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Run on Sun Monthly Newsletter

In this Issue:

February, 2011

Volume: 2 Issue: 2

Pasadena Sends Out AB 920 Compensation Forms

In a mailing dated January 18, 2011, Pasadena Water & Power (PWP) sent its solar customers election forms to determine how they will be compensated for any surplus energy generated. We previously wrote about PWP's proposal and the City Council's adoption of that proposal for net surplus energy compensation. Here is our analysis of the current form and our recommendation.

As we noted previously, PWP's compensation proposal fails to fairly compensate solar power customers for the excess energy that they produce. The present form does nothing to improve on that situation, but does reveal that compensation on a monthly basis will not actually result in a check being cut unless and until the amount owed exceeds $50. This is apparently another "administrative savings" for PWP that was not discussed when their proposal was brought before the City Council.

Curiously, neither the cover letter nor the form itself discloses what the actual compensation rates will be. From our earlier post, here are the amounts:

PWP's AB 920 Compensation Rates
Energy Value REC Value Total
Annual billing 8.7¢/kWh 2.5¢/kWh 11.2¢/kWh
Monthly billing 15.3¢/kWh 2.5¢/kWh 17.8¢/kWh

While the compensation is greater under monthly billing, in neither case is the total compensation equal to the fully loaded PWP price which is closer to 19¢/kWh. Since under the monthly billing option surplus energy credits are converted to cash (even though they are not paid to the customer until they exceed $50), you actually would lose money every month. The better option is to roll your excess energy credits forward every month for the year, and that is especially true if you are only a net energy producer in some months, but a net energy consumer in others.

So here are our recommendations, box-by-box, on how to fill out PWP's form:

  1. Provide the required contact information here.
  2. Check Yes.
  3. Check the top box for "I prefer annual net metering."
  4. Check the box assigning the RECs to PWP.

At this time there does not appear to be a separate market for California residential customers for their RECs. However, that is likely to change in the future and at that point you will probably want to rescind this assignment, but for now, you may as well get the extra 2.5¢ (just don't spend it all in one place!).

It is unfortunate that surplus energy producers cannot receive full compensation for the value of the energy produced - just as it is unfortunate that we are seeing rebates disappear with no feed-in-tariff to take their place. For now, the above recommendations reflect our best advice on how to maximize your benefit under the existing rules in Pasadena.

For customers of other utilities, if you have received similar election forms we would love to hear from you.

“The better option is to roll your excess energy credits forward every month for the year...”

Help Us Spread the News!

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"Shocking" New Study About Charging EVs -
a Case of Bias and Misunderstanding

A new study out of Purdue University, and widely reported in the mainstream media (like this article in the Los Angeles Times - Electric car utility bills can shock) suggests that Californians who purchase electric vehicles or plug-in hybrid vehicles are in for a shock based on the high-cost of electricity for recharging their vehicles. The study's authors claim that because California's largest utilities (such as SCE) use a "tiered" rate structure, someone purchasing a plug-in hybrid could pay as much as 60% more in annual electricity costs than they would otherwise. For that to be economical, the cost of oil would have to rise to between $171 to $254 per barrel, the authors concluded.

Wow! Shocking indeed - if it were true. Fortunately, it is not.

First and foremost, most utilities, including SCE, already offer special rate structures for EV/PHEV owners that are "time-of-use" rates. Indeed, SCE has two specific time-of-use rates that are applicable to EV/PHEV charging and which can bring electric rates for vehicle charging down from the roughly thirty cents/kWh assumed by the authors to as low as eleven cents/kWh. These rate options include the ability to have a separate meter solely to monitor the energy used to recharge the vehicle. Since both the Nissan Leaf and the Chevy Volt allow the owner to program the start time for charging, it would seem to be pretty simple for these owners to take advantage of the cheapest electricity rates available. (Of course, if you are generating energy from solar during the day and recharging during the night, you would save even more!)

The Purdue authors claim to have developed a "model that would simulate energy use by Californians.... [that] closely aligned with actual energy use in California." So how is it that they overlooked these existing rate options, to say nothing of the solar PV-EV connection?

Maybe, just maybe, the problem lies in the lead author's true area of expertise - agricultural economics. Indeed, Professor Wallace "Wally" Tyner's primary area of research appears to be in biofuels, particularly involving that great scam, corn-based ethanol. Here's the description of his research from the Purdue website:

Professor Tyner's research interests are in the area of energy, agricultural, and natural resource policy analysis and structural and sectoral adjustment in developing economies. His work in energy economics has encompassed oil, natural gas, coal, oil shale, biomass, ethanol from agricultural sources, and solar energy. Most of his recent work has focused on economic and policy analysis for biofuels.

Why is it then, that mainstream media accounts of this very "scary" report fail to mention the bias of the lead researcher?

The actual math here, even assuming worst case factors, still tilts heavily toward the adoption of EVs. Take a Nissan Leaf that has a 24kWh battery pack and claims 100 miles per charge. Ok, we are all skeptics here, so let's assume 80 miles per charge. What is the cost per mile to drive your new Leaf? Our "skeptical" range estimate yields a range per kWh of 80 miles/24 kWh = 3.33 miles/kWh. If we assume that charging occurs in the top tier of SCE's tiered rate structure, the cost is roughly $0.30/kWh. So, at $0.30/kWh and 3.33 miles/kWh we get $0.09/mile.

What is the cost per mile for a typical American passenger car? According to the Bureau of Transportation Statistics, in 2008 (latest data available) the average US passenger car got 22.6 mpg. If we assume an average fuel price of $3.00/gallon (don't you wish), then the cost per mile for the average US passenger car today is $0.133/mile. If you are keeping score - the Leaf, even given a host of assumptions intended to favor the conventional car, is four cents/mile cheaper. For the average passenger car in the US that travels roughly 12,000 miles/year, that works out to an annual "fuel" savings of $511/year. Let the price of gasoline go up, or make electricity cheaper, and the savings are even greater. For example, if charging costs $0.12/kWh and gasoline costs $3.50/gallon, the savings shoot up to $1,425/year!

But as we already noted (but the authors ignored), there are rate options available now that make electricity cheaper. And if you offset your highest time-of-use energy usage with the energy from your own solar power system - while you charge your EV with the extremely cheap energy in the off-peak time block - you get the best of both worlds!

Solar PV and EVs are a match made in heaven - despite those "shocking" stories coming from the thinly-disguised Ethanol lobby.

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Xantrex Inverter Recall - Run on Sun Can Help

We have written before that solar power is not a Do-It-Yourself project because the voltages and currents associated with solar power systems can be dangerous if not handled properly. Indeed, the central point of most solar power systems - the inverter - typically handles thousands of Watts of power, the literal product of hundreds of volts and ten to forty amps in a typical residential installation. (Note: that is way more than enough to cause serious bodily harm or death if you cross it!)

Unfortunately, we have learned about a fairly extensive product recall regarding Xantrex inverters that have been marketed under the Xantrex, Sunpower and General Electric brands. This is a voluntary recall on the part of the manufacturer and it covers Xantrex GT series grid-tie inverters that were manufactured between September 2005 and August 2010. (The image at the left is typical of the recalled inverters.)

According to the recall notice:

A component of the inverter can degrade, causing out gassing within the wiring compartment of the inverter. Should arcing occur, gasses could build and force the compartment cover to be blown off. If the cover is blown off with sufficient force it can injure the user or person [sic], or cause damage to property in close proximity to the inverter.

Although Run on Sun has never installed or specified Xantrex inverters (preferring SMA, Enphase and KACO products), we understand that there is a fairly simple repair that a qualified technician can handle. If customers need assistance, they can contact us at Run on Sun (626-793-6025) to schedule a repair.

Click here to see the complete list of recalled Xantrex products.

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