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California Utilities Plan All Out War On Solar, Please Read And Help

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Here's the crazy thing - these fixed fees give the real possibility of a solar system losing money.

I shudder to think of how many people signed solar leases where they agreed to pay for the energy a solar system produces + some annual adder for 25 years - and now 15 years into their contract, it's quite possible they are in a situation where having solar no longer saves them money, but costs them money. People affected by this are very likely to be people who are least able to afford any increase in monthly costs.

Another example - a 5 kW solar system will incur a monthly $40 connection fee or $480 / year. In California, a well designed system will generate around 1500 kWh / year per kW of solar - so a 5 kW system will generate around 7500 kWh / year.

Let's say that your house doesn't use any energy while the sun is out and you export all the solar energy - at $0.05 / kWh, you will only generate $375 worth of energy - you will pay $105 MORE than if you didn't have any solar at all. Extreme example - but not necessarily all that crazy.

Another example - let's say your house uses 500W on average while the sun is out and you use 4380 kWh / year because of that and export the rest - 3120 kWh. The retail value of the energy you used directly is $0.25 / kWh or $1095 - the other 3120 kWh is worth $156 so you end up saving about $1251 / yr.

To get to a claimed 10 year break-even, that solar system can only cost $12,510. That's a system cost of about $2.50 / Watt. Besides Tesla - who else does that? Is that usage example typical? To get a 7-year payback - the system can only cost $8,757 - A Tesla system after the current federal tax incentive can get around there - but can anyone else?

If you add batteries - that doubles the cost of the system - but in Tesla's case you can only shift up to 13 kWh / day at a value of perhaps $0.20 / kWh. Over 10 years that's only $9,490 worth of time shifting assuming you can completely charge / discharge the battery every day and that you still have 13 kWh of capacity after 10 years. That is still a long ways from having a reasonable break-even point.

All that said - the biggest issue with these changes is the light switch they're turning off in a very short period of time. This is the type of that that needs to be scaled in over a 5 year time period - not months.
In some instances it will be close. I have 2 systems, after this passes, my older smaller system would save me at best $150 a year. If it was too stop working, I would not even bother trying to fix. It has less than ideal placement (west facing), with multiple bad panels. Its generating maybe 60% of its rated capacity. The big question is, will they even allow me to remove when it does die.
 
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In some instances it will be close. I have 2 systems, after this passes, my older smaller system would save me at best $150 a year. If it was too stop working, I would not even bother trying to fix. It has less than ideal placement (west facing), with multiple bad panels. Its generating maybe 60% of its rated capacity. The big question is, will they even allow me to remove when it does die.
That's a good question. Will they allow you to disconnect and stop paying?
Or, will they allow you to stop paying if you don't export any power to the grid?
 
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Reposting this link from Vines about some planned rallies at the SF and LA CPUC offices.

In case others want to join the rally at the CPUC headquarters RSVP to the CALSSA link: Save Our Solar Jobs Rally — CA Solar & Storage Association

I didn't even realize the CPUC had a physical presence? Those agencies never respond to phone calls or letters.
 
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Interesting waters for Tesla and their potential interest/disinterest in this whole CPUC mess. On one hand solar PV business would take a significant hit. On the other hand, this may accelerate their Powerwall sales/margins. For now, sales are constrained by supply.
 
Interesting waters for Tesla and their potential interest/disinterest in this whole CPUC mess. On one hand solar PV business would take a significant hit. On the other hand, this may accelerate their Powerwall sales/margins. For now, sales are constrained by supply.

Tesla has not even filed for party status on the NEM 3.0 proceeding. They've been silent throughout almost all the rulemaking procedures. To your point, they are simply playing the role of an arms dealer and stand the come away on top no matter how this shifts.

If NEM 3.0 is a boon to solar, then they have a solar business.

If NEM 3.0 craps all over residential solar-only, they've got a residential battery business. NEM 3.0 has a lot of language to explain why the future is PV+ESS and is encouraging such adoption.

If NEM 3.0 gives juice to non-resi installs, Tesla has a commercial powerpack business to sell to mega corps that have the investment money.

I think, the only time Tesla will jump into the fray is if it becomes obvious that the CPUC intends to charge ESS directly with a new and significant fixed cost fee for interconnect to the grid.
 
Interesting waters for Tesla and their potential interest/disinterest in this whole CPUC mess. On one hand solar PV business would take a significant hit. On the other hand, this may accelerate their Powerwall sales/margins. For now, sales are constrained by supply.

Announcement – Net Energy Metering 3.0


Date: Dec. 22, 2021



NEM 3.0 is a proposal under consideration at the California Public Utilities Commission (CPUC) that reduces the benefit of going solar for customers of PG&E, SCE and SDG&E.


Talking Points


  • If adopted, the proposal would apply to new customers that submit interconnection applications to add solar [by] May 2022. It would also apply to existing customers on NEM 1.0 or NEM 2.0 after their system has been in operation 15 years.
  • Exported energy would be credited at wholesale rates (approximately $0.04/kWh)
  • Residential solar customers on NEM 3.0 would be required to pay the utility a new fixed charge of $8/kW per month, regardless of energy used. This comes to roughly $50-$60 per month for an average size solar system.
  • This proposal is not final and can can change in response to public feedback. The public can express their opinion to the CPUC by taking these actions:
  • Weigh in with the CPUC by submitting a comment to the Public Advisors Office.
  • Sign up to provide a verbal comment directly to the five commissioners at the CPUC’s next public meeting on January 13.
  • Join the Solar Rights Alliance and find out all the ways you can act to protect rooftop solar in California.
  • Save Our Solar Rally – San Francisco (CPUC Building) and Los Angeles (Pershing Square) January 13 at 11 a.m.
  • Tesla is working with our partners in the solar and environmental community to urge the CPUC and Governor’s office to adopt a more reasonable approach that doesn’t punish solar customers.
 

Announcement – Net Energy Metering 3.0


Date: Dec. 22, 2021



NEM 3.0 is a proposal under consideration at the California Public Utilities Commission (CPUC) that reduces the benefit of going solar for customers of PG&E, SCE and SDG&E.


Talking Points


  • If adopted, the proposal would apply to new customers that submit interconnection applications to add solar [by] May 2022. It would also apply to existing customers on NEM 1.0 or NEM 2.0 after their system has been in operation 15 years.
  • Exported energy would be credited at wholesale rates (approximately $0.04/kWh)
  • Residential solar customers on NEM 3.0 would be required to pay the utility a new fixed charge of $8/kW per month, regardless of energy used. This comes to roughly $50-$60 per month for an average size solar system.
  • This proposal is not final and can can change in response to public feedback. The public can express their opinion to the CPUC by taking these actions:
  • Weigh in with the CPUC by submitting a comment to the Public Advisors Office.
  • Sign up to provide a verbal comment directly to the five commissioners at the CPUC’s next public meeting on January 13.
  • Join the Solar Rights Alliance and find out all the ways you can act to protect rooftop solar in California.
  • Save Our Solar Rally – San Francisco (CPUC Building) and Los Angeles (Pershing Square) January 13 at 11 a.m.
  • Tesla is working with our partners in the solar and environmental community to urge the CPUC and Governor’s office to adopt a more reasonable approach that doesn’t punish solar customers.
Good to see Tesla come down on this side.
 
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Hello Everyone
The Gov had a press conference today. The Sacramento Bee headline: Gavin Newsom seeks to reclaim California’s status as climate change leader in his budget. He commented on the CPUC NEM 3.0 proposal
From the Bee article: Newsom waded into one of the hottest environmental controversies facing the state, saying he wants the Public Utilities Commission to reconsider its plan to slash subsidies paid by PG&E Corp. and other major utilities to owners of rooftop solar panels who ship excess power to the electricity grid.
“We have work to do,” he said.
He suggested discussions are already underway to tweak the proposal. “Many parties, many conversations, lots of balls in the air,” he said.
The commission is scheduled to vote on the proposal Jan. 27. Solar power advocates have said the commission’s plan would cripple their industry.

Here is the link to the full Bee Article. If the article is behind a paywall see attached PDF file

Interesting comment but who knows what "work" will be done on the proposal. But putting pressure on the Gov is working. We have his attention. We need to keep the pressure on.
 
Does anyone know how this affects industrial solar? One of my clients has a proposal to build a 157.50kW DC (142.67 kW AC) to help offset his electrical use on his farm.

According to the proposal, the rate schedules with solar will be AG-B, AG-A1, B-1. The AG-B rate is subject to a $7.19/kW demand charge. I wonder if battery storage to smooth things out would make sense.
 
Does anyone know how this affects industrial solar? One of my clients has a proposal to build a 157.50kW DC (142.67 kW AC) to help offset his electrical use on his farm.

According to the proposal, the rate schedules with solar will be AG-B, AG-A1, B-1. The AG-B rate is subject to a $7.19/kW demand charge. I wonder if battery storage to smooth things out would make sense.
I would think with Ag use, he could time his irrigation, etc to minimize demand charges.
 
Elon now openly takes his position:
Elon Tweet.png

 
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Rooftop solar panels provide customers with low-cost energy that is clean and, when paired with a battery, can help customers cope with power outages.
Under current rules, the payback period is between 7-9 years, not 3-4 years. The proposed decision (PD) will increase that payback period to over 20 years and make rooftop solar panels unaffordable for just about all customers.
This case has morphed away from a NEM case (arguing over the value of NEM exports) and turned into a case of imposing discriminatory fixed charges on customers with rooftop solar panels. Such discriminatory charges are extremely rare across the US.
The cost shift argument, which undergirds the PD, is nothing but a red herring. The PD takes a “holier than thou” stance on cost shifts. The kind of rate design we have in California – volumetric recovery of all costs –is riven with cost shifts.
Large scale solar costs 3 cents/kWh but it has done little to lower the price of electricity to customers which is north of 25 cents/kWh.
The Bay Area is the digital capital of the world. CA is known for pushing the envelope on innovation, not for smothering innovation. The Golden State is the flag bearer for envisioning and creating the future. The PD, despite its talk of modernization, is a throwback in time.
Energy efficiency alone will not make a dent in either customer bills or decarbonization unless it is accompanied by rooftop solar panels. EE is considered a benefit– not a cost shift and not penalized by fixed charges. Why do that for rooftop solar?
CA has mandated solar panels on new homes. Since it has some of the highest electric rates in the US, customers find it unattractive to install heat pumps and drive electric cars. Once a customer has installed rooftop solar panels, these investments become affordable.
The fixed charges in the PD are so complex that an average customer will be deterred from even assessing the economics of rooftop solar and storage. It imposes fixed charges on existing solar customers after fifteen years. That’s without precedent.
120,000 Californians had written to Governor Newsom to preserve a future for the current incentives for rooftop solar, even before the PD was released. Three major newspapers in California have written editorials on it. The voice of the public has to be heard.
 
Hello Everyone
The Gov had a press conference today. The Sacramento Bee headline: Gavin Newsom seeks to reclaim California’s status as climate change leader in his budget. He commented on the CPUC NEM 3.0 proposal
From the Bee article: Newsom waded into one of the hottest environmental controversies facing the state, saying he wants the Public Utilities Commission to reconsider its plan to slash subsidies paid by PG&E Corp. and other major utilities to owners of rooftop solar panels who ship excess power to the electricity grid.
“We have work to do,” he said.
He suggested discussions are already underway to tweak the proposal. “Many parties, many conversations, lots of balls in the air,” he said.
The commission is scheduled to vote on the proposal Jan. 27. Solar power advocates have said the commission’s plan would cripple their industry.

Here is the link to the full Bee Article. If the article is behind a paywall see attached PDF file

Interesting comment but who knows what "work" will be done on the proposal. But putting pressure on the Gov is working. We have his attention. We need to keep the pressure on.

I really hope that
a) Governor Newsom understands that this can't happen, and
b) that he doesn't wade "into one of the hottest environmental controversies" too late.
 
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"Sendy said he’d like to see the $8/kW charge reduced or removed, or only placed on new solar customers who decide they do not want battery energy storage. “For solar to become the dominant energy source, we need to accept that storage is an essential piece,” said Sendy. He suggested the SGIP rebate, which lessens the cost of a battery, to be increased to $350/kW to encourage more storage."

"Another chilling possibility Sendy sees as a result of the proposed decision is its negative impact on the California mandate that requires solar on all new buildings. He said because of the very poor cost picture, builders would likely integrate a very small, maybe 2 kW, “token” system that keeps the building in compliance with law. These small systems would represent a lost opportunity for a state pursuing steep decarbonization goals."

 
"Another chilling possibility Sendy sees as a result of the proposed decision is its negative impact on the California mandate that requires solar on all new buildings. He said because of the very poor cost picture, builders would likely integrate a very small, maybe 2 kW, “token” system that keeps the building in compliance with law. These small systems would represent a lost opportunity for a state pursuing steep decarbonization goals."
Some back of the envelope analysis:

2 kW system = $16 / month in fixed fees or $192 / year.

In California, a relatively unshaded, south tilted system will generate about 3200 kWh / year. One facing east or west would generate around 2900 kWh / year. Let's use 3000 kWh as a round number (1500 kWh / year per kW of solar PV - run your own numbers using PVWatts).

Worst case you export all your solar for $0.05 / kWh - that's $150 / year. Maybe not crazy if you aren't home most of the day.

Now you're paying $42 / year just to have solar.

Maybe more realistic is that you have an average load of 500 W when the sun is out and 25% of your solar is self-consumed at a retail value of $0.25 / kWh. That's 750 kWh @ 0.25 / kWh = $188 / year - the other 75% / 2250 kWh is exported at a value of $112.50 for a total value of $300 / yr. Even Tesla, the least expensive solar at $2.30 / watt, this system would cost $4,600 - that's a 15 year ROI.

This is going to take the residential solar industry back 10 years when solar cost $6/watt after incentives.
 
Schwarzenegger: We Put Solar Panels on 1 Million Roofs in California. That Win Is Now Under Threat. Opinion | Schwarzenegger: We Put Solar Panels on 1 Million Roofs in California. That Win Is Now Under Threat.

But it would also include a new monthly “grid participation charge” that would average an estimated $57 a month for solar customers. People who power their homes with fossil fuels wouldn’t pay this. So let’s call it what it is: a solar tax.Moreover, the commission would cut credits to new solar customers (and some older ones) as much as 80 percent for the electricity they don’t use and send to the grid under the net metering program. Those credits in turn can lower their utility bills.

Mr. Newsom recently acknowledged that “we still have some work to do” on the plan. He and his commission must stand up to the monopolistic utilities and protect California’s solar power programs, for the state’s future and the planet’s.
 
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By Arnold Schwarzenegger, as printed in the New York Times.

Mr. Schwarzenegger is a former governor of California.

California has more rooftops with solar panels than any other state and continues to be a leader in new installations. But a proposal from the state’s public utility commission threatens that progress.

It should be stopped in its tracks.

When I was California’s governor, we set a goal in 2006 of putting solar panels on one million roofs across the state. Skeptics said it couldn’t be done, but with bipartisan support in the State Legislature, California met its goal in 2019.

The state now has 1.3 million solar rooftopsgenerating roughly 10,000 megawatts of electricity — enough to power three million homes. And more are being added every week. Roughly two-thirds of those rooftops are on houses and businesses; the rest are on government buildings.

But this hard-earned and vitally important accomplishment is now under threat. The California Public Utilities Commission is considering a plan that would make it too costly for many Californians to embrace solar power. A decision could come as soon as Jan. 27.

The plan is complicated and has some good features, like creating funds to encourage homeowners and businesses with solar to add batteries for storage and to help bring solar power to poor and polluted communities.

But it would also include a new monthly “grid participation charge” that would average an estimated $57 a month for solar customers. People who power their homes with fossil fuels wouldn’t pay this. So let’s call it what it is: a solar tax.

This solar tax would also apply to customers who invested in batteries to store that solar energy. Battery storage is critical for the transition to clean energy and grid resilience. But this tax will only discourage that progression.

Moreover, the commission would cut credits to new solar customers (and some older ones) as much as 80 percent for the electricity they don’t use and send to the grid under the net metering program. Those credits in turn can lower their utility bills.

Critics of these rooftop solar incentives — mostly investor-owned utilities — contend that net metering leads to higher electricity rates for California homeowners who can’t afford to install solar and for apartment dwellers by shifting the costs of operating and maintaining the power grid to them. They also contend that California needs to move from incentivizing solar to incentivizing battery storage.

California should do more to incentivize clean energy in lower-income areas. And the state should be promoting the installation of a million batteries to store the energy that the solar panels capture. That’s how we can truly democratize energy. But adding a tax and removing incentives will hurt the solar market, and making solar more expensive for everyone does nothing to help our most vulnerable.

California has been hit hard in recent years by the changing climate, with record droughts and catastrophic wildfires. That’s another reason this proposal makes no sense; we should be pulling out all the stops to slow global warming. California is already so far behind on meeting its 2030 climate goals that the state isn’t projected to hit them until 2063. And our 2050 goals? We are on track to reach them by 2111.

Now California is about to take a big step backward by setting up huge barriers for consumers to adopt solar power. Installing panels on roofs is one of the fastest ways to produce renewable energy. They can be installed without complicated permitting or land fights, and they produce immediate reductions in dirty and dangerous emissions.

Rooftop solar also helps protect open space by generating electricity in places that are already built up. Every home, apartment building, school, farm and business that installs solar panels makes the air cleaner, reduces the need for costly investments in the grid and helps communities keep the lights on in the face of wildfires and blackouts. It also gives people a sense of self-sufficiency and independence from the grid. Is it any surprise that the big utilities want to take that away?

PG&E and other utilities want us to rely on their grids. But how much can Californians really depend on them? In the case of PG&E, we are talking about a company that pleaded guilty to involuntary manslaughter in the deaths of 84 Californians because it failed to maintain a transmission line that ignited the deadly Camp fire in 2018.

This is just another case of the big guys — the investor-owned utilities — fighting for themselves and hurting people who have invested or want to invest in solar panels.

Incentives matter when creating a new energy infrastructure. In Nevada, for instance, the state’s rooftop solar adoption rate plummeted 47 percentin the year after the state’s public utilities commission made solar more expensive for consumers by adding higher fixed costs on net-metering customers and reducing the price paid to customers for the excess energy they generate. A public outcry compelled the Nevada Legislature to reverse the changes, and more people started started putting solar panels on their rooftops again. It’s common sense.



In areas of California outside the utility commission’s control, we have already seen what happens when policies ratchet up rooftop solar costs. When the Imperial Irrigation District in Imperial Valley abandoned net metering in July 2016, residential solar installations declined 88 percent over the next two years as measured by added megawatts. The Turlock Irrigation District ended net metering at the beginning of 2015; within two years, annual residential solar installations declined 74 percent. Sacramento, sadly, is about to see this happen too.



We can’t afford that kind of backsliding. Gov. Gavin Newsom can sustain the state’s record of environmental success and keep California forging ahead on a path to 100 percent clean energy. Although the utilities commission is independent of the governor, he appointed four of its five commissioners. What he says matters.



Mr. Newsom recently acknowledged that “we still have some work to do” on the plan. He and his commission must stand up to the monopolistic utilities and protect California’s solar power programs, for the state’s future and the planet’s.
 
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