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Notice to California Solar-Power Owners about AB-327...

Well, it looks like if you own a solar-power-system (like myself), we will soon be at the mercy of California Public Utility Commission to decide our fate.

Assembly Bill AB 327 could have a negative effect on solar-power customers, and increase rates for those of us trying to reduce greenhouse gasses, save energy, and help provide power for the weakened and overburdened California power grid. Unfortunately, no one is really sure how it will effect current solar-power customers at this point, as rates are not part of the bill's language. However, it appears if you currently are getting a rebate via net-metering, you will now have to at least pay a per month fee to help maintain the grid. Otherwise, the primary purpose of the bill sounds very much like another 'Nanny-State' law that forces those who choose to use less energy, to subsidize those who waste a LOT!
It will furthermore help subsidize residents and businesses who 'chose' to live further away from the coast and waste energy, (and who paid far less for their homes and businesses), by inturn charging higher rates for those who paid FAR MORE to live near the coast, and conserve energy. Thus, if there was any reason left in this state to conserve, be wise, work hard, and be conscientious about our planet/environment, it looks like there isn't anymore. ;-(

Governor Brown hasn't signed the bill yet, however, the chances look slim that he won't.

@BVS:

That is what we did with SolarCity--we sized out PV to cove everything over Tier 1 usage. I am not sure what other companies do, but SC will look at your last 24 months of usage and then model a system based on that.

@TikiMan:

Based on the SFgate news story above, they addressed you concern so those who use more pay more.

O

I completely agree the "indexing" aspect of the bill seems nuts.
We've had our MS since March and it consumes about 40% of our gross KwH. So simply by driving more or less we could put ourselves into either camp! We already do a little of this - towards the end of the billing period if we've had lots of fog (and thus reduced generation) we'll put more miles on the ICE cars to keep us in the lower tier. Then when the billing month rolls over we go back to normal.

I would still argue that if you size your solar to something that keeps you in the middle of the Tier 1 KwH "block" your risk is fairly low, simply because any under over would be at <$.10/KwH.

@omarsultan: how did SC estimate your MS consumption? Planned miles driven? Or did you already have the car?

@BVS We got the SC install pre-Tesla. Apparently I can get the system upgraded to cover the Tesla and I will eventually explore that, but for now, I am getting charging at a ToU rate of $0.06/kWh (dedicated EVSE meter). With the HPWC, getting a full charge on my S85 in the ToU window is not a problem, so its not an urgent priority for me right now.

O

Tiki, I'm not following how this new bill penalizes those who conserve over the high consumers, other than potentially adding a fixed charge to everyone's bill. The varying rates by climate zone have been in place a long time.

Can you clarify what part you think if unfair? Thanks...

Solar peak is 10am to 2pm.

Demand peak is 6pm to 9pm.

Do you see the problem with why solar needs to be managed better than simply Net billed? They should pay the wholesale rate during mid day periods which are a daily, sliding scale bases on demand. Higher demand, higher wholesale hourly rate. Net metering via smart meters could or perhaps should eventually treat every generator roughly the same. Seems fair long term.

bonaire

TOU peak for SCE is 10am-6pm, the same peak time for solar. I think you are quoting the peak time for PG&E. The difference is likely due to much higher AC use in SoCal and maybe more ??industry??

I agree with you about the wholesale prices.

Joe,

http://www.csmonitor.com/Environment/2013/0911/Why-running-the-AC-in-Cal...

"...With the State Legislature’s bill AB 327 – which appears headed for passage and the signature of Gov. Jerry Brown – energy rates for those in hotter locales, who consume more power to run air conditioning, will be lowered to where they are more even with rates by the breezy seacoast, where the need for fans and air conditioners is less..."
_____________________________________________________________________________
Why should those of us who paid FAR more for our tiny homes near the coast (and conserve power), subsidize those who paid pennies on the dollar for their inland palaces (many of which have masive swimming-pools, two to three central A/C units running 24/7, lighted tennis courts, etc)? They pay more on electrical power, because they saved hundreds of thousands on their desert masions!

The 'Tier Rate' system works, because it balances out those who choose to waste, over those who choose to conserve.

@Tikiman:

I am surprised they make brushes that big--have you ever visited the Central Valley? If you pick a town like Modesto, the median house is 1,800 sq ft, median household income is ~$42K and the average high is July is 95F.

O

The model S comes with a timer for charging. Most people charge their cars off peak as they are at work by day:). This helps the power companies as their solar panels are generating peak power and they are using super off peak power helping keep the voltage down.PG&E is doing the right thing by reimbursing you at peak rates.
@mdemetri if I am not mistaken peak for SCE is 12-6pm on tou

@RanjitC

The peak time for the TOU-D-TEV (house + car) plan is 10am-6pm. This is my plan.

The peak time for the TOU-EV-1 (dedicated meter for car) plan is 12pm-9pm.

Not sure why they are different.

Tiki

I totally love your Model S posts. And your Carbon Fiber nose cone treatment is very creative and an inspiration.

But I think AB-327 is a good outline for the future direction of NetMetering in California, although the devil will be in the details as the PUC drafts the actual new rates and NEM plans. So let's just say that we apparently have totally different perspectives on the net metering policies and leave it at that.

The discussion here seems WAY off kilter with what is actually being proposed. Has anyone RTFA? A flat $10/mo fee for ALL customers (not just solar) certainly sucks, but it's not unfairly targeting solar owners or anything like that. And if you DO have solar, what you save from your system should more than offset the new fee. If I were actually a net-producer with my solar (but I'm not), it only seems fair to pay some fee for the benefit of using the grid as if it were a giant "battery storage system". If you really don't like it, install your own battery backup system and go completely off-grid. Good luck!

GeekEV

Will other energy suppliers to the grid also be paying a fee to supply the grid with electrons? Seems non-sensical to me.

However, the more important point is that residential solar generators are already paying 'some fee for the benefit of using the grid as if it were a giant "battery storage system"; at least in Southern California. We are providing excess electricity during peak time to the benefit of the energy companies; this is a huge financial benefit to SCE as it provides them with cheap electrons during peak time/cost. Otherwise they would have to buy them on the wholesale market, where costs are high during peak time (especially with the San Onofre Nuclear plant off-line due to their own incompetence). They then give me the electrons back at off peak times when the cost to them is the lowest. This difference in cost accrues to SCE and therefore is already a major subsidy that residential solar generators provide for use of the grid. Note that this benefits SCE even if the residential solar owner is not net positive as most generate more electrons during peak time than they use in that time period.

I don't need net metering; just pay me market wholesale rates during the day when I am supplying the grid and charge me retail rates when I use electrons at off-peak times.

mdemetri

Currently you get full retail credit for the power you push back in to the grid. You can't get a better deal than that, it's hugely in your favor.

I'm not clear whether you're on a ToU rate or not, but in most parts of California that's certainly an option. In that case you get paid the much HIGHER on peak rate when you generate and pay the much lower off peak rate for what you use in the evening. Again a major win for the solar customer.

And you get that higher on peak ToU rate credit for all of the excess energy you create during the whole year (modulo summer/winter variance) whereas the utility only needs to go out for the really expensive power on the 6 or so Critical Peak Pricing days each year.

Trust me that you're already getting a great deal as a subsidized incentive to install solar. This new bill is an attempt to set guidelines and priorities to update the Net Energy Metering program so that it can rationally be extended to many more customers as solar becomes even more cost effective and main stream.

Frankly the old program was a VERY generous way to help the adoption of solar but it just wasn't scalable. Imagine a world where EVERY customer was as smart as you and installed solar sufficient to drive their costs to zero. Who do you think should pay to keep your lights on at night?

There are sooooo many misinterpretations of the facts here. This is an important issue.

There are quite a few of you that should recheck your statements and assuming them factual. Opinions are also not facts.

Important distinctions:
- credit = the actual electricity generated that is more than your consumption, based on the rate when it is generated
- payment = amount SCE pays for overproduction after reconciled for the year. This is based on wholesale prices, currently $0.035 / KWH, that's 3.5 cents.

SCE ONLY PAYS ACTUAL DOLLARS BASED ON WHOLESALE PRICES.

One of the contentions of this bill is that the PUC may determine the rate when generating credits. If the credits are calculated based on WHOLESLE PRICES of 3.5 cents per KWH, this will END the ROI as we know it. Instead of 6.5 years for my system to pay for itself, it will take over 20 years. This has the potential to kill the financial benefits of rooftop solar and flip the industry on its lid.

That is a huge problem

Be careful when using the terms "pay" and "credit" as these are not interchangeable when discussing net metering and solar.

Happy arguing everyone

bt77057 +1

It is critical to understand that the wholesale rate that SCE 'pays' for excess annual electricity is the lowest off peak rate, not the highest rate during peak time when solar is generating. They are pocketing the difference and in this way, we are already substantially subsidizing the grid.

IMO, net metering and excess electricity should be 'payed' at the wholesale rate based on time of day. Currently, TOU is completely ignored at the time of annual reconciliation and excess is payed at the lowest possible wholesale rate.

Mdemetri, I'm not sure that annual payouts are paid with any regard to off peak rates, they are simply paid at wholesale rates. This is my understanding, I could be wrong, but are you absolutely sure about your statement?

I realize many of you think this is awful, but you have to think from the point of view of the utility. You are still getting a pretty nice deal with net metering. If your solar is matched well, say exactly what your load is, you effectively have no bill and the utility is paying you full retail price for what you produced to offsett your bill to 0. You used 300kwh at .15/kwh, but you produced 300kwh and your bill is offsett at .15/kwh = 0 owed for example. Now if you have oversized your solar you should obviously be actually payed income for that so now you are basically your own tiny utility company. BUT, you own no transmission assets whatsovever...so how do you sell it, and who do you sell it to? you don't employ any energy marketers either... Well right now you are using the utility's resources for that. And they basically take that into account somewhat when deciding how much to pay you for your power. You are selling it to them, but they are taking out their cost portions of it first. Which is perfectly fair. Therefore you get paid only 3.5 cents/kwh for your excess. The other thing the utility does for you is to make sure the capacity is still there to serve you if you solar goes out. That is wasted capacity of the utility's resources they can't use to sell power, and that costs money too.

Could this system be better, sure. You could be a real time part of the energy market in which high peak times you could sell for more $/kwh and such, but they equipment, manpower does not exist to do this. The way they are doing it now is much simpler and cheaper to implement across the system. The grid would need a lot of additional equipment, communications equipment, and more manpower to maintain and run it all in order to get a real-time pricing model to work for each individual residential customer. Maybe someday, who knows, but right now that is one heck of a lot of cost to implement, and isn't benificial enough to do so.

Hopefully this helps you to understand where the utility is coming from. You may not like it, but it really is pretty fair to you.

bt77057

Yes, one does need to be careful and understand the details. There are actually three timescales to consider for Net Metering:

- Realtime Net kWh (Often aggregated to a 15 minute reporting interval)
- Monthly Net $
- Yearly Net kWh

In the US, and certainly in California, it is typical to have a single electric meter that measures your realtime net energy consumption. So in this way your solar production immediately and inherently offsets an equivalent amount of your concurrent consumption. So in this setup your electric meter is recording your NET energy usage, and you are effectively getting full retail credit for any and all production that offsets concurrent consumption.

Not all parts of the world have such generous net metering programs. Some localities use a separate meter to measure your solar production completely separately from your consumption meter. In these cases you get paid a wholesale rate for all of your generation but you pay the retail rate for ALL of your consumption. None of the consumption is offset at retail rates by your concurrent solar production.

So in the US using a single net meter ensures your solar production offsets any realtime concurrent consumption, and thus you're effectively credited (aka not billed) at the FULL RETAIL rate for that production. So the California NEM program is a big win in the realtime case. (mdemetri: Be careful about your wish to get credited at wholesale for your production but pay retail for your consumption, because that may not be what you really had in mind)

Secondly your monthly bill is tallied up on a DOLLAR basis, using retail rates for both consumption and production, and credits/charges are carried forward for the yearly true up period. You're getting credit at the full retail rate for excess energy you generate. Why?

Who would ever expect to take an item into a store that wasn't purchased there and assume they'd get a store credit for the full retail value of that item, and especially who would think that they should get that unbelievablely good deal for an unlimited number of returned items?

Macys, My brother Vinney can make sweaters just like the one I see on your rack there. I plan to drop his sweaters off whenever it's convenient for me (summer and winter) and I expect Macys to keep track of the sweaters year round and once a year pay me the full retail value for all of Vinney's sweaters. Huh???

But wouldn't you be amazed and pleasantly surprised if Macy's said, well since you're such a good customer we'll buy Vinney's sweaters from you at full retail price but only up to the amount of your normal yearly purchases from Macy's. But we'll give you a nominal amount even for the extra sweaters you've dropped off. Please plan accordingly and try not to drop off any more sweaters than it will take to offset your normal yearly bill. Can you think of ANY merchant who would even entertain such a sweet deal for the consumer?

Well that's exactly what Net Metering is asking of the utilities.

Getting full retail credit for ANY of your realtime net production is a huge gift. Logically you should be getting paid the wholesale rate for the energy (for similarly characterized intermittent, non-dispatchable energy). And instead of getting a credit for the distribution charge included in the retail rate you should logically be charged a FEE for use of the transformer and distribution system that you need to take your excess energy to market. Commercial customers pay Demand charges for their peak power flows irrespective of their energy use. The concept applies here too.

In California, NEM DOES...

- give you FULL retail credit for ALL solar production that offsets concurrent consumption, an unlimited amount.

- give you FULL retail and full ToU! DOLLAR credit to offset the dollars you owe for any of your excess consumption. This is a strong advantage to solar because you accumulate credits at the higher OnPeak ToU rates to pay for consumption during off-peak periods. (mdemetri: You can even offset your full yearly bill by producing fewer kWh than you consume. You ARE getting the higher ToU dollar credit for the time value of the energy you produce.)

- pay you a nominal (low) rate for excess energy you generate beyond what it takes to offset your yearly bill.

Finally, here's what VoteSolar (a solar advocacy group) has to say about AB-327:

"AB 327 (Perea) is a net metering and rate reform bill that clears the way for hundreds of thousands of homes, schools and businesses to go solar and lower their electricity bills. AB 327 ensures that one of California’s most important solar consumer rights, net metering, will stay in place until at least 2016 instead of being suspended as soon as next year. It also gives the California Public Utilities Commission authority to remove caps on participation in the program altogether for the first time in California history, charting the way forward toward long-term solar industry sustainability. All in all it’s a big win for solar; however, the bill does leave a few big unanswered questions that will need to be addressed by the Commission."


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