Tag: "nem"

05/12/20

  06:41:00 am, by Jim Jenal - Founder & CEO   , 949 words  
Categories: All About Solar Power, Residential Solar, Energy Storage

New Rule in SCE Territory Makes Solar + Storage More Valuable

We just learned from our friends at Energy Toolbase that Southern California Edison has just changed a rule about how solar PV systems with Energy Storage can operate, and the result - amazingly enough - results in greater savings for our clients!  Imagine that?!?  Here’s our take…

It used to be in SCE territory that when you added a storage system to your PV array, you could not export energy from the storage system to the grid and receive net metering credit.  That meant that when the storage system was discharging, it could not exceed what the home’s loads were demanding.  If your usage in the evening was low, or say you were out of town, your fully charged battery could not discharge at all - a poor utilization of that expensive storage system.

But now SCE - along with the other IOU’s, PG&E and SDG&E - have changed their rules to allow storage systems to discharge back to the grid and receive full net metering credit for that energy, as long as the storage system is solely charged by the PV array.  When you combine that rule change with electricity rates that favor storage, such as SCE’s TOU-D-Prime rate, the change in the rule can account for significant savings.

To get a handle on how big a change this will be, we went back to the data that we have for a client who we will be installing a small PV array and a 10 kWh Ensemble storage system soon.  (All of our data analysis and visualizations you see here were done using Energy Toolbase, simply the best presentation tool on the market.)

Solar PV & Storage - No Net Metering Discharge

Our client with the small, 4.6 kW, PV system and 10 kWh Ensemble storage system has a system payback of 11.4 years.  (Larger systems would have a faster payback.)  For this analysis, we imported his SCE interval usage data (provided by UtilityAPI) into Energy Toolbase.  ET then takes the performance output from the PV system, the charge and discharge parameters of the storage system, and overlays that on the existing usage - doing that calculation over every fifteen minute interval for a year.

The graph below shows one day, July 8th, as a representative sample.  Let’s break this down:

Solar PV + Storage - no net metering discharge

There’s a lot going on in this image (click on it for a larger version).  The dark gray is the historical usage demand based on the SCE data.  The value is shown at the top as “Current Demand” and at the moment we have focused on - July 8 at 4:15 p.m. - the historical demand was 1.94 kW. 

The green curve shows the modeled PV array output, using the specific parameters for this site - azimuth, tilt, shading, historical weather, specific equipment being used - as determined by NREL’s PVWatts tool (version 5).  Right now it is at 1.17 kW. 

The red line shows the percentage state of charge for the storage system, at this moment it is 83%.  Net Demand is what is being imported (positive number) or exported (negative number) to the grid.  Finally, Battery Power is how much power is being pulled from the storage system which at this moment is 1.94 kW.  At the bottom is the cost parameters for this rate schedule.  Under the pre-solar Domestic rate (which is a tiered rate) the cost of energy is 18.7 cents/kWh, whereas under the new rate structure it is more than twice that at 38.3 cents during the peak, 4-9 p.m. period.

 So… earlier in the day, as the output from the PV increases, and energy charges are cheap, the solar charges the battery for use later when the rates are high. As we cross over into the peak rate period at 4:00, the storage system begins to discharge and its output is exactly the same as the demand, meaning that all of the power from the PV system can be exported to the grid. 

But note that the battery power is only 1.94 kW, even though its continuous peak output is roughly twice that, 3.84 kW.  Under the old rules though, the storage system cannot output more than that, since it is barred from exporting to the grid.  As a result, when the peak rate period ends at 9:00 p.m. the storage system shuts off, even though it is still partially charged (nearly 40% capacity remains in this example).

That’s leaving money on the table!

Solar PV & Storage - Net Metering Discharge Allowed

Consider the same day, only now we can export the full output of the storage system as desired to maximize our time-of-use arbitrage.

Solar PV + Storage - no net metering discharge

Everything is essentially the same until we get to 4:00 p.m. and then things get very different!  Look at the difference in the output from the battery system, it is now putting out it’s maximum sustained power of 3.84 kW, resulting in more than 3 kW being exported during the peak price period

More importantly from an arbitrage perspective, the storage system is completely cycled.  Meaning that we have gotten full utilization from our storage system investment.  

What does that mean overall economically?  Payback is reduced from 11.4 to 10.7 years, a 6.1% improvement.  Gee, thanks, SCE!

So why are they doing this?  Simple: grid support. Having storage systems maximizing their output during the peak demand period (remember the Duck Curve?) helps the utility to manage its load, and reduce the need for expensive peaker capacity. Everybody benefits: our client (with faster payback), the utility (with better grid load management), and even non-solar/storage rate payers (as they don’t have to pay for that additional production capacity.  Win, win, win!

Of course, these economic benefits don’t really apply to a tiered rate structure, such as is used for residential rates in PWP territory.  But if you are in SCE territory, adding smart storage, like the Enphase Ensemble system, just became a lot more lucrative.

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04/23/20

  06:41:00 am, by Jim Jenal - Founder & CEO   , 725 words  
Categories: All About Solar Power, Solar Economics, Commercial Solar, Residential Solar, Ranting, Non-profit solar

While You Were Sleeping: Will FERC Preempt States' Ability to Regulate Solar?

For the most part, the regulation of the solar industry - particularly the residential and commercial solar industry - is a function of state regulators.  In California, both the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) have been the major players in shaping the policies that govern solar installations, including policies like Net Energy Metering (NEM) which determines the economic value of going solar.  But now, a petition from the other side of the country could change all of that, and force states to turn control over the solar industry to federal regulators.  Here’s our take…

FERC logo

The Federal Energy Regulatory Commission (FERC) is ”an independent agency that regulates the interstate transmission of electricity, natural gas, and oil.” Well, wait a second, what does rooftop solar have to do with the “interstate transmission of electricity"?  At first blush, certainly nothing - the excess power from your home solar might go to power your neighbor’s house, but it certainly isn’t crossing state lines. (As a recovering lawyer I could go into a lengthy discussion of the Constitution’s Commerce clause and how that has been broadly interpreted to cover an amazing array of things that seem local, but are actually interstate commerce - but I will spare you that discussion!)  

The hook here is in the greater detail of what the FERC does: “Regulates the transmission and wholesale sales of electricity in interstate commerce."  Under NEM rules, excess energy put out onto the utility’s grid by a “behind-the-meter” solar system, i.e., all grid-tied residential and commercial PV systems,  is then resold by the utility to its other customers.  A petition to the FERC filed by the New England Ratepayers Association is asking FERC to find that those sales are under the exclusive jurisdiction of the FERC.  From the petition:

The law is incontrovertible. The [Federal Power Act] draws a bright line between state and federal jurisdiction over energy sales. Sales of energy at wholesale are subject to the exclusive jurisdiction of this Commission. Sales of energy at retail are subject to the jurisdiction of the states. The sales at issue in this Petition are wholesale sales because the energy is being sold to the utility for resale to the utility’s retail load…  and therefore the Commission is required to exercise its rate jurisdiction over them. [Emphasis added.]

Wow!  Now that is interesting - energy exported to the grid, for which the PV owner is paid retail rates (or closer there to), and which the customer down the wire pays full retail rates, is somehow transmogrified into a wholesale energy sale!

But what is the point of all this?  Simple - if these are wholesale energy sales, then FERC has sole regulatory control, and pro-solar policies such as NEM would be replaced by, at best, compensation for excess energy exported at the wholesale rate.  Never mind that SCE is charging you anywhere from 19¢ to 40¢, you are only going to be compensated at the 2-6¢ rate!

Much of the “logic” behind the petition argument will be familiar to readers of this blog: rooftop solar is economically inefficient, NEM distorts wholesale energy markets, and imposes unfair burdens on ratepayers without solar.  Nevermind that all of these points have been debunked before (their expert calls those debunking efforts “irrelevant"), what is important to note is that while many of us are locked out and hunkered down during this crisis, are opponents are not.  They are hard at work, hiring top-dollar DC lawyers to press the case while the rest of us are just trying to get through the month.

Make no mistake about it - if this petition is successful, it will be the end of NEM as we know it, and not just in New England, but nationwide!

This is where organizations like CALSSA(for solar installers here in CA) and the Solar Rights Alliance (for solar system owners) are so critical.  If you are a solar installer, or run a solar company and you are not a CALSSA member, shame on you.  Join!  If you have a solar installation on your roof and you don’t belong to the Solar Rights Alliance - wake up!  Join!

NERA’s petition was filed on April 14th and under the fast track rules that NERA requested (and paid a $30,000 filing fee to secure), comments are due by mid-May.   We will update you when we learn more about its progress.  Watch this space.

09/27/13

  01:44:00 pm, by Jim Jenal - Founder & CEO   , 744 words  
Categories: Climate Change, Ranting, Net Metering

A Tale of Two Reports: IPCC & PUC

In a curious bit of timing, two reports of great significance are being released today.  The one that will get all of the headlines is the latest assessment on climate change coming from the UN’s Intergovernmental Panel on Climate Change.  The second report will see far less attention, but is inevitably linked - the report for the California Public Utilities Commission on the costs and benefits of Net Metering.  We will have more to say about both in the coming days, but here is our first take.

Since 1947, the Bulletin of the Atomic Scientists has kept a “Doomsday Clock” showing how close to midnight - and thus, human-induced annihilation - the world was.  At the depths of the Cold War the clock was as close as 2 minutes away, but by 2007 the clock was wound back to twelve minutes to midnight - the “safest” the world had been since the dawn of the Atomic Age.

But for Rajendra Pachauri, the lead scientist on the IPCC report, climate change has replaced nuclear destruction as mankind’s greatest threat.  According to him, “we have five minutes before midnight."  The report’s Summary for Policymakers, which can be downloaded now from the IPCC website, includes numerous graphs and illustrations to buttress Pachauri’s conclusion, here are two:

average surface temperature changes

 

That map makes it pretty clear that the globe is heating up and in some parts of the world, heating very significantly.

But what about the “Global Temperature Standstill” that deniers like to tout?  Isn’t it true that for the past decade, surface temperature rise has leveled off and thus, Climate Change is nothing to worry about?

The short answer to that is, not so much - take a look:

land and surface temps

 

That last bar is for the past decade and it clearly shows yet another decadal increase - and that is based on observed temperatures, not computer models.  And keep in mind that these are surface measurements - yet many climate scientists believe that the majority of the warming effects are occurring in the deep ocean.

So no, warming hasn’t halted, and we need to do all that we can to reduce emissions of Greenhouse Gases if we are to avoid making the clock strike twelve.

Which brings us, sadly, to the other report just released on the Costs and Benefits of Net Metering in California.  Currently, the overwhelming number of residential and commercial solar installations in the state benefit from Net Metering which provides a one-for-one credit for energy produced and exported to the grid against energy consumed at a later time.  In a sense, the grid acts as a storage device for solar clients, allowing them to bank credits during the day and then drawing on those credits in the evening, at night, or on cloudy days when the solar system cannot meet current needs.

The take-away from the 319-page draft report is summarized in this chart:

NEM cost benefit analysis results

 

According to this analysis, the net cost of Net Metering by 2020 when the caps on how many net metering customers the IOUs must allow is reached, will be over $1.1 billion, or slightly more than 3% of the “revenue requirement” of the three utilities studied.

That sounds like a significant imbalance—until your realize that the report contains this incredibly important caveat which renders the entire analysis suspect:

Lastly, it is important to note that the attached NEM [i.e., Net Metering] Cost-Effectiveness Evaluation is focused exclusively on the utility ratepayer impacts of NEM, and does not include the overall societal benefits from the deployment of clean energy resources, although significant environmental, public health and other non-energy benefits occur.

(Emphasis added.)

Wait, what?

We are supposed to suspend consideration of environmental, public health and other non-energy benefits, even though we know that they are significant?  How can that make any sense?  Worse still, we are supposed to suspend those very considerations at the same time that we are being told that it is “five minutes to midnight” for the world if we do not reduce our GHG emissions.  Talk about a disconnect.

It is patently absurd to ignore the societal benefits provided by solar installations, particularly in light of the existential threat posed by climate change brought about by burning fossil fuels.  The entire analysis views the world from the perspective of the status quo in which fossil-fueled utilities have a “revenue requirement” that the rest of us are expected to provide.  Such a world view - and such a business model - leads to skewed results like these and if followed, would push us all closer to Midnight.

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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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