Tag: "sce"

10/28/16

  12:14:00 pm, by Jim Jenal - Founder & CEO   , 1654 words  
Categories: All About Solar Power, PWP, SCE, Residential Solar, Ranting

Understanding Tiered vs TOU Rates

A client of ours noted that Pasadena Water and Power (PWP) offers, in addition to its regular, Residential tiered rate structure, the option to switch to a Time-of-Use rate structure, and he asked if he would derive additional savings from making that switch. Turns out that is not an easy question to answer, and there certainly isn’t a “one size fits all” result. We decided to take a closer look into these rates both for PWP and for the folks in Southern California Edison (SCE) territory.

SPOILER ALERT - The following is pretty much down in the weeds.  You have been warned!

Defining Tiered and Time-of-Use (TOU) Rates

Let’s start by defining our terms. Most residential electric customers, of both PWP and SCE, are on a tiered rate structure. That means that there are two or more cost steps - called tiers - for the energy that you use. Tiered rates assume that there is some minimally expensive charge for the first allocation of energy per billing cycle, and that as you use more energy your cost for energy increases. For example, SCE’s Domestic rate has three tiers and in the first tier the charge is 8.8¢/kWh, in the second tier the charge is 16¢/kWh, but the final tier is 22.4¢/kWh! (There  is also a non-tiered component that adds another 6.9¢/kWh to the customer’s bill.)

PWP, on the other hand, has a somewhat perverse tier structure in that the lowest tier is very cheap, 1.7¢/kWh, the second tier is significantly higher, 13.5¢/kWh, but the final tier actually goes down to just 9.9¢/kWh! Since the whole point of tiered rates is to provide an incentive for heavy users to reduce their usage, PWP is actually rewarding those who consume more than 25 kWh per day with lower rates! Very odd.

Time-of-use rates, on the other hand, are generally not tiered. Instead, the day is broken up into segments and the cost of energy varies depending on the segment in which it is consumed. PWP refers to these segments as “On-Peak” (from 3-8 p.m.) and “Off-Peak” (all other hours). But PWP’s TOU rate retains the tiered element as well, making it a truly odd hybrid rate structure.

SCE’s approach is more involved, dividing the day into three, more complicated segments: “On-Peak” (2-8 p.m. weekdays - holidays excluded), “Super Off-Peak” (10 p.m. to 8 a.m. everyday), and “Off-Peak” (all other hours).

For both PWP and SCE there is a seasonal overlay on these rates, with energy costs increasing in the summer months (defined as June 1 through September 30).

(It is important to note that both PWP’s and SCE’s TOU rates put the most expensive energy in the late afternoon to evening time period - pricing energy to offset against the “head of the duck.” Ultimately, these rates will create the energy storage market in California, but that is a post for another day.

Analyzing the Benefits of a Rate Switch - Pre-Solar

Assuming that one can create a spreadsheet to model these different rates (not a small task in and of itself!) there is one more hangup - data. Both PWP and SCE report total monthly usage to customers on their tiered rate plans - but in order to analyze your potential bill under a TOU rate, you must have hourly usage data for every day of the year! (Because there are 8,760 hours in a [non-leap] year, such a usage data collection is typically referred to as an 8760 file.)

The standard meters that PWP has installed simply do not record that data, so the average PWP customer has no way to know whether they would save money by making the switch.

On the other hand, most SCE customers do have access to that data and they can download it from SCE’s website.

After you create an account, login to it and go the “My Account” page. On the left-hand-side you will see some options - click on “My Green Button Data” (the too cute by half name for the interval data you are seeking), select the data range for the past twelve months, set the download format to “csv” and check the account from which to download. Then press the “download” button and cross your fingers - in our experience, the SCE website fails about as often as it actually produces the data that you are seeking!

Modeling PWP

Given that PWP doesn’t have data available, is there any way to estimate what the results might be? The answer is, sort of. We took an 8760 data set from an SCE customer and used that as our test data for both PWP and SCE. (The data file does not identify the customer.) Since the data file has an entry for every hour of every day, we can segment the usage against the On-Peak and Off-Peak hours, and using a pivot table - probably the most powerful took in Excel - we can summarize those values over the course of the year, as you see in Figure 1.

PWP segmented usage

Figure 1 - Usage Profile for PWP

Summer months are highlighted in orange. For this specific energy usage profile, Off-Peak usage is more than twice that of the On-Peak usage (9,806 to 4,009 kWh respectively). So how does that work out when we apply the two different rate structures? The table in Figure 2 shows the details of the two rates:

PWP standard and TOU rates

Figure 2 - PWP Rates - Standard Residential and TOU

Under both rate plans, the distribution is tiered (with the perverse reverse incentive for usage above 750 kWh). Added to that is either the seasonally adjusted flat rate for energy, or the seasonally adjusted TOU energy charge.

Applying those rates to the Usage Profile in Figure 1 allows us to see what the energy and distribution components would be under both approaches. Given the hybrid nature of these rates, you might expect them to be similar and you would be correct. The distribution charge - which applies to both - comes to $1,180 for the year. The flat rate energy charge comes to $893, whereas the TOU charge is $985. Meaning that someone electing to use the TOU rate would have a yearly total of $2,165, whereas the flat rate user would have a total bill of $2,074, making the TOU rate - for this specific energy profile - 4% higher.

Beyond that, PWP has a number of other charges - such as a public benefit charge, an underground surtax, and a transmission charge - that are only tied to total usage, so the ultimate difference between these two rates is even smaller.

Modeling SCE

SCE rate structures are significantly more complicated that PWP’s. For example, the tier 1 (aka baseline) allocation varies by location. Since SCE covers such a huge and diverse area from cool coastal regions to absolute deserts, customers are allocated more energy per day in their baseline depending upon where they live. In the area around Pasadena that is covered by SCE, a typical daily baseline allowance would be 13.3 kWh in the summer and 10.8 kWh in the non-summer months. The baseline then is that number times the number of days in the billing cycle. Tier 2 applies to every kWh above baseline, but below 200% of baseline. Tier 3 applies to everything beyond that. As with PWP, the tiered rate only applies to “delivery” charges. The energy generation charges are the same all year. Here’s what that rate structure looks like:

SCE Domestic Tiered rate

Figure 3 - SCE’s Tiered Domestic Rate

The first thing that you notice when you look at this rate is how much higher it is than the rates from PWP, and the end calculation bears that out - the same usage that resulted in an annual bill of $2,074 in Pasadena becomes $3,227 once you cross the border into Altadena, South Pasadena, San Marino, or Sierra Madre - an increase of 56%! (There’s a reason why a growing percentage of our clients are coming from those surrounding, SCE-territory communities!)

So what would happen if this beleaguered client were to shift to a TOU rate? First, we need to re-parse the usage data according to SCE’s more complicated segmentation scheme, which gives us Figure 4:

SCE segmented usage data

Figure 4 - SCE’s Segmented Usage Data

Once again, the On-Peak usage is the smallest category of the three, amounting to just 23% of total usage, compared to 42% in Off-Peak, and 35% in Super Off-Peak.

Of course, SCE can’t do anything in a simple fashion, so they have not one but two basic approaches to their TOU rates, Option A and Option B.  Option A rates run from a low of 13¢/kWh (in summer Super Off-Peak), to 29¢/kWh (during summer Off-Peak) to an eye-popping 44¢/kWh (during summer On-Peak).  However, Option A includes a credit of 9.9¢/kWh on the first baseline worth of energy which reduces the monthly bill by roughly $30.

Option B deletes that baseline credit and replaces it with a “meter charge” (even though it is the same meter!) of 53.8¢/kWh/day, or roughly $17/month.  In return, the On-Peak charges are significantly reduced from 44¢/kWh to just 32¢/kWh.

So how does this shake out?  The results are quite surprising, as shown in Figure 5.

SCE rate comparison - Tiered vs TOU

Figure 5 - SCE Rate Structure Comparison

The two left columns show the month-by-month calculations for both delivery (the tiered component) and generation (the flat component).  The two right columns show the month-by-month calculations for the two different TOU rates.

The bottom line is striking: under TOU-A there is a savings of 5% over the tiered rate, whereas the savings jump to 19% by going to TOU-B!  That is a savings of $600/year just by changing rate plans - a switch that any SCE customer can make.

MAJOR CAVEAT: YOUR MILEAGE WILL VARY!

The results displayed here are entirely dependent on your actual energy usage and no two usage profiles are alike.   It is possible, even likely, that some usage profiles will see an increase in bills under either TOU option.

The good news is, that for a nominal fee,  this is an analysis that we could do for any SCE residential customer - we would just need access to your usage data.

So that completes our pre-solar analysis. In our next post, we will look at how these results change when you add a solar power system into the mix.

 Permalink2 comments »

08/24/12

  01:36:00 pm, by Jim Jenal - Founder & CEO   , 1151 words  
Categories: All About Solar Power, Solar Economics, SCE/CSI Rebates, SCE, 2012

State of SoCal Solar 2012 - Part 1: Overview

UPDATE - Read Part 2 of our series here: Who’s Hot and Who’s Not?


One year ago we wrote a three-part series analyzing six months worth of CSI data that turned out to be our most read blog posts ever. So back by popular demand, here is our analysis of the first half of 2012 CSI data in the SCE service area.

Methodology

First a brief review of our methodology.  We started by downloading the Working CSI data set dated August 22, 2012.  (Here’s a link to the CSI Working Data download page, and here’s a link to the data set (8MB zip file) that we used for our analysis.)  As we did a year ago, we limited our analysis to just the data from the SCE service area.  To limit our time period to the first half of 2012 (equivalent of what we did last year), we took the latest of a series of milestone dates in the CSI data (from First Reservation Date to First Completed Date) and used that as our Status Date and limited that date to values from 1/1/2012 to 6/30/2012.  Collectively, that accounted for 9,669 projects, an increase of 53% over the same period last year!

So that we can compare apples to apples, our analysis uses CSI AC Watts as the measure of system size (except where noted) instead of the more commonly reported DC or Nameplate Watts.  Why did we do that?  Well, not all 5kW Nameplate Watts systems are the same.  Some systems use less efficient inverters whereas others have panels that have very poor temperature performance (as indicated by their PTC rating), and some sites are poorly oriented or have substantial shading.  CSI AC Watts values take all of those factors into consideration - thereby giving a truer measure of the system’s actual performance.

Overview

Apart from the dramatic jump in the number of projects over the same period last year, how does the overall data for the first half of 2012 compare to that data from last year?  Here’s what we found:

2011 vs 2012 CSI systems

Even though the number of projects increased dramatically from the same time period last year, the potential installed capacity of the projects declined significantly.  This may well reflect the expiration of the federal 1603 Treasury Grant program as it became harder to finance new commercial projects after the first of the year.  Here’s how the averages changed from 2011 to 2012:

Average system data, 2011 vs 2012

The average system size in the 2012 data dropped 46% from the same period in 2011.  Likewise, rebate expenditures per Watt fell from $1.33 to $0.94, or 29%.  At the same time, the system cost per Watt also declined, but far less dramatically, from $6.37 to $6.13/Watt.  We will have more to say about system costs later.

Altogether, the data reflects a total of 519 different solar contractors, of which 213 (41%) were responsible for only one project.

Delisted by Design?

One intriguing item we noted last year was the significant number of projects - a full 11% - that were categorized as “delisted” meaning that they had been cancelled for one reason or another.  How did that number fare in our new data?  It dropped significantly down to just 4.2% of all projects, 6.3% of the potential installed capacity.

Of course, projects can be cancelled for a host of reasons.  Nevertheless, we decided to see if there were any companies that jumped out as having an unusually high rate of delisted projects.  We listed all of the companies that had any projects flagged as delisted (a total of  113 different companies) and compared that to their total number of projects.  We extracted those companies that had ten or more delisted projects and rank ordered them by the percentage of all projects that were delisted.

Here’s what we found:

project delisting by company

Holy smokes, what is going on here?  Either Remodel USA, Herca Solar and A1 Solar Power are really unlucky, or something about how they create projects would seem to be problematic.  We will have more to say on this point in a subsequent post in this series.

Oh and a note to Do-It-Yourself’ers - you have a one in twelve chance of not completing your solar project.  Maybe solar really is something better left to the pros!

Is Bigger Still Better? (Or at least Cheaper?)

We closed Part 1 last year by looking at how the size of a system drives down the cost, and we wondered if the same would hold true this year?  To find out, we excluded delisted projects from our data and divided the remaining projects based on system size with one category being systems below 10kW and the other being between 10kW and 1MW.  (Strangely, we had to exclude some real outliers from our “small” system category - can you believe it, we found systems priced at over $30/Watt?  Again, much more to say about that in a subsequent post.)

Here’s our results for the small system category:

system cost vs system size, 2012 data, systems <10kwOur trend is still downward as system size gets larger, but the slope is not nearly as steep as it was in our corresponding graph last year.  Costs start at $8.59/Watt for the smallest systems and decline to an average of $6.41/Watt for systems just under 10kW.  That’s a rate of decline of $0.24/Watt per kilowatt of system size increase, in constrast to a rate of decline of $0.34 last year. Certainly as component costs decrease, their related economies of scale would likely flatten out and that is what this data appears to be showing.

Finally, then, let’s turn to the “big” systems - those between 10kW and 1MW - how did our system costs do in that group?

system cost vs system size, 2012 data, systems >=10kw

Again, another outlier as our highest system cost here is higher than it was a year ago - $16.50 vs $15.50/Watt.  Overall, we continue to see the downward trend as system size increases, but again, not as pronounced as it was a year ago.  This year, we see the average cost of a 100 kW system coming in just below $6/Watt whereas a year ago the 100 kW benchmark was closer to $6.80/Watt.  So our trend line is lower, but flatter than a year ago.

Moreover, we see far few systems in the 500kW and up category compared to last year.  Specifically, this year we have only 24 projects that crossed that threshold (10.98 MW total capacity), compared to 32 last year (21.6 MW).  Bottom line - projects have gotten smaller and really large projects have dropped off substantially.  Without the pull of those larger systems, it is not surprising that we are not seeing the same downward pressure on costs for larger systems.

Preview of Coming Attractions…

That’s enough to get us started.  Yet to come: whose equipment is hot and whose is not?  Any significant new kids on the block (be they installers or products)?  And who are our outliers this year?  (Hint - you’ve already seen some of those names!)  So stay tuned as we name names and follow the data wherever it may lead!

And of course, if you have thoughts on cuts of the data that you would like to see, please let us know in the comments.

08/29/11

  10:40:00 am, by Jim Jenal - Founder & CEO   , 857 words  
Categories: All About Solar Power, Solar Economics, SCE/CSI Rebates, PWP, SCE, LADWP, Commercial Solar, Residential Solar, 2011

The State of Solar California - What Does the CSI Data Reveal?

The California Solar Initiative (CSI) is responsible for overseeing solar rebates for California’s three Investor Owned Utilities (IOUs): PG&E, SCE and SDG&E, and in that role the CSI program collects some very interesting dataAs we have in the past, we decided to dip into the data from the first half of this year to gain some insights into the State of Solar in California.  Over the next several days we will be reporting on what we have learned - and there are some very surprising things in here to be sure!

Overview & Methodology

A word first about how we processed the CSI data.  We downloaded the most recent active data set as of this writing (the August 24, 2011 data set to be precise) and parsed it into Excel.  Since we were only concerned about systems in our service area, we excerpted out just the data from SCE.  To narrow our focus more, we wanted to only look at applications that had significant status during the first half of this year.  The CSI data has a host of date fields - we took the latest of the fields ranging from First Reservation Date to First Completed Date as our Status Date and excerpted those that fell between 1/1/2011 and 6/30/2011 - a total of 6,306 data points.

That’s a fair amount of data but it necessarily omits any data at all from the municipal utilities such as Pasadena Water & Power (where we do much of our work) or LADWP.  Unfortunately, none of the munis make their program data generally available - which is particularly odd given that the local residents actually own those utilities (and thus, their data) - but that is a topic for another day.

Finally, for the purpose of these posts, all system sizes are reported in CSI Rating AC Watts (to account for differences in equipment choice and system design) as opposed to DC (or nameplate) Watts.

What can we say about those 6,306 projects?  Collectively they account for 164.7 MW of new solar power at a total installed cost of just over $1 billion - with incentive amounts totaling $219 million - roughly 21% of the installed cost.  Unfortunately, not all of those are built - or even ever will be.  Fully 11% (698) of those projects have the status ‘Delisted’ - meaning that they have been cancelled for one reason or another.  Those delisted projects account for 37.8 MW of potential solar power that presumably will never see the sun.  (Do some installation companies have a significantly higher rate of “delisted” systems?  We will answer that question in a subsequent post - stay tuned!)

The remaining 5,608 are split between “Installed” and “Pending” with 55.8% (3,131) installed and 44.2% (2,477) pending.  Breaking that down a little more, the installed projects account for  33.8 MW worth $240.1 million with incentive amounts totaling $57.1 million.  In contrast, the pending projects account for almost three times as much capacity at 93 MW worth $575.8 million with incentive amounts totaling $120.6 million.  (That is, nearly three times the to-be-installed solar cpacity for roughly twice the rebate dollars.)  On average, installed projects cost $7.09/Watt whereas pending projects cost $6.19/Watt - a positive trend for consumers since it shows the cost of solar power systems declining over time.

Does Bigger = Lower Cost?

Finally, for today, let’s examine whether the data supports the notion of solar economy of scale - that is, as system size increases does the installed cost/Watt decline?  To get a handle on that, we took two different cuts through our data set - “small” installed or pending systems <10 kW, and “large” systems ranging between 10 kW and 1MW.

System cost as a function of system size - small systems <10 kWFirst, here’s the graph for the “small” systems (consisting of 4,992 installed or pending systems - click on the graph to view full size).  As the trend line makes clear, larger systems really do drive down costs - decreasing from over $10/Watt at the small end of the range to just above $6/Watt for systems around 10 kW.

Another interesting observation from this graph are the outliers - with some data points below $3.00/Watt (mostly from self-installed system) all the way up to nearly $18/Watt!!! (We will have way more to say about those data points - and who is responsible for them - later in this series.)

Large system costs

If we now look at larger systems - those between 10 kW and 1MW - our data set has 587 such systems and again, the trend line shows the decline in system costs as system size increases.  (Note, because there is such a huge range in system sizes on this graph, we plotted the system size on a log scale.)  Some of these outliers are also pretty curious - a 200 kW system coming in at over $14/Watt?

Of course, this data is showing what happens when an individual project gets larger and there the trend is clear.  One might well ask, does the same trend apply to larger installation companies?  In other words, as a company has more and more installs, does that economy of scale translate into lower costs for the end consumer?  That’s a very interesting question and the answer - coming in our next post - just might surprise, or maybe even disturb you.

If there are some other cuts of this data that you would like to see, just let us know in the comments.  Trust me, we are just getting started!

02/22/11

  10:32:58 am, by Jim Jenal - Founder & CEO   , 1230 words  
Categories: All About Solar Power, Solar Economics, Utilities, PWP, SCE

What You Need to Know About Commercial Solar Power in Three Easy Lessons - Part 1: Understanding Your Bill

While many companies sit on the sidelines with accumulated capital, we have argued before that spending some of that capital on a commercial solar power system makes great economic sense.  But for some companies (and their facility managers and accountants and Board Members, and so on), commercial solar is still a mysterious concept, filled with confusing jargon and competing claims.  Can a commercial solar power system really be as economically beneficial as the proponents (like this blog) claim?

Rather than answer that question directly (well, ok, the answer is YES but please read on), we thought it would be useful to actually layout the case for commercial solar power in some detail.  Although no blog post (or series of blog posts) can take the place of a face-to-face conversation that takes into consideration all of the relevant  elements of a specific company’s situation, there are enough common elements that can and should be explained to demystify the overall process.  That is the task of this series - to teach you, the business/building owner everything you need to know in preparation for installing a commercial solar power system on your building.

First things first - before you ever even call a solar power company - and we will explain how to find the good ones in Part 3 - you need to start with something more mundane: your electric bill.  When was the last time that you really looked at your electric bill?  For many business or building owners the answer is never.  Oh sure, you certainly know how much you are paying - but do you know why you are paying so much?  What horrors are hiding in your bills?

The Shocking Facts Hiding in Your Electric Bill

The Basics - Usage & Demand

There is probably a very good reason why neither you, nor anyone else at your company has ever looked closely at your electric bill - it is terribly confusing.  Let’s start with some basics.  Almost every commercial user pays for at least two major components on their electric bill: usage and demand.

Usage is the more familiar component as it is the basis for your residential electric bill.  It is based on the total amount of energy that you used over the course of the billing cycle (usually one month for commercial customers).  Usage is measured in total kilowatt hours (kWh). Usage charges are based on some specific cost per kWh which is defined in the rate schedule that applies to your utility account (more on rate schedules in a minute).

Demand is a bit more complicated - it is usually defined as the greatest amount of power that the utility has to provide to you over a measured period of time during the billing cycle.  For SCE customers, demand is the peak power required during any 15 minute period over the month.  That means that if your building has multiple HVAC units and they all come online during the same 15-minute window, your demand will spike much higher than it would if those units came on in a staggered fashion (since the power demand of an HVAC unit is highest when the compressors are running as they will be when the unit is first started.)  Demand charges are billed per kilowatt (kW) of power.

Rate Schedules

Every utility has a variety of rate schedules that might apply to a commercial building and you could pay vastly different amounts - that is to say you could save a lot of money - by switching to the most economical rate schedule for which you qualify.

GS-2 rate structure model
SCE’s GS-2 Rate Schedule Model (click for larger)

Case in point - SCE has two rate structures that commonly apply to small to medium size commercial buildings: GS-1 and GS-2.  (For those ready to get into the details, here is a link to the GS-1 rate schedule and here is a link to the GS-2 rate schedule.)  The beauty of the GS-1 rate schedule is that it has no demand component.  But here’s the catch - your peak demand must not exceed 20 kW in any three of the past twelve months.

We had one potential customer who was paying under GS-2.  When we analyzed their bills - the first step in preparing a proposal for installing a commercial solar power system - it was apparent to us that based on their bills, they were entitled to actually be billed under GS-1.  When we met with their facilities manager to discuss our proposal, we pointed out that they could have saved over $2,000 the past year if they had been on the right rate schedule and we encouraged them to contact SCE about getting switched to GS-1.  (No, SCE had not suggested that to them.)  Strangely, none of the other solar companies that they had talked to had explained that to them, yet once they called SCE, they were switched over immediately.  (Oh, and they hired us to handle their commercial solar installation!)

Here’s another example.  PWP generally has low rates, but their mid-level commercial rate schedule (M-1)  has one of the most significant “gotchas” we have seen anywhere - and we are yet to speak to a single customer who was aware of this before we pointed it out.  The M-1 rate structure includes a demand component (labeled “distribution"), but unlike SCE’s demand component described above, PWP charges you for the peak demand in any 15-minute window for the past 12 months! That means that if on one unlucky day, everything in your building comes online all at once during the same 15 minutes, not only will you pay for that peak demand that month, you will pay for that peak demand for every month for the next year (unless a higher demand comes along to take its place)!  For one of our customers, they had a peak demand one month that spiked at 82 kW, yet their average for the next 12 months was only 36 kW.  Under the M-1 rate schedule, they paid $5,300 more than they would have if they only paid for their monthly peak demand.

Models Matter

At Run on Sun we have devoted a lot of time to mastering the intricacies of the various rate schedules used by the utilities in our service area.  We have turned that understanding into a series of rate schedule models that allow us to accurately model your prior utilities bills and then make accurate predictions regarding your potential savings from a host of measures - changing rate schedules, reducing your usage or peak demand, or installing a solar power system. Some companies simply assign a fixed amount of savings per kWh that their proposed solar power system will produce and call that your potential savings.  Such an approach ignores the complexities of how your electric bill is actually calculated and can mask other steps that you could take to save money.

We firmly believe that energy efficiency is way more cost effective than energy generation and we will share with you our ideas and observations on how you can save money long before you throw the switch of (or even sign the contract for) your commercial solar power system.  So before you pick up the phone, pick up your electric bills and check out what is hiding there - it is the first step in getting the greatest value from your commercial solar power system.

Up Next: Part 2 of Our Series - Understanding Solar Rebates and Tax Incentives as they apply to a Commercial Solar Power System.

<< 1 2 3

Search

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.

Ready to Save?

Let’s Get Started!

We're Social!



Follow Run on Sun on Twitter Like Run on Sun on Facebook
Run on Sun helps fight Climate Change
Responsive CMS