Thoughts on Solar

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:

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.

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.

With very little fanfare, the Sacramento Municipal Utility District ("SMUD") just convinced the California Energy Commission to allow it to offer a SMUD-owned alternative to installing solar power systems on new homes under California’s just instituted New Solar Homes mandate. As other municipal utilities lined up in support – including PWP, LADWP, BWP and GWP – it is clear that this is nothing short of a full-on assault against the New Solar Homes mandate. Here’s our take…

Solar added to a new home in Altadena

The intent of the New Solar Homes mandate was to install appropriately sized solar power systems on every new home in California.  There are many benefits to such a program, including providing distributed power across the grid, thereby increasing grid reliability, as well as generating jobs and raising public awareness as solar becomes commonplace. 

The SMUD scheme thwarts all of that.  Instead, a SMUD-owned solar farm would have it production allocated across participating new homes.  (Tellingly, the SMUD scheme does not permit privately built community solar farms to participate in the program!)  Worse yet, the SMUD scheme effectively prevents subsequent home owners from adding local solar, since the first 4,700 kWhs must come from the SMUD-owned facility.

So how did this get approved?  In addition to all of the municipal utilities in California lining up behind SMUD’s power grab, so did much of the building industry (as they can simply fill out paperwork for compliance instead of actually building solar systems), and the IBEW (whose members get employed when utility-scale solar farms are built).  On the short end of the stick are local solar contractors, and consumers who lose the power to choose their own, local solar system because the builder decided to opt-into SMUD’s scheme.

What say you, PWP?

Which brings this back home.  While Pasadena Water and Power did not submit their own letter of support (that we could find), their trade association, the California Municipal Utilities Association, did.  Now there aren’t that many new homes being built in Pasadena at this point, but can we expect to see a similar power grab from PWP?  LADWP did submit their own letter and there are plenty of new homes going up within the City’s boundaries - is a similar scheme in the works?

The utilities rely on consumers being largely uninformed as to these schemes to push them through.  We will be keeping an eye on what our local utilities bring forward in the coming months.  Watch this space.

As 2018 drew to a close, the Pasadena City Council adopted a new Integrated Resource Plan that shows the path forward for the City in the coming years. Not surprisingly, there are some big changes in store as PWP moves away from fossil fuels and toward a greener future. Here’s our take…

Where are we now?

We love Pasadena, but it has a long way to go before it becomes as green as we would like it to be.  For example, here is PWP’s latest power content label that shows the sources of its electricity, compared to California as a whole:

Yikes! 31% of our power overall comes from burning coal - compared to just 4% for the state overall!  

Somewhat surprising is the relatively low amount of natural gas in the mix, given that the Glenarm power plant is now entirely fueled by natural gas.

On the other hand, the City is doing very well in utilizing biomass and waste materials as a fuel source, well ahead of such efforts in the state as a whole.

So it is clear that a great deal of work is yet to be done, and it is the intent of the newly adopted IRP to show the way.

One thing that jumps out of the new plan is that coal is to be eliminated entirely by June of 2027 when existing supply contracts expire, and no new coal contracts will be signed.  Moreover, that plant is scheduled to switch to natural gas by 2025, so coal burning for PWP should end by then.

Distributed Energy Resources

As of the writing of the IRP, there were 1,303 PWP customers who have installed solar power systems at their homes or commercial/non-profit sites.  Collectively, those systems amount to 10.4 MW of installed capacity, with an estimated annual production of 16,600 MWh of energy.  That makes the average installed system size just under 8 kW.

One baffling detail in the planning section of the report: relying on a levelized cost of energy (LCOE) analysis by the Lazard consulting firm, they assert that the LCOE of residential solar (after allowing for the federal tax credit) is from 14.5-24¢/kWh!  Frankly, we aren’t sure how they arrived at that number, since our projects generally project an LCOE in the 9-11¢/kWh range.

So more solar is in PWP’s future, but they won’t be supporting it on homes, schools, or businesses anymore.  Sad.

Other Takeaways…

Here are a couple more takeaways from the 249-page report:

• The City is planning on installing 122 EV charging stations in the next few years
• Electric bill increases would range from roughly 2.7% for residential customers, and up to 3.4% for commercial customers

You can find the entire report here: Pasadena’s Integrated Resource Plan.

The Pasadena Solar Initiative - clearly the best run solar rebate program in SoCal - is ending December 31, 2017!  Here’s our take…

For PWP customers, this means that you need to get a complete rebate application on file before the end-of-year deadline.  You then have six months from the date of the reservation to complete the project.  The rebate, while it lasts, is $0.30/Watt for both residential and commercial customers, and twice that, $0.60/Watt, for non-profits.  If you have been sitting on the sidelines wondering when would be the best time to go solar in PWP territory, well, here’s your answer: Now!

The PSI has been around in its present form almost as long as Run on Sun has been in business, and we would be remiss if we didn’t take a moment to give credit for this wonderful program.  Over the past nine years it has been a model of how to run a rebate program: open, transparent, easy to participate with predictable rebate amounts, and no sudden interruptions in availability.  (Cf. alleged rebate programs in Glendale and Burbank, or the horrible SGIP program.) 

We are proud to have worked with all the folks behind the PSI at Pasadena Water & Power and they have done a terrific job! We are greatly appreciative of their hard work, particularly Mauricio Mejia, Irma Cid-Lujan, Alex Gonzalez, and John Hoffner.  Thanks for a successful nine years - well done!

Run on Sun is proud to call Pasadena home.  We absolutely love this place.  But it isn’t perfect, as evinced by the latest report on where Pasadena gets its power - that’s right, the 2016 Power Supply Content Label is now out, and it is a mixed bag to say the least!  Here’s our take…

Every year, California utilities are required to post a table that reflects the sources of the power that they provide, the “Power Supply Content Label."  We wrote about PWP’s energy mix when the previous label was published, and at the time we noted that coal constituted 34% of the energy supplied, with natural gas another 6% - a full 40% coming from fossil fuels.  Surely a year later the news would be better, right?

Not so much - here it is, read it and weep:

2016 Power Supply Content Label

Both coal and natural gas went up!  While the overall statewide mix is just 4% coal, PWP gets 10 times that much, a whopping 40%!  Combined with natural gas and 52% of our power comes from fossil fuels.  Moreover, half of the “renewables” comes from burning biomass and waste, thereby also contributing to greenhouse gas emissions!  (One bright spot - utility scale solar now accounts for 5% of all energy, up from zero the year before.)

Lest you think all of the small munis are as bad, not so.  Glendale Water and Power, in particular, is kicking PWP’s backside, with only 5% from coal, and just 29% from natural gas.  GWP also gets 26% of its power from wind!  (Here’s a link to their power label.)

PWP is making some strides, however.  Last year they replaced a 51-year-old steam plant with a combined cycle turbine unit that can produce power within minutes, compared to the 72-hour start time for the old system.  But at 52% fossil fuels, PWP still has a long way to go!