I've actually been pondering pvp rewards for quite some time. The current system clearly isn't particularly functional, but as you point out, you obviously don't want a system where you can just 5C away all the merits in the universe.
Probably the ideal solution would have something to do with rebuys. The more expensive the rebuy, the more merits they're worth. This would have to have diminishing returns as well; dying multiple times should quickly stop providing rewards unless they also kill someone else.
Then, I'd implement some sort of bounty multiplier. IE, the higher your powerplay bounty, the more value you get for killing enemy players.
The idea being that you want highly-aggressive players to keep playing and being available to kill. This is motivated by giving them more rewards the higher their bounty becomes, but which is simultaneously punished by keeping that really high bounty available to be claimed by enemy players.
The net result is that the losing team will always have a relative advantage, as merit losses will decrease the more they die, and the potential for merit gains will increase the more they get killed.
Its certainly a more promising suggestion than simply increasing merits for Powerplay PvP, but it still reeks of an idea that would be day-1 exploited using carrier money-laundering & exploiting the extremes of the mechanics using multiple Epic accounts (for example). If you didn't get a hefty merit total for each kill, it simply wouldn't be practical for most players as those kills are hard to come by, and those increased merit totals make grinding false-flag activity even more effective. The biggest problem with it is it doesn't provide what Powerplayers have called for for so long, which is PvE mechanics, which can be disrupted by PvP. You've outlined a very simple system. Where is the evolution of tactics & strategy beyond just meeting up at hotspots & duking it out? You would pretty much need pre-arranged collusion between groups just to get a decent fight. So its really just a backdrop for arranged PvP matches. Trying to second guess what is wanted by presuming its all about PvP is the mistake here.
For one, because the player doing the sniping is in a fully combat-optimized ship, which I give 99% odds of escaping, compared to a cargo hauler, which is more like a 50-75% chance of escape. That's assuming the enemy team is even paying attention, which, given there's no overt indicator that undermining is taking place, is by no means guaranteed.
Even in a well-equipped Cutter (which for undermining is equipped for a long-stay incl. Biweave shields & often jumprange & QoL considerations that dedicated PvP ships would never compromise to.) when youre surrounded by a good farming group of 10 ships to kill, & theyre all trying to kill you, and a whale-hunting PvP wing suddenly drops on your wake, youre in big trouble, and are not getting out of there at all if you dont recognise the full danger immediately. Thats at least an equal risk to a sanely outfitted cargo hauler.
If the underminers are taking increased risks, by holding onto merits which can then be lost on ship destruction, then yes there is no overt indicator from Galmap or the Power status screens. Complacency is its own risk, and Powers do snipe-checks routinely by checking the in-system boards that show the merit total of ships destroyed that are yet to be handed in. This is effective when done properly, as the playergroup collates their info so the strategists get a good overall picture. Its not something an individual player can really do all the time on their own, but group & team play is overtly what Powerplay is about, it's clearly not
for the individual CMDR, besides that module bait (which would be much better off unlocked in another way that doesn't timegate the items)
As for why people don't want to play in Open, it's got little to do with practical statistics and much more to do with emotions. It doesn't feel good to be in constant stress watching for an enemy. The actual chances of getting bothered in Open are very small, so any rewards for playing in open would have to be equally small, to the point where it wouldn't really make a difference.
it doesn't feel good to be in constant stress watching for an enemy Indeed, it takes more focus, attention, energy & defensive considerations that significantly compromise min-maxing. You cant grind it out in Open to the same extent you can in safe & predictable solo/PG modes, even when the direct opposition doesn't appear. When in a hot war, the chances of getting through can be slim, & I've been parked up for days in nearby systems waiting for a window of top cover because I'm not a particularly ninja-like at dancing my way through well organised blockades with loads of angled mini-jumps & drops using gravity wells to advantage and all that stuff.
I'm very well aware of the differences, and the different motivations for players in the different modes. I spent a year playing exclusively in Solo when I first started, as id decided ED was going to be my little solo experience where I didn't need to worry or take any consideration of 'META' or other players activities at all, & take progress at whatever pace I liked, as what anybody else thought: didn't matter. I exhausted my initial goals & on joining my first Power, was coaxed into Open & soon after fledging (as I later came to view it) found us embroiled in a conflict that showed what a different & far more engaging & rewarding experience it could be played that way. Some of the best multiplayer id ever known, & id played in clans & LANs for a long time at a competitive level of CS, UT2K4, CSS, CS:GO, the Battlefields, COD and including RL sports & games in that list as well.
I've now been pledged to that Power for 210 weeks, & still think its worth slogging it out on these forums to support changes that enable that kind of gameplay in an evolving & not a sporadic way, so that it doesn't collapse into recriminations & grind when one side vanishes from the battlefield, and subsequently turns around a previously precarious position. It shouldn't have to rely on good sportsmanship to keep the gameplay alive. And the teamplay and rolling conflicts are so nearly awesome, I really don't want to fundamentally change it too much, but just let it have a chance to live, as intact as possible.
And fundamentally, that means not giving a supposedly legitimate Solo/PG opt-out available to tempt anyone to succumb to whenever the going gets tough.
If activities really cant be split between modes as befits them, as Rubbernuke suggests, then at least we should have a effective merit bonus for doing it all in Open. Not even personal merits, if you haul 750t you get 750 merits, they may as well all remain the same, its the effect on the Power that needs the incentive, so that to do the best you can for your side, its not so obviously a dumb idea to stay in Open. Cuz that's what really kills it.