This whole article is weird to me as a New Zealander, since most of the problems comes from weirdly, not letting the market set the buy-back rate of electricity.<p>I worked for one of New Zealand&#x27;s largest electricity generators and retailers, and we investigated a solar market. Here&#x27;s how it works.<p>Electricity is broken up into generation costs, distribution costs, retail costs, regulatory costs, and profit.<p>Generation capacity goes up and down throughout the day, as does demand. In New Zealand an automated auction happens 30 minutes where generators bid in electricity at a price. The system operator then buys capacity required at any particular area at the cheapest price that is available. This sets the wholesale price of electricity.<p>This then gets distributed by the system operator throughout the country to a local lines company. They maintain the power lines to your house, but also to that person in the middle of nowhere.<p>The energy company figures out how much you&#x27;ve consumed, and bills you. Of course, when you have a problem, you call them, so there&#x27;s a call centre always available as well.<p>Finally, there are taxes and levies that the government applies.<p>After all that, if there&#x27;s anything left over between the retail price, and the sum of those costs, well, that&#x27;s the profit.<p>The weird bit is, where do you set the buyback rate for solar? The retail price? But there&#x27;s so much expenses there, not all of which are the retailer&#x27;s cost. The fair price of the market is the generating price, or wholesale price. But, there maybe political incentives to set a higher rate, as well as cap the number of people who can get that higher rate.<p>But if you want it sustainable for everybody, then using the wholesale rate makes more sense.