Thoughts on Solar

Recently, I was talking to a client of ours about why they were so fortunate to be going solar as a Pasadena Water and Power (PWP) customer instead of being an SCE customer.  He expressed confusion when I said this, because everything that he had heard made him think the opposite was true!  That made me realize that some education was called for; hence this post!

I can think of three key reasons why going solar in PWP territory is more desirable than it is with SCE:

• True net metering;
• Tiered, not time-of-use rates; and
• No batteries needed! 

There are others - to be sure - such as the ease of dealing with the respective bureaucracies, but for now we will focus on these big three.  Let’s take ‘em one at a time.

True Net Metering

As readers of this blog know only too well, last year brought draconian changes to how solar system owners in SCE territory got compensated for energy that they put onto the grid.

WHAT SOME FOLKS SEEM TO HAVE MISSED IS THAT THESE CHANGES DID NOT AFFECT
PWP CUSTOMERS - AT ALL!!! 

PWP customers who install solar get full retail value for every kWh that they put onto the grid, which ranges from 20¢ - 33¢/kWh, based on the tier that you are in (more on that in a moment).  Pity the poor folks in SCE territory who are getting closer to 7¢/kWh.

PWP is not governed by the California Public Utilities Commission (CPUC) so their shenanigans in San Francisco do not torment us.  Rather, it is the Pasadena City Council that has the final say in how solar customers are treated, and let’s just say they have your back in ways that the CPUC clearly does not!

Tiered Versus Time-of-Use (TOU) Rates

SCE is forcing all of their customers onto TOU rates and that means that energy used between 4 p.m. and 9 p.m. can cost more than double what it does during the other hours of the day - as much as 61¢/kWh! Ouch!  Of course, most of the year, your solar system is not producing anything during that time period. 

But in PWP territory, the excess energy that you put onto the grid helps drive you out of the top tiers and lowers your overall bill.  Tiered rates are the most beneficial for solar, and PWP has them!

No Batteries Needed!

Batteries - or to use the more technically correct term Energy Storage Systems (ESS) - are costly, take up a lot of space on the wall, and in some areas - Altadena we’re looking at you - there are crazy restrictions on where they can be placed.  Sadly, if you are an SCE customer, the double whammy of no net metering and TOU rates, means you almost have to add an ESS to make going solar sensible.  Oh, and SCE’s power goes out - like a lot.  So having batteries can save you money in the long run and be there when the grid goes down.

Meanwhile, because energy from PWP isn’t priced based on when during the day you use it, you don’t need to store it during the day to offset costs from 4-9 p.m. (What is known as time-of-use arbitrage.)  Moreover, since you get full retail credit for every kWh you put back onto the grid, the grid itself acts very much like a battery for you!  Plus, PWP’s grid rarely goes down - Public Safety Shutdowns are unheard of in PWP territory, but they are a common occurrence for some SCE customers, especially at times of high winds or high heat. (It is 108 as I write this - yikes!)

TL;DR

PWP customers have it sooo good when it comes to adding solar! And while it is too late to save you from that crushing bill you are going to see in October, acting now means you will reap the benefits of adding solar for the next 20+ years! Let’s get started, shall we?

On the heels of the sad announcement of the bankruptcy filing of SunPower - a 39-year-old stalwart of the solar industry - and the loss of 290 jobs in California alone, the California Public Utilities Commission (CPUC) just announced that it will decrease the amount of compensation paid by solar system owners for energy sent back onto the grid!

The CPUC had already slashed the so-called net metering rates with a ruling that took effect a year ago April.  As a result, the payback period for solar installations nearly doubled.  Combined with stubbornly high interest rates and the impact was devastating.  Scores of companies - including a giant like SunPower - closed their doors resulting in thousands of lost jobs.  And for what?  To pad the pockets of the investor-owned utilities like SCE? Outrageous.

But the CPUC isn’t done doing the utilities’ dirty work.  They just finalized a rule change that will slash compensation rates even further!  Starting next year, SCE export compensation will be as low as 3.5¢/kWh!

The only good news - and I’m reaching here because the news is catastrophic - is that for projects that submit interconnection agreements this year, they are insulated from these more draconian compensation rates for nine years.  That means consumers have less than four months to lock in these rates.

Bottom line: if you live in SCE territory and you have been thinking about solar, you owe it to yourself to act now! Give us a call at 626-793-6025, or email us at info@runonsun.solar.

Every now and then we get a call from someone who has solar installed at their home but they’re not happy.  Typically this occurs when they get their “true-up” bill at the end of the year, and are shocked to see that the amount that they owe is way more than they expected!  In many cases this leads them to believe that the system simply isn’t working, and now they want a third-party (like Run on Sun) to come out and evaluate the performance of their system. 

Here are the three leading reasons why that bill is so high…

Your system just isn’t working!

Although this tends to be the number one suspected reason for why the bill is so high, generally it isn’t the actual cause.  Most systems are installed properly and are in operation.  But every now and then we come across a system that simply isn’t working at all.  That was the case with one man who was convinced that his system had never worked and that the company that installed it was simply out to cheat him.  We didn’t see signs of that—the system had been installed and the overall workmanship was acceptable on the surface, so it wasn’t like someone just slapped the panels on the roof and ran away.  But here’s the thing—this was an Enphase system so there should have been monitoring in place to answer the question of how well the system was working.  Except that the installer had never bothered to complete the setup of the monitoring system!

When we came out we were able to access the Envoy directly, and while it could see the microinverters, it was clear that they had never produced any power—in over a year!

So how can a solar system owner prevent this?  Simple—when your system goes live, make sure that the installer walks you through the operation of the system so that you can see with your own two eyes that the system is actually producing power.  (This could be a readout on the inverter/monitoring system, or a spinning performance meter, or an indication that utility meter is going backwards.)  Better yet, ask them up-front how will you be able to know that your system is working, and then when it goes live, make them prove it to you!

If you believe that your system isn’t working, and you live in the greater Pasadena area, give us a call at 626-793-6025, or email us to set up a service call!

Your system is working, but…

This second case is actually far more likely: the system is performing, but it is not meeting your savings expectations.  In our experience there are two main reasons for this: hype and over use.

Beware the hype

One reason for this disconnect is that a dishonest sales person over-hyped the savings to be had from the system installed.  For example, we have seen “savings” projections based just on the size of the system, without regard for how shaded the system was, or its orientation - to say nothing of the actual rate structure that is being used by the utility. 

Shaded systems produce less energy.  Systems aligned away from South will produce less energy.  A utility customer on a time-of-use rate structure may well save less than one on a tiered rate structure (depending on how those rates are designed).

The point is to beware of overly simplistic savings projections.  A proper analysis will factor in all of these issues to provide the best possible estimate of savings.

Solar is not a silver bullet

Even the best savings projection is predicated on future energy usage being consistent with the historical data that the solar company was given (unless increases are specifically discussed and included).  While many people with solar power systems become vigilant about reducing their overall energy consumption, others go in exactly the opposite direction.  Indeed, it is not uncommon to hear people say that part of why they want to “go solar” is so they can afford to run their air conditioning “more” during the summer. 

Solar power systems are finite resources—they can only produce so much energy consistent with the size of the system, and most utilities limit system size to the historical energy usage average at the site.  If you install solar, but then triple how much energy you use during the year, you shouldn’t be surprised if you are not saving any money!

What we have here is a failure to communicate!

Which leads us to the most likely culprit—there has been a failure to communicate between installer and consumer.  At the root of this is Net Metering and the complexities of most energy bills.  (A big part of the blame here goes to the utilities who seem determined to make their bills as complicated as possible!)  Let’s provide an overview of this issue and then illustrate with a specific example.

How Net Metering Works

Solar system owners - at least here in SoCal - operate under utility rules known as Net Energy Metering, or just Net Metering for short.  Here is how this works: on the day when your solar power system is given “Permission to Operate” (or PTO) by the utility, your billing will shift to Net Metering (often the utility will change your meter to allow for that switch).  Every day, as your system operates, you will either be exporting (selling) energy back onto the grid, or importing (purchasing) energy from the grid. 

Think of it this way: you get up at 6 a.m. and it’s dark outside.  You turn on some lights, the radio, coffee maker, etc.  Your solar system isn’t producing anything (it’s dark outside, remember?) so you are purchasing energy from the grid.  You go off to work as the sun comes up, and your system turns on.  All day long, your solar system is producing energy, but there is no one there to use it—the A/C is off, the TV is off, the house is dark—so all of that excess energy is sold back to the utility.  Your fancy new meter keeps track of all of that energy coming and going.

Every billing cycle the utility will look at those readings—how much energy did you sell compared to how much did you purchase—and “net” out the difference.  If you were a net seller of energy, you will have a credit.  If you were a net purchaser of energy you will have a balance due.  But here is where some people get confused—your bill won’t ask you to pay for the energy you used that month.  Typically you  will only be charged for whatever “customer charge” there may be along with taxes and other fees.  The bill for your energy usage (or credit, if you are so lucky) is carried forward to the next billing cycle, and the next, and the next, until you get to the anniversary of your PTO date.  Now your usage will be “trued up” and you will either get a bill to pay (assuming that for the year you were a net energy purchaser) or a check (assuming you were a net energy seller, but don’t get too excited because that payment is really tiny).

Here’s the thing, depending on how much of a net energy purchaser you were, that bill could be pretty significant, in some cases well over a thousand dollars or more!

Of course, you would have been receiving bills every cycle that showed what you were accumulating (either a balance due or a credit) but since there is no related payment required, it is easy for some to overlook those bills, and if this process has never been explained—or even if it was but the consumer simply didn’t “get it” at the time—this can lead to a nasty surprise.

Bottom line - solar companies need to do a better job here in explaining how this works.  (Hence this post!)

A real-life example

Consider a hypothetical solar system owner, let’s call him Bob.  Now Bob is a smart guy, but this is the first solar power system he has ever owned.  His installer explained everything to him when the system went live, but Bob was distracted by the excitement of a potentially zero bill.  His system has Enphase microinverters so he has been receiving energy production emails from Enphase every month, and that looked cool, but he never attempted to reconcile his Enphase report with his utility bill (Bob’s not so big on balancing his checkbook, either).  But to be fair to Bob, the Enphase report that he receives is for each calendar month, but his billing is every two months, and they aren’t calendar months; rather, they run from meter read date to meter read date (e.g., 7/28/2016 to 9/26/2016).

The good news is that Enphase has a reporting feature that allows you to enter any two dates since the system went live and receive day-by-day energy production, with the total at the end.  Let’s see what we can learn when we put Bob’s billing data next to his production data from the Enphase reporting feature:

Ten months of Bob’s usage versus production

The first two columns show the start and end dates for each meter reading/billing cycle.  The bought column is the amount of energy that Bob purchased from his utility.  (Whoa, what happened during the latest billing cycle???)  The sold column is the amount of energy that Bob sold back to his utility during that period, as reported by the utility.  The next column is the amount of energy that Bob’s system produced during the dates in the billing cycle, according to the Enphase website.  But wait, how can this be?  In that first period, the utility says that Bob only sold 774 kWh of energy, but Enphase says his system produced nearly twice as much, 1,338 kWh!

How do we make sense of this disparity?  The answer is simple: local consumption.  It is important to remember that the utility has no idea how much energy Bob’s system is producing, all they see is how much energy Bob is selling back to them.  So both Enphase and the utility are correct, they are just measuring different things.  Enphase measures total energy produced.  The utility measures energy sold to them—the difference is energy used to power Bob’s house that didn’t come from the utility; rather, it came from the solar system!  In that first billing cycle, Bob’s system produced 1,338 kWh and of that, 774 kWh were sold back to the utility, meaning 564 kWh of that production were used to power his house.  And that means that Bob’s total consumption for the month is the amount that he bought from his utility, 1,402 kWh, plus the solar production that was consumed locally, 564 kWh, for a total consumption of 1,966 kWh.  Applying that reasoning to the rest of the data shows that Bob’s overall consumption has increased in every billing cycle except one, with a whopper over the holidays!  (Maybe too many holiday lights?)

The production data shows that Bob’s system has been performing appropriately - increasing over the summer months, decreasing over the winter months.  Here’s a graph that puts that all into perspective:

Bob’s solar power system: Lifetime energy production versus expected.

The blue represents the actual energy produced each day.  The gray line is the predicted system production (in this case modeled using the CSI calculator). Over the lifetime of the system, the maximum amount of energy produced in a day was 29.7 kWh (42% above what was predicted for that day) and on the day when this graph was created, the system produced 15.7 kWh.

Generally, the performance peaks well above what is expected (particularly in the late June through early November period).  But once we get into mid-November things deteriorate—not because of a fault in the system, but because of abnormally wet weather here in SoCal (as we head into a 1″/hour rain storm today!).  For much of the past two months, actual production has fallen well below what was predicted, with just 77% of predicted being realized so far this month.  And yet, despite all of that, overall the system has still produced 99% of its estimated lifetime production.

This points out a couple of key things to me: First, you just gotta love the data that is available through the Enphase monitoring system.  It allows system owners and installers alike to have near-real time access to system performance, as well as to review long-term data to discern trends and uncover patterns.  Priceless!

Second, we as solar professionals need to do a much better job of informing our clients so that they know what to expect.  (I’m leaving out the hype-sters who couldn’t care less what the consumer knows as long as they make a sale.) 

We live with this stuff every day but for most of our clients, this is all brand new, and confusing.  We need to take the time to explain how this works so that they can understand the actual value of their investment.