy for later. When the utility stashes solar energy made from the noontime sun and sells it at 7 p.m. when residential electricity is costlier, it makes a little profit in the process to help pay for the cost of those storage systems.
What all this means for the home energy trader could vary wildly state by state. New Hampshire, in a surprise, just decided against slashing net metering rates. Sunny California, the country’s biggest residential solar market, cut energy payments for new PV installations by 75 percent – in theory because there’s already too much solar – while grandfathering in all the people who already have panels.
It may turn out that if you want to be a solar trader, you should have started yesterday.
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New York City may very well be the epicenter of this particular fight.
It’s official: the Moss Landing battery fire has galvanized a gigantic pipeline of opposition to energy storage systems across the country.
As I’ve chronicled extensively throughout this year, Moss Landing was a technological outlier that used outdated battery technology. But the January incident played into existing fears and anxieties across the U.S. about the dangers of large battery fires generally, latent from years of e-scooters and cellphones ablaze from faulty lithium-ion tech. Concerned residents fighting projects in their backyards have successfully seized upon the fact that there’s no known way to quickly extinguish big fires at energy storage sites, and are winning particularly in wildfire-prone areas.
How successful was Moss Landing at enlivening opponents of energy storage? Since the California disaster six months ago, more than 6 gigawatts of BESS has received opposition from activists explicitly tying their campaigns to the incident, Heatmap Pro® researcher Charlie Clynes told me in an interview earlier this month.
Matt Eisenson of Columbia University’s Sabin Center for Climate Law agreed that there’s been a spike in opposition, telling me that we are currently seeing “more instances of opposition to battery storage than we have in past years.” And while Eisenson said he couldn’t speak to the impacts of the fire specifically on that rise, he acknowledged that the disaster set “a harmful precedent” at the same time “battery storage is becoming much more present.”
“The type of fire that occurred there is unlikely to occur with modern technology, but the Moss Landing example [now] tends to come up across the country,” Eisenson said.
Some of the fresh opposition is in rural agricultural communities such as Grundy County, Illinois, which just banned energy storage systems indefinitely “until the science is settled.” But the most crucial place to watch seems to be New York City, for two reasons: One, it’s where a lot of energy storage is being developed all at once; and two, it has a hyper-saturated media market where criticism can receive more national media attention than it would in other parts of the country.
Someone who’s felt this pressure firsthand is Nick Lombardi, senior vice president of project development for battery storage company NineDot Energy. NineDot and other battery storage developers had spent years laying the groundwork in New York City to build out the energy storage necessary for the city to meet its net-zero climate goals. More recently they’ve faced crowds of protestors against a battery storage facility in Queens, and in Staten Island endured hecklers at public meetings.
“We’ve been developing projects in New York City for a few years now, and for a long time we didn’t run into opposition to our projects or really any sort of meaningful negative coverage in the press. All of that really changed about six months ago,” Lombardi said.
The battery storage developer insists that opposition to the technology is not popular and represents a fringe group. Lombardi told me that the company has more than 50 battery storage sites in development across New York City, and only faced “durable opposition” at “three or four sites.” The company also told me it has yet to receive the kind of email complaint flood that would demonstrate widespread opposition.
This is visible in the politicians who’ve picked up the anti-BESS mantle: GOP mayoral candidate Curtis Sliwa’s become a champion for the cause, but mayor Eric Adams’ “City of Yes” campaign itself would provide for the construction of these facilities. (While Democratic mayoral nominee Zohran Mamdani has not focused on BESS, it’s quite unlikely the climate hawkish democratic socialist would try to derail these projects.)
Lombardi told me he now views Moss Landing as a “catalyst” for opposition in the NYC metro area. “Suddenly there’s national headlines about what’s happening,” he told me. “There were incidents in the past that were in the news, but Moss Landing was headline news for a while, and that combined with the fact people knew it was happening in their city combined to create a new level of awareness.”
He added that six months after the blaze, it feels like developers in the city have a better handle on the situation. “We’ve spent a lot of time in reaction to that to make sure we’re organized and making sure we’re in contact with elected officials, community officials, [and] coordinated with utilities,” Lombardi said.
And more on the biggest conflicts around renewable energy projects in Kentucky, Ohio, and Maryland.
1. St. Croix County, Wisconsin - Solar opponents in this county see themselves as the front line in the fight over Trump’s “Big Beautiful” law and its repeal of Inflation Reduction Act tax credits.
2. Barren County, Kentucky - How much wood could a Wood Duck solar farm chuck if it didn’t get approved in the first place? We may be about to find out.
3. Iberia Parish, Louisiana - Another potential proxy battle over IRA tax credits is going down in Louisiana, where residents are calling to extend a solar moratorium that is about to expire so projects can’t start construction.
4. Baltimore County, Maryland – The fight over a transmission line in Maryland could have lasting impacts for renewable energy across the country.
5. Worcester County, Maryland – Elsewhere in Maryland, the MarWin offshore wind project appears to have landed in the crosshairs of Trump’s Environmental Protection Agency.
6. Clark County, Ohio - Consider me wishing Invenergy good luck getting a new solar farm permitted in Ohio.
7. Searcy County, Arkansas - An anti-wind state legislator has gone and posted a slide deck that RWE provided to county officials, ginning up fresh uproar against potential wind development.
Talking local development moratoria with Heatmap’s own Charlie Clynes.
This week’s conversation is special: I chatted with Charlie Clynes, Heatmap Pro®’s very own in-house researcher. Charlie just released a herculean project tracking all of the nation’s county-level moratoria and restrictive ordinances attacking renewable energy. The conclusion? Essentially a fifth of the country is now either closed off to solar and wind entirely or much harder to build. I decided to chat with him about the work so you could hear about why it’s an important report you should most definitely read.
The following chat was lightly edited for clarity. Let’s dive in.
Tell me about the project you embarked on here.
Heatmap’s research team set out last June to call every county in the United States that had zoning authority, and we asked them if they’ve passed ordinances to restrict renewable energy, or if they have renewable energy projects in their communities that have been opposed. There’s specific criteria we’ve used to determine if an ordinance is restrictive, but by and large, it’s pretty easy to tell once a county sends you an ordinance if it is going to restrict development or not.
The vast majority of counties responded, and this has been a process that’s allowed us to gather an extraordinary amount of data about whether counties have been restricting wind, solar and other renewables. The topline conclusion is that restrictions are much worse than previously accounted for. I mean, 605 counties now have some type of restriction on renewable energy — setbacks that make it really hard to build wind or solar, moratoriums that outright ban wind and solar. Then there’s 182 municipality laws where counties don’t have zoning jurisdiction.
We’re seeing this pretty much everywhere throughout the country. No place is safe except for states who put in laws preventing jurisdictions from passing restrictions — and even then, renewable energy companies are facing uphill battles in getting to a point in the process where the state will step in and overrule a county restriction. It’s bad.
Getting into the nitty-gritty, what has changed in the past few years? We’ve known these numbers were increasing, but what do you think accounts for the status we’re in now?
One is we’re seeing a high number of renewables coming into communities. But I think attitudes started changing too, especially in places that have been fairly saturated with renewable energy like Virginia, where solar’s been a presence for more than a decade now. There have been enough projects where people have bad experiences that color their opinion of the industry as a whole.
There’s also a few narratives that have taken shape. One is this idea solar is eating up prime farmland, or that it’ll erode the rural character of that area. Another big one is the environment, especially with wind on bird deaths, even though the number of birds killed by wind sounds big until you compare it to other sources.
There are so many developers and so many projects in so many places of the world that there are examples where either something goes wrong with a project or a developer doesn’t follow best practices. I think those have a lot more staying power in the public perception of renewable energy than the many successful projects that go without a hiccup and don’t bother people.
Are people saying no outright to renewable energy? Or is this saying yes with some form of reasonable restrictions?
It depends on where you look and how much solar there is in a community.
One thing I’ve seen in Virginia, for example, is counties setting caps on the total acreage solar can occupy, and those will be only 20 acres above the solar already built, so it’s effectively blocking solar. In places that are more sparsely populated, you tend to see restrictive setbacks that have the effect of outright banning wind — mile-long setbacks are often insurmountable for developers. Or there’ll be regulations to constrict the scale of a project quite a bit but don’t ban the technologies outright.
What in your research gives you hope?
States that have administrations determined to build out renewables have started to override these local restrictions: Michigan, Illinois, Washington, California, a few others. This is almost certainly going to have an impact.
I think the other thing is there are places in red states that have had very good experiences with renewable energy by and large. Texas, despite having the most wind generation in the nation, has not seen nearly as much opposition to wind, solar, and battery storage. It’s owing to the fact people in Texas generally are inclined to support energy projects in general and have seen wind and solar bring money into these small communities that otherwise wouldn’t get a lot of attention.