Category: "Net Metering"

06/29/20

  07:47:00 am, by Jim Jenal - Founder & CEO   , 404 words  
Categories: Residential Solar, Net Metering

Update on Net Metering Attack at the FERC

Back in April we wrote about an attempt to eliminate Net Energy Metering - the primary economic benefit for rooftop solar - by way of a misleading petition filed with the Federal Energy Regulatory Commission (FERC). Here’s an update (h/t Utility Dive)…

The petition was filed by an entity called the New England Ratepayers Association (NERA) and if successful, would potentially affect net metering in the 45 states where it presently exists in one form or another.  The FERC regulates interstate electricity markets, and NERA portrayed net metering as a “wholesale sale” of energy, essentially subjecting rooftop solar systems as if they were utility power plants.  From NERA’s FAQ about the petition:

[N]et metering is having an unfair and harmful impact on ratepayers, especially low-and middle-income families. Given this problem, NERA has chosen to challenge net metering at the body which has the proper jurisdiction over wholesale electricity transactions.

Under FERC rules, the public had until June 15 to comment on the petition, and NERA found support from some usual suspects including the Heartland Institute (famous for its climate change denialism), the coal company Murray Energy (hilariously ridiculed by John Oliver a few years ago), the Competitive Enterprise Institute, Americans for Tax Reform (say what?), and Citizens Against Government Waste. 

Curiously, although several utility companies - including PG&E - had suggested that they would comment, none of them did.

In opposition was a very long and bipartisan group of people ranging from solar companies (well duh) and solar trade associations, to local state energy regulators.  For example, the National Association of Regulatory Utilities Commissioners (which includes the California Public Utilities Commission amongst its members) said in its comments:

The [FERC]… has for nearly 20 years acknowledged states’ authority and held that net metering does not involve wholesale sales subject to its jurisdiction… Relying on that settled law, states and utilities have developed and implemented net metering programs, and millions of Americans have made long-term investments in solar panels and other distributed generation for their homes and businesses.

Exactly!

Interestingly, Public Citizen dug up some IRS filings for NERA - which self-describes as "a non-profit organization focused on promoting sound public policy that protects utility customers, both families and businesses, and lowers the cost of regulated services” - that cast doubt on that claim.  According to the IRS filings, NERA consists of 15 members (identities not disclosed), ten of whom pay $20,000 in annual dues and five that pay $5,000.  Not exactly a grassroots organization!

Watch this space!

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02/27/18

  02:14:00 pm, by Jim Jenal - Founder & CEO   , 347 words  
Categories: All About Solar Power, SCE, Residential Solar, Net Metering

Beware SCE's Attempt to Switch Solar Customers to TOU Rates!

 

Attention SCE customers who installed solar before the NEM 2.0 deadline (that is, you installed solar before July 1, 2017) - we just learned that SCE is sending around notices suggesting that you switch over to a Time-of-Use rate. You do not need to make that switch, and you most likely don’t want to!
Here are the facts…

SCE customers who installed solar systems prior to the transition to Net Energy Metering 2.0 rules ("NEM 1.0 Customers") are grandfathered into their existing tiered rate structures for 20 years following their go-live date.  While the costs under that rate structure may change, the basic design - a tiered rate where you pay more the more you use, versus a time-of-use rate where what you pay is tied to when you use it - is locked in.  For most solar system owners, that is a better deal.

But we just learned that SCE is trying to convince NEM 1.0 Customers to switch to TOU rates.  (You can find their oh-so encouraging web page for the transition here.)  For the vast majority of solar system owners, such a transition is NOT IN YOUR BEST INTEREST!  The TOU rates have their highest charges either from 4-9 or 5-8, and their lowest charges between 8 a.m. and 4 or 5 p.m.  That means that any energy exported back to the grid will be compensated at the lowest rate (unless your system happens to be exporting after 4 or 5 in the evening, not very likely), whereas energy you need to use in the evening will cost you the most!  

Check out these numbers:

SCE's 4-9 p.m. TOU rate      SCE's 5-8 p.m. TOU rate
SCE’s 4-9 p.m. Time-of-Use Summer Rates   SCE’s 5-8 p.m. Time-of-Use Summer Rates

Yikes!  That’s a whopping 49¢/kWh if you select the 5-8 p.m. rate - but you will only earn 23¢/kWh for energy that you export from your solar system!  Not a good deal at all!

The good news is you don’t have to make this switch!  And if you mistakenly were convinced to switch, you have the right to switch back.  (Similar scams are underway in PG&E and SDG&E territory as well.)  If you have questions, give us a call and we will help you to sort this out.

07/18/17

  10:17:00 am, by Jim Jenal - Founder & CEO   , 459 words  
Categories: All About Solar Power, SCE, Residential Solar, Net Metering

NEM 2.0 is Here - Now What?

Net Energy Metering 2.0, or NEM 2.0 for short, is now the law of the land, at least in SCE territory.  So what does that really mean for potential solar clients?  Here’s the scoop…

NEM 2.0 brings three changes to how new solar clients will be treated by SCE (customers of PWP, LADWP, or any other muni utility are unaffected).  Let’s take a quick run through each one:

  • A one-time application fee - new solar clients will be charged $75 as part of the interconnection application process.  (In the past there was no charge.)  Not a big deal, just another annoyance from SCE.
  • Switch to Time of Use rates - this is a much bigger deal.  Most residential customers are on a two-tiered rate structure with a “penalty” tier for users who exceed 4x baseline allocation.  Under that rate structure the maximum cost for energy is 31.224¢/kWh.
    Going forward, new solar customers will be charged based on when they use energy, not how much energy they use, with a Summer, on-peak energy cost of 44.665¢/kWh!  Ouch!  Peak hours are weekdays (holidays excepted) from 2-8 p.m.
  • Non-Bypassable Charges - Under the old rules, energy that was imported from the grid could be entirely offset by energy exported onto the grid.  Now, for every kilowatt hour imported, regardless of exports, the customer will pay a small (for now) non-bypassable charge of 2.25¢/kWh.  Again, the utilities were pressing for this to be a much higher number, but for now this is a relatively minor surcharge.

So what does this all mean?  The answer is, it varies.  For some clients, particularly those with west-facing roofs, they may actually do better under TOU rates than they would have staying on the old, tiered rate plan.  But to answer that question requires a proper analysis, and this is where potential solar clients need to do their homework and look closely at their solar bids. 

EnergyToolbase screenshot

Here’s what to look for.  Your potential installer should be requesting that you provide them with SCE’s “interval data” for your home.  This hour-by-hour data for the entire year allows for a proper analysis of your usage, and makes it possible to compare that historical usage with the modeled output of your proposed PV system.  If they aren’t asking for interval data, they are taking shortcuts with their savings analysis - likely in ways that inflate your potential savings on paper, only to result in disappointment down the road.

Run on Sun uses UtilityAPI to access SCE data securely, and we employ EnergyToolbase (pictured above) to do our analysis of your potential savings - two of the most highly respected and sophisticated tools in the solar industry.  We have the tools and the expertise to give you the most accurate projection of your future savings from solar - so let’s get started!

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05/04/17

  05:11:00 pm, by Jim Jenal - Founder & CEO   , 497 words  
Categories: All About Solar Power, Solar Economics, SCE, Residential Solar, Ranting, Net Metering

NEM 2.0 is Coming - But Not Before July 1

As a solar installer working in SCE’s territory, we get messages from them on a regular basis, including those regarding the upcoming transition to NEM 2.0.  But the email we received today (actually two copies of it!) was a bit, how shall we say, high-strung?  Here’s our take.

NEM 2.0 will occur when the first of two events occurs: SCE interconnects enough residential and commercial solar projects to reach 5.0% of its total aggregate power demand, or July 1.  We have written before that SCE will never get to the 5% beforehand, so the deadline is 23:59:59 on June 30. 

So we were a tad perplexed to see this email today - here’s a sample:

417 MWs Remaining in NEM 1.0

As SCE gets closer to its Net Energy Metering (NEM) 1.0 Cap, we want to remind everyone of the importance of submitting complete and accurate interconnection request(s) (IRs). You should be receiving similar notifications within the online application system (i.e., PowerClerk).

Why is the 417 MWs remaining important?

For those applicants and customers with an existing IR moving through the interconnection process, we are sharing this information so that you may plan accordingly as SCE approaches its NEM 1.0 Cap. Once the cap is reached, the existing NEM tariff will close to new customers and the NEM 2.0 (NEM Successor) tariff will become available. With approximately 417 MWs remaining in the NEM 1.0 cap, this is a friendly reminder to please submit all documentation necessary for receiving service under NEM 1.0 and do so as soon as possible.

(Emphasis in the original.)

Wow - you would think that this might happen any day now, based on that language.  Except that it won’t - not even close.

Here are the underlying numbers:  SCE’s total cap is 2,240 MWs - a target it has been building toward since 2007!  As of today, in SCE’s territory, 1,823 MWs has been installed.  That means it has taken roughly  3,595 days to install that capacity, which works out to roughly half a Megawatt per day.  With 417 MWs left under the cap, and just under 58 days before July 1, we would have to be installing at the rate of 7.2 MWs/day!  Uh, no.  Just Not Going To Happen!

(If you would like to see exactly how much time we have before we hit the actual deadline, check out the Doomsday Clock on our Residential Solar page.)

However, the reality of that deadline does have consequences.  For potential commercial clients, sorry, but you are out of luck - there is just not enough time to get a new commercial project designed, permitted, constructed, and approved before July 1.

Potential residential clients are in a slightly better position, but only slightly as your window of opportunity is rapidly closing.  For example, we are already booked solid for the entire month of May with just SCE projects (we have pushed everyone else back to try and help as many as possible in SCE territory meet the deadline), and we can only guarantee an approved interconnection for NEM 1.0 by mid-June.  If you’ve been thinking about solar in SCE-land, please don’t wait, call or email us today!

02/20/17

  11:30:00 am, by Jim Jenal - Founder & CEO   , 814 words  
Categories: Solar Economics, Residential Solar, Net Metering

Update: Net Metering 2.0 Coming Soon!

We have written at some length about how Net Energy Metering (NEM) works, and about the changes to NEM that are coming, aka Net Energy Metering 2.0.  While both PG&E and SDG&E have already switched to the 2.0 version, SCE customers are still able to go solar under the existing, more favorable, rules, but not for long!  (NB: PWP & LADWP customers are unaffected by this change, the following is only relevant to SCE customers.)

Here is our update as we dive headlong into the brave new world of NEM 2.0.

Timing of the change

Under the rules adopted by the California Public Utilities Commission (CPUC), SCE must continue to allow new customers to operate under the current NEM 1.0 rules, until either of the following events occur:

  1. SCE reaches its NEM 1.0 cap of 5% of net aggregate demand, or
  2. We reach the deadline date of July 1, 2017.

As of this writing, SCE is still a full percentage point below its cap, with 480 MW worth of solar to install before the cap is reached.  Quite simply, that will not happen between now and the end of June, so the deadline to get in on the current rules is 11:59 p.m. on June 30, 2017.

But here is the rub—to qualify, not only must the project have been completed, but a final, signed-off inspection card must also be submitted to SCE prior to the deadline.  This is going to make June a difficult month as installers struggle to get projects completed and approved in time.  Since approvals are at the whim of individual inspectors, many of whom are idiosyncratic (to be kind) in their understanding of what the code requires, it is difficult to guarantee that a project will be approved on first inspection. 
Prudent consumers will want to make sure that first inspection occurs on or before June 15th.

Key differences

Although NEM 2.0 is not the crushing blow to solar that some feared it might become, it still has a number of aspects that make it less appealing to the solar system owner.  Here are the major differences:

  1. New Interconnection Fee—Presently, it doesn’t cost anything to connect to SCE’s grid.  NEM 2.0 changes that, and imposes a one-time charge of $75.
  2. Imposition of Nonbypassable Charges (NBCs)—under existing rules, if the credits generated by exporting power to the grid equal or exceed the charges incurred for energy imported, the energy charges are zeroed out (or even a credit is carried forward, if exports exceeded imports).  Under NEM 2.0, for every kWh imported from the grid, whether it can be netted out or not, there are NBCs charged for that energy.  The good news is that this is just about 2.2¢/kWh, and it does not apply to solar energy consumed locally, but it does still decrease the savings from solar.
  3. Mandatory Time-of-Use (TOU) Rates—Presently, residential customers who are on an SCE tiered rate before adding solar remain on that rate after interconnection.  NEM 2.0 changes that as well, and forces new solar customers to shift to a TOU rate.  SCE’s TOU rate charges the most for energy consumed from 2:00 to 8:00 p.m., meaning that energy exported to the grid  before 2:00 (as many solar systems do) is less valuable to the consumer than the energy they have to import from the grid in the evening after the solar system is no longer producing.

(Unintended?) Consequences of NEM 2.0

The coming of NEM 2.0 has some obvious consequences—there will be a crush this spring to get projects approved before the new rules take effect (so don’t wait!), and the overall savings from going solar will be reduced, although not dramatically so.

Enphase AC BatteryBut there are some unintended consequences as well.  For one, these new rules will be a boon for intelligent storage systems, both to help reduce NBCs and to shift that otherwise exported energy to peak TOU periods.  Storage systems with the “smarts” to do all that will suddenly make economic sense.  (More on that in the near future, but for now just three little words: Enphase AC Battery!)

Another unintended consequence is the significantly increased difficulty in properly modeling the savings to be derived from adding solar.  While some installation companies use sophisticated software like EnergyToolbase (as Run on Sun does), or build out sufficiently detailed spreadsheet models (as Run on Sun also does), for many, that level of complexity is simply overwhelming.  So what will they do?  More than likely, just create a number that is little more than a WAG (and no, not a SWAG).

The result is that potential solar clients need to push on companies providing them with solar quotes to justify their savings numbers.  If they used something like EnergyToolbase they should be happy to point that out (although there is still the risk that they used it incorrectly…).  If they used their own proprietary model, they should be able to explain how it works.  But be wary of numbers, especially outliers that claim greater savings without sufficient documentation.

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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