As this thread is getting off topic, just a reminder of how you can help, big or small: Save California Solar
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California Utilities Plan All Out War On Solar, Please Read And Help
- Thread starter gene
- Start date
Don't get me wrong. I'm on your side of the argument. But one thing you say here I don't quite understand. Net metering requires a residence with solar to frequently tap the grid for energy, even if the residence generates more energy throughout the year than they use. When they use that energy, doesn't it use transmission lines along the way? Because when they tap the grid for energy, isn't that process by itself identical to a residence that doesn't have solar? I agree with your greater point. Just am confused on this.
MisterScary
Member
I signed the petition. I don't currently have solar but am seriously considering it. This alarming news about increased solar fees and monthly net metering is very concerning.
As someone who works at the CPUC (though I do not work on NEM), I'm disappointed at the opinions masquerading as facts on this thread about how the state is looking at the future of NEM. No one at the CPUC has made up their mind about the future of NEM because the proposals were just filed: the Rulemaking at the Commission - R.20-08-020 - was opened last September and new NEM proposals were only filed last week (March 15, 2021 - see the docket here). Yes, the utilities have issued proposals as is their right, but as you can clearly see in the docket, 17 other parties ranging from environmental groups to public advocates to solar and storage industry representatives have filed NEM proposals of their own, and I see nearly 160 people from a wide variety of businesses, agencies, and organizations on the service list which, in my experience, is a lot for a proceeding (and the docket indicates they are quite active too). Whatever the final result is months and months from now, it will involve meticulously sifting through the input from all these parties to reach a measured decision.
As a solar owner myself, I get that we have a vested interest in the current NEM structure, but that doesn't mean that it's perfect or that it works well for everyone in California. This thread is evidence that there are a lot of voices trying to be heard on the subject. As we learn more each passing year about solar and its use in CA, we should strive to improve NEM to better reflect the evolving landscape. That means, at the CPUC, revisiting NEM every so often to make that evaluation, and that's what is happening right now.
If you truly want to make yourself heard, (1) read what is actually being discussed in the CPUC proceeding and (2) call in to the voting meeting this coming Thursday the 25th (or a future meeting...usually every other Thursday) and make a public comment (use this link) - I know for a fact that the Commissioners listen and that you will be heard. And it's better to make yourself heard NOW when we're fairly early in the NEM debate and nothing has been decided.
As a solar owner myself, I get that we have a vested interest in the current NEM structure, but that doesn't mean that it's perfect or that it works well for everyone in California. This thread is evidence that there are a lot of voices trying to be heard on the subject. As we learn more each passing year about solar and its use in CA, we should strive to improve NEM to better reflect the evolving landscape. That means, at the CPUC, revisiting NEM every so often to make that evaluation, and that's what is happening right now.
If you truly want to make yourself heard, (1) read what is actually being discussed in the CPUC proceeding and (2) call in to the voting meeting this coming Thursday the 25th (or a future meeting...usually every other Thursday) and make a public comment (use this link) - I know for a fact that the Commissioners listen and that you will be heard. And it's better to make yourself heard NOW when we're fairly early in the NEM debate and nothing has been decided.
Here's an interesting bit of news that seems relevant to this discussion:
from: Michigan Tech
Value estimations for grid-tied photovoltaic systems prove solar panels are beneficial for utility companies and consumers alike.
Beyond the environmental benefits and lower electric bills, it turns out installing solar panels on your house actually benefits your whole community.
For years some utility companies have worried that solar panels drive up electric costs for people without panels. Joshua Pearce, Richard Witte Endowed Professor of Materials Science and Engineering and professor of electrical and computer engineering at Michigan Technological University, has shown the opposite is true — grid-tied solar photovoltaic (PV) owners are actually subsidizing their non-PV neighbors.
from: Michigan Tech
Value estimations for grid-tied photovoltaic systems prove solar panels are beneficial for utility companies and consumers alike.
Beyond the environmental benefits and lower electric bills, it turns out installing solar panels on your house actually benefits your whole community.
For years some utility companies have worried that solar panels drive up electric costs for people without panels. Joshua Pearce, Richard Witte Endowed Professor of Materials Science and Engineering and professor of electrical and computer engineering at Michigan Technological University, has shown the opposite is true — grid-tied solar photovoltaic (PV) owners are actually subsidizing their non-PV neighbors.
Cheburashka
Active Member
dlinkeg
Member
SMUD is also trying to significantly increase grid connect monthly charges. They are using propaganda techniques, claiming that rooftop solar owners are getting cheaper electricity, which is unfair to everyone else. WHAT? We paid thousands to add rooftop solar TO SAVE SMUD REGION CUSTOMERS FROM SIGNIFICANT INCREASES IN ELECTRICITY COSTS, BY PREVENTING THE NEED FOR PEAKER GENERATING PLANTS. We should be honored, not blamed!
The only comment I have regarding SDG&E is a profanity
Is Jerry Brown's sister still on the PUC? Gov. Newsom, please state where you stand on this issue before the recall election occurs so we know where you stand and vote accordingly.
Well, lets start with PG&E, which only covers about half of California. Its market cap is $22B, but if you are going to have a buyout, you might have to pay a 20-50% premium. Next there is the problem that it is currently losing $6.8B per year as a continuing business, and nearly all of its customers have had it with the company and would sign up with somebody, *anybody* else if they could. Lets not forget ongoing liability problems and a huge pile of maintenance backlog, and Oh! lest we omit, the tiny $42 B in debt attached to the company.
So, yes, lets do that. We solar advocates need to sign on to maybe a $80B expense to get our way. Who is with me? I'll chip in $80. I just need 1 billion more like minded Northern Californians to sign up too.
It's not a bad idea. Better would be just to replace them with a Public Utility District. For-profit is a poor model for utilities and you've done some good work in explaining why. When an improvement comes along they resist if there is no profit motive to acceptance.
None of Brown's sisters ever served as a CPUC Commissioner. Kathleen Brown is presumably who you are referring to (his other sisters weren't in government) - she served on the Los Angeles Board of Public Works in the 80s and was the State Treasurer from 1990-94.
As much as I like your idea, buying enough battery capacity to cut the cord is cost prohibitive. I'd need at least 3, maybe 4. Last I looked they are $8K each. In approximate numbers, it would take me 12 years of electricity bills before to recoup a $24K upfront investment. Oh, and that doesn't even count the panels.
The only reason to have a "true up" is for seasonality. Monthly is total hogwash. It blows my mind that corporate interests are able to propose (and *buy*) such garbage legislation.
KDGr
Member
Solar owner do pay their fair share. With PG&E net metering, for example, we pay monthly fees specified for transmission/infrastructure. No freebies here. This on top of everyone else's replies about how solar helps reduce the utilities' costs.
Thank you for posting, and for working in the underappreciated regulatory arena.
To help inform everyone in this debate, the CPUC could help greatly by doing a few things:
1) Get utilities to acknowledge the benefits of avoided transmission costs and potentially distribution system deferrals caused by solar built in communities. In any comparisons of the wholesale cost of solar to the retail feed-in tariff for solar, the avoided transmission & distribution grid costs need to be factored in too.
2) Publish a locational marginal value of solar, and all other conservation measures expressed in $/kW-yr. This should be required in each IRP, and should be included in decisions to procure conservation measures. If you can compute a locational marginal price, computing a locational marginal value of conservation should be a requirement.
3) If there is a cost shift to non-solar customers, get each utility to publish exactly what that value is. The web site supporting solar fees cited San Diego customers were paying $9.50/month. If that subsidy exists, it can be reduced by changing NEM. However, $9.50/month is significantly less than a $86/month solar fee.
4) In future rate design, perhaps all distribution and transmission costs should be included in the base monthly charge for residential, and should never be added to a per-kWh rate. That way the grid costs are paid by everyone regardless of usage. The base monthly charge becomes more like a residential demand charge, just with reasonable assumptions about limits, but with 0 intention to vary the demand charge with the attempt at reducing peak load. That's too hard for consumers to figure out, and TOU rates accomplish much of the same intent within their limits. The cure for bad rate design should be better rate design, not killing solar programs.
5) This cost shift argument will likely be used against behind-the-meter storage soon too. Get utilities to calculate a Demand Flexibility price; ie, imagine a resource that either reduces draw from the grid (or conversely shifts load) to the best time of day every day. This has to be at least as valuable as Demand Response, but utilities are struggling with valuing this appropriately. But someone's energy storage system is helping them become more resilient and can reduce emissions, while providing peak shaving benefits that accrue to the energy storage system owner, the distribution grid operator, and the transmission operator. These have to be quantified in a reviewed forum like an IRP.
It seems like the utility argument for solar fees is overstated but has some grain of truth to it. And it's easily fixable through rate design, if we have a locational marginal value of solar.
Full disclosure: I volunteered with the Sierra Club to help shut down a coal plant. Now I work on Demand Flexibility software - the FlexCharging smart charge app shifts EV load to lower retail electric costs for drivers, wholesale expenditures for utilities while also reducing the carbon emissions used to charge cars and avoiding renewable energy curtailment. I don't live in California, so I'm not sure I have "standing" to issue a public comment to the CPUC.
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https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page=1
https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page=2
https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page=3
https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page
This from Energy Sage Consulting:
NEM 3.0 Update No.1 March 17, 2021 What California’s next Net Metering policy might look like, and how it will affect solar projects and owners, from the experts at Sage Energy ConsultingExecutive Summary Net Energy Metering (NEM) in California will transition from the current scheme, called NEM 2.0, to a new scheme called NEM 3.0 sometime in mid-2022 for customers of the three regulated utilities, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDGE). NEM 3.0 is likely to result in a significant reduction in the value of energy produced by customer solar PV systems in these utility territories, which will add to the challenge facing the industry and its customers from the step-down in the federal solar tax credit. This week the utilities’ opening salvo was to ask the California Public Utilities Commission to reduce residential NEM credits to less than a quarter of their value today, and to charge hefty monthly fees for both residential and commercial customers. However, customers still have time lock in (grandfather) the current NEM 2.0 rules for 20 years for their solar PV projects, if they submit interconnection applications before NEM 3.0 is implemented in 2022. In this white paper, Sage Energy Consulting provides background on California’s NEM programs, and what we can expect to see in the upcoming NEM 3.0 transition. Throughout 2020 and 2021, we will continue a series of updates on NEM 3.0, which anyone can subscribe to at no cost here: Subscribe to Sage’s NEM UpdatesBackgroundNet Energy Metering (NEM), also called “Net Metering,” is the electric utility tariff that allows customers who have certain kinds of onsite electricity generation, such as solar PV panels, to export excess energy back to the utility grid and receive credit for those exports at current retail prices for electricity. NEM has existed in California since 1995 and has undergone various revisions over time. The most significant revision of NEM occurred in January 2016, when the California Public Utilities Commission (CPUC) created NEM 2.0, which was rolled out to utility customers in late 2016 and early 2017. Both NEM and NEM 2.0 customers are grandfathered on those tariffs for 20 years from the date that their solar PV system or other form of on-site generation first went into operation.From an electricity customer’s perspective, NEM 2.0 is essentially identical to the original NEM except that customers no longer receive bill credits for the “non-bypassable” rate tariff components on exported energy. Non-bypassable rate components are currently the Wildfire Fund Charge, Competition Transition Charge (CTC), Nuclear Decommissioning (ND), and Public Purpose Program (PPP) charges, which add up to approximately two cents a kilowatt-hour ($0.02/kWh). This change to NEM 2.0 reduced the value of exported energy by roughly 10-20% of exported energy value, depending on the customer’s rate tariff.
The NEM 2.0 decision was considered an interim solution by the CPUC, allowing the commissioners more time to study the impacts of NEM systems on electricity grids and other utility customers. As a part of the NEM 2.0 decision, the CPUC mandated that they would revisit the policy beginning in 2019 based on the outcome of impact studies and that a new tariff, NEM 3.0, would be created based on this information. There is considerable action on the Net Metering front across the country, with a number of states moving away from true net metering (for those that had it) to various forms of export compensation. One of the main issues at stake in California’s NEM 3.0 proceeding is whether people who have solar PV are receiving more value for it than they contribute to the grid as the utilities claim. Between cost of service, equity issues, and the fact that generation of electricity is getting cheaper, compensation for onsite, behind-the-meter energy generation is likely to decrease in real dollars over time. On the other hand, the cost of purchase and installation of solar-plus-storage systems is coming down faster than the decreasing value of the electricity they generate. Some other states have already dropped Net Metering, including Hawaii, Arizona, and Utah, which has significantly slowed adoption of solar PV for retail electricity customers in those states. At present it does not appear that any state is moving toward increasing the value of retail solar (Alabama, Tennessee, and South Dakota don't have any form of Net Metering nor export compensation, so they could conceivably improve the incentive to go solar if they adopted any form of export compensation.)NEM 3.0: Current TimelineThe CPUC resumed studying the effects of NEM on the electricity grid and customers in 2019, with the initial study completed in January 2021. Based on that and other information, the CPUC finalized the “Guiding Principles” of the NEM 3.0 tariff in February, and then opened the proceedings to proposal inputs from interested parties in March. The three investor-owned utilities have now filed a joint proposal to replace net metering with a tariff cutting residential solar to 23% of its value today; charge residential generators about $75 a month in fees; and charge commercial generators fees of $1,000-$3,400 a month for a 250- kW system, according to an initial analysis by the California Solar + Storage Association (CalSSA). Testimony and hearings on the NEM 3.0 proceeding are expected to be get underway by June, with a proposed decision due out in October. The commissioners would then be scheduled to adopt a final decision at their regular November 2021 meeting. Once they issue their final decision, utility companies are expected to implement it within 6 months. However, CPUC proceedings, especially those that are as contentious as this one, often run behind schedule. Sage believes that it is likely that the final decision in the NEM 3.0 proceeding will wind up being 2-3 months behind schedule, which would push back implementation by the utilities until late in Q2 of 2022.
Anticipated Structure and Impacts of NEM 3.0 It is still too early to know with any confidence what NEM 3.0 will look like and how it will impact current and future solar PV and other NEM customers. We do know from the NEM-2 proceeding in 2015-16 that the utilities and other interested parties such as environmental groups and consumer advocates will fight hard on the details. Following are the most important elements and what Sage believes will be considered.Solar PV Exported Energy RateFrom recent studies of PG&E, SCE, and SDG&E on the cost of energy and the value of solar PV, and from Sage’s own analyses, we have a reasonable idea of the value of solar during various time-of-use (TOU) periods under the current policy. Combining that information with the results of previous studies on the impacts of NEM 2.0 customers on utilities and non-NEM customers, we see that the value of solar PV energy in California is about 11 cents a kilowatt-hour (~$0.11/kWh), though it varies significantly between utilities and customer types. Sage is currently using this as the assumed weighted average value of solar PV energy production and export in our assumptions about NEM 3.0. This average energy value would apply to the tariff structures described below.Tariff StructureMany tariff structures are possible, but given the Guiding Principles put forward by CPUC staff, and the intent to strictly control the value of solar PV energy in California, we believe that either a Feed-In Tariff (FIT, also known as Buy All, Sell All), or Net Billing will be mandated. Feed-In Tariff (FIT)FITs, or buy-all, sell-all arrangements, separate the customer’s energy usage from the customer’s PV system energy generation. In this scenario, the customer’s PV system is connected in front (on the utility side) of their electric meter; the customer cannot consume the electricity produced by their PV system. All energy the customer consumes is metered at their retail tariff rate, and all generated electricity is exported to the grid through a separate meter and valued typically at a fixed price. This is not net energy metering. This type of interconnection and billing would not be easily applied to existing NEM interconnections with PV systems connected behind the customer’s utility meter on their property. It could, however, be mandated for future NEM 3.0 interconnections. Net BillingAnother possible form of the NEM 3.0 tariff is Net Billing. In this scenario, the PV system is connected on the customer side of the meter and offsets the customer’s electricity usage. Any exported energy from the PV system is valued at a fixed price. Net Billing arrangements typically settle up monthly, exported energy credits are shown and accounted for on each monthly billing statement. Customers would not be able to bank nor accumulate bill credits from exported energy and true up at the end of the billing year, as is done with annual NEM. Like a FIT, Net Billing is also not NEM, but is a likely candidate for the NEM 3.0 policy.
Impacts of NEM 3.0 on Solar PV Generated Energy ValueDepending on the final structure of the NEM 3.0 tariff, and the customer’s existing rates, NEM 3.0 could result in a mild to dramatic loss in solar PV energy value. For larger commercial customers that currently purchase energy at relatively low prices, an $0.11/kWh value of solar PV would not be much less than the value of solar on today’s commercial and industrial tariffs. However, smaller commercial customers and residential customers could see a loss in the value of the electricity they generate in the 20%-40% range or even much more, if the utilities get their way. This steep reduction in value will make it much more challenging for small solar PV systems to provide positive financial returns. And the monthly fees over time could add up to more than the cost of the systems themselves. Especially if the federal Investment Tax Credit (ITC) for solar PV systems steps down from 26% today to 10% for commercial customers and 0% for residential customers in 2024, as currently scheduled by Congress, solar PV systems could struggle to compete with utility energy prices in all customer classes. However, the fight in California has just begun. As CalSSA points out, “The law requires the CPUC to approve a tariff that maintains ‘sustainable growth’ in the solar market, and we intend to hold them to it.” What You Can Do•Plan to submit an interconnection application for upcoming solar PV projects BEFORE the NEM 3.0 deadline. If you are planning a NEM solar project in PG&E, SCE, or SDG&E territory in the next two years or so, you need to start planning to submit an interconnection application to secure NEM 2.0 for your project. Sage can develop and submit the interconnection package for you, or if you’ve already selected a solar project contractor they can develop and submit the application. If the project design is not fully developed at the time when the interconnection application is submitted, Sage recommends claiming a larger system size than you think is necessary on the application. You can reduce the system size later without having to resubmit the application, but you can’t increase it. •Stay informed. Sage will be providing regular updates as the NEM 3.0 proceeding advances. You can follow along via the CPUC’s official website (proceeding R2008020). You can also receive information about NEM 3.0 on CalSSA’s website at www.calssa.org/net-metering. •Get involved.If you know of others who are considering installing solar PV systems in the next year or two in PG&E, SCE, or SDG&E territory, pass this information along to them and let them know about the pending transition to NEM 3.0. And if you’re willing to write a letter, the California Public Utilities Commission accepts public comments online, in writing, and at certain public events. The main pro-solar advocacy groups are the Solar Energy Industries Association (SEIA), state operations such as the California Solar + Storage Association (CalSSA), the Smart Electric Power Alliance (SEPA), Vote Solar, Citizens for Responsible Energy Solutions, and the Environmental Law and Policy Center, among others. To receive further updates like this one on the progress of California’s NEM 3.0 policy — and how net metering affects solar owners and operators, and everyone considering going solar — sign up here.Subscribe to Sage’s NEM Updates
https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page=2
https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page=3
https://f.hubspotusercontent30.net/hubfs/6025232/NEM 3.0 update 2021-03-17 FINAL.pdf#page
This from Energy Sage Consulting:
NEM 3.0 Update No.1 March 17, 2021 What California’s next Net Metering policy might look like, and how it will affect solar projects and owners, from the experts at Sage Energy ConsultingExecutive Summary Net Energy Metering (NEM) in California will transition from the current scheme, called NEM 2.0, to a new scheme called NEM 3.0 sometime in mid-2022 for customers of the three regulated utilities, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDGE). NEM 3.0 is likely to result in a significant reduction in the value of energy produced by customer solar PV systems in these utility territories, which will add to the challenge facing the industry and its customers from the step-down in the federal solar tax credit. This week the utilities’ opening salvo was to ask the California Public Utilities Commission to reduce residential NEM credits to less than a quarter of their value today, and to charge hefty monthly fees for both residential and commercial customers. However, customers still have time lock in (grandfather) the current NEM 2.0 rules for 20 years for their solar PV projects, if they submit interconnection applications before NEM 3.0 is implemented in 2022. In this white paper, Sage Energy Consulting provides background on California’s NEM programs, and what we can expect to see in the upcoming NEM 3.0 transition. Throughout 2020 and 2021, we will continue a series of updates on NEM 3.0, which anyone can subscribe to at no cost here: Subscribe to Sage’s NEM UpdatesBackgroundNet Energy Metering (NEM), also called “Net Metering,” is the electric utility tariff that allows customers who have certain kinds of onsite electricity generation, such as solar PV panels, to export excess energy back to the utility grid and receive credit for those exports at current retail prices for electricity. NEM has existed in California since 1995 and has undergone various revisions over time. The most significant revision of NEM occurred in January 2016, when the California Public Utilities Commission (CPUC) created NEM 2.0, which was rolled out to utility customers in late 2016 and early 2017. Both NEM and NEM 2.0 customers are grandfathered on those tariffs for 20 years from the date that their solar PV system or other form of on-site generation first went into operation.From an electricity customer’s perspective, NEM 2.0 is essentially identical to the original NEM except that customers no longer receive bill credits for the “non-bypassable” rate tariff components on exported energy. Non-bypassable rate components are currently the Wildfire Fund Charge, Competition Transition Charge (CTC), Nuclear Decommissioning (ND), and Public Purpose Program (PPP) charges, which add up to approximately two cents a kilowatt-hour ($0.02/kWh). This change to NEM 2.0 reduced the value of exported energy by roughly 10-20% of exported energy value, depending on the customer’s rate tariff.
The NEM 2.0 decision was considered an interim solution by the CPUC, allowing the commissioners more time to study the impacts of NEM systems on electricity grids and other utility customers. As a part of the NEM 2.0 decision, the CPUC mandated that they would revisit the policy beginning in 2019 based on the outcome of impact studies and that a new tariff, NEM 3.0, would be created based on this information. There is considerable action on the Net Metering front across the country, with a number of states moving away from true net metering (for those that had it) to various forms of export compensation. One of the main issues at stake in California’s NEM 3.0 proceeding is whether people who have solar PV are receiving more value for it than they contribute to the grid as the utilities claim. Between cost of service, equity issues, and the fact that generation of electricity is getting cheaper, compensation for onsite, behind-the-meter energy generation is likely to decrease in real dollars over time. On the other hand, the cost of purchase and installation of solar-plus-storage systems is coming down faster than the decreasing value of the electricity they generate. Some other states have already dropped Net Metering, including Hawaii, Arizona, and Utah, which has significantly slowed adoption of solar PV for retail electricity customers in those states. At present it does not appear that any state is moving toward increasing the value of retail solar (Alabama, Tennessee, and South Dakota don't have any form of Net Metering nor export compensation, so they could conceivably improve the incentive to go solar if they adopted any form of export compensation.)NEM 3.0: Current TimelineThe CPUC resumed studying the effects of NEM on the electricity grid and customers in 2019, with the initial study completed in January 2021. Based on that and other information, the CPUC finalized the “Guiding Principles” of the NEM 3.0 tariff in February, and then opened the proceedings to proposal inputs from interested parties in March. The three investor-owned utilities have now filed a joint proposal to replace net metering with a tariff cutting residential solar to 23% of its value today; charge residential generators about $75 a month in fees; and charge commercial generators fees of $1,000-$3,400 a month for a 250- kW system, according to an initial analysis by the California Solar + Storage Association (CalSSA). Testimony and hearings on the NEM 3.0 proceeding are expected to be get underway by June, with a proposed decision due out in October. The commissioners would then be scheduled to adopt a final decision at their regular November 2021 meeting. Once they issue their final decision, utility companies are expected to implement it within 6 months. However, CPUC proceedings, especially those that are as contentious as this one, often run behind schedule. Sage believes that it is likely that the final decision in the NEM 3.0 proceeding will wind up being 2-3 months behind schedule, which would push back implementation by the utilities until late in Q2 of 2022.
Anticipated Structure and Impacts of NEM 3.0 It is still too early to know with any confidence what NEM 3.0 will look like and how it will impact current and future solar PV and other NEM customers. We do know from the NEM-2 proceeding in 2015-16 that the utilities and other interested parties such as environmental groups and consumer advocates will fight hard on the details. Following are the most important elements and what Sage believes will be considered.Solar PV Exported Energy RateFrom recent studies of PG&E, SCE, and SDG&E on the cost of energy and the value of solar PV, and from Sage’s own analyses, we have a reasonable idea of the value of solar during various time-of-use (TOU) periods under the current policy. Combining that information with the results of previous studies on the impacts of NEM 2.0 customers on utilities and non-NEM customers, we see that the value of solar PV energy in California is about 11 cents a kilowatt-hour (~$0.11/kWh), though it varies significantly between utilities and customer types. Sage is currently using this as the assumed weighted average value of solar PV energy production and export in our assumptions about NEM 3.0. This average energy value would apply to the tariff structures described below.Tariff StructureMany tariff structures are possible, but given the Guiding Principles put forward by CPUC staff, and the intent to strictly control the value of solar PV energy in California, we believe that either a Feed-In Tariff (FIT, also known as Buy All, Sell All), or Net Billing will be mandated. Feed-In Tariff (FIT)FITs, or buy-all, sell-all arrangements, separate the customer’s energy usage from the customer’s PV system energy generation. In this scenario, the customer’s PV system is connected in front (on the utility side) of their electric meter; the customer cannot consume the electricity produced by their PV system. All energy the customer consumes is metered at their retail tariff rate, and all generated electricity is exported to the grid through a separate meter and valued typically at a fixed price. This is not net energy metering. This type of interconnection and billing would not be easily applied to existing NEM interconnections with PV systems connected behind the customer’s utility meter on their property. It could, however, be mandated for future NEM 3.0 interconnections. Net BillingAnother possible form of the NEM 3.0 tariff is Net Billing. In this scenario, the PV system is connected on the customer side of the meter and offsets the customer’s electricity usage. Any exported energy from the PV system is valued at a fixed price. Net Billing arrangements typically settle up monthly, exported energy credits are shown and accounted for on each monthly billing statement. Customers would not be able to bank nor accumulate bill credits from exported energy and true up at the end of the billing year, as is done with annual NEM. Like a FIT, Net Billing is also not NEM, but is a likely candidate for the NEM 3.0 policy.
Impacts of NEM 3.0 on Solar PV Generated Energy ValueDepending on the final structure of the NEM 3.0 tariff, and the customer’s existing rates, NEM 3.0 could result in a mild to dramatic loss in solar PV energy value. For larger commercial customers that currently purchase energy at relatively low prices, an $0.11/kWh value of solar PV would not be much less than the value of solar on today’s commercial and industrial tariffs. However, smaller commercial customers and residential customers could see a loss in the value of the electricity they generate in the 20%-40% range or even much more, if the utilities get their way. This steep reduction in value will make it much more challenging for small solar PV systems to provide positive financial returns. And the monthly fees over time could add up to more than the cost of the systems themselves. Especially if the federal Investment Tax Credit (ITC) for solar PV systems steps down from 26% today to 10% for commercial customers and 0% for residential customers in 2024, as currently scheduled by Congress, solar PV systems could struggle to compete with utility energy prices in all customer classes. However, the fight in California has just begun. As CalSSA points out, “The law requires the CPUC to approve a tariff that maintains ‘sustainable growth’ in the solar market, and we intend to hold them to it.” What You Can Do•Plan to submit an interconnection application for upcoming solar PV projects BEFORE the NEM 3.0 deadline. If you are planning a NEM solar project in PG&E, SCE, or SDG&E territory in the next two years or so, you need to start planning to submit an interconnection application to secure NEM 2.0 for your project. Sage can develop and submit the interconnection package for you, or if you’ve already selected a solar project contractor they can develop and submit the application. If the project design is not fully developed at the time when the interconnection application is submitted, Sage recommends claiming a larger system size than you think is necessary on the application. You can reduce the system size later without having to resubmit the application, but you can’t increase it. •Stay informed. Sage will be providing regular updates as the NEM 3.0 proceeding advances. You can follow along via the CPUC’s official website (proceeding R2008020). You can also receive information about NEM 3.0 on CalSSA’s website at www.calssa.org/net-metering. •Get involved.If you know of others who are considering installing solar PV systems in the next year or two in PG&E, SCE, or SDG&E territory, pass this information along to them and let them know about the pending transition to NEM 3.0. And if you’re willing to write a letter, the California Public Utilities Commission accepts public comments online, in writing, and at certain public events. The main pro-solar advocacy groups are the Solar Energy Industries Association (SEIA), state operations such as the California Solar + Storage Association (CalSSA), the Smart Electric Power Alliance (SEPA), Vote Solar, Citizens for Responsible Energy Solutions, and the Environmental Law and Policy Center, among others. To receive further updates like this one on the progress of California’s NEM 3.0 policy — and how net metering affects solar owners and operators, and everyone considering going solar — sign up here.Subscribe to Sage’s NEM Updates
With credit to member msphor: Solar PV News
"I want to invite you to an online briefing to learn more about the gameplan to keep rooftop solar growing, and defend net metering from attack. The registration form will give you several dates to choose from. RSVP I will review what net metering is, why it is so important, the threat, our campaign plan, and how you can help. We'll leave plenty of time for questions, too. I hope you can make it! Thank you so much for all you do, -- Dave Rosenfeld, Executive Director"
"I want to invite you to an online briefing to learn more about the gameplan to keep rooftop solar growing, and defend net metering from attack. The registration form will give you several dates to choose from. RSVP I will review what net metering is, why it is so important, the threat, our campaign plan, and how you can help. We'll leave plenty of time for questions, too. I hope you can make it! Thank you so much for all you do, -- Dave Rosenfeld, Executive Director"
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