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

[SageBrush]

People will not install solar because it will be too expensive so they will be forced to pay high utility rates for power rather than generate their own. It kills residential solar.

Correct. The ROI on solar is pretty damn bad now with NEM 3, so it won't be worth it for people to add solar, and they'll have to pay higher rates.

I'm not ready to write off residential solar in CA just yet.

For one, it will force the commercial installers to offer lower costs. I don't know the CA market well enough to say how much the installers can cut costs and profits, but the German experience says maybe. CA will have to streamline bureaucracy/permitting, and the installers will probably go through a consolidation.

Second, PV + battery may yet be profitable as battery costs come down and installation costs come down.

Third, this kills garden variety PV with net metering. It does not kill PV with smart time shifting.

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I'm not here to defend the CA utilities by any means, but we all should realize that in a state like CA the value of electricity during 10 - 3pm is only a small fraction of the value from about 5pm - 9pm. I think it is reasonable for the market to recognize those differences.

 

[cali8484]

I'm not ready to write off residential solar in CA just yet.

For one, it will force the commercial installers to offer lower costs. I don't know the CA market well enough to say how much the installers can cut costs and profits, but the German experience says maybe. CA will have to streamline bureaucracy/permitting, and the installers will probably go through a consolidation.

Second, PV + battery may yet be profitable as battery costs come down and installation costs come down.

Third, this kills garden variety PV with net metering. It does not kill PV with smart time shifting.

----
I'm not here to defend the CA utilities by any means, but we all should realize that in a state like CA the value of electricity during 10 - 3pm is only a small fraction of the value from about 5pm - 9pm. I think it is reasonable for the market to recognize those differences.

You have any past data/facts to substantiate any of the above? Based on what happened in Hawaii and Nevada the much more likely scenario is demand will drop drastically and many installers will go out of business. Even Tesla already announced pulling out of many regions including ones in California. The idea that people will just adopt solar+home batteries appears to be wishful thinking at best. Home battery adoption remains low even in Hawaii, probably the closest comparable to California in terms of lots of sun and high electricity cost, even after 5+ years since NEM was killed.

 

[h2ofun]

You have any past data/facts to substantiate any of the above? Based on what happened in Hawaii and Nevada the much more likely scenario is demand will drop drastically and many installers will go out of business. Even Tesla already announced pulling out of many regions including ones in California. The idea that people will just adopt solar+home batteries appears to be wishful thinking at best. Home battery adoption remains low even in Hawaii, probably the closest comparable to California in terms of lots of sun and high electricity cost, even after 5+ years since NEM was killed.

Batteries are just too expensive, and do not last long. I keep telling folks just get a whole house generator. Applies even more now in Calif with NEM3

 

[Tam]

This just makes no sense considering that California wants to minimize the use of fossil fuel, no gas cars sold by 2035 and every new home has to have some solar. It’s to bad that we cannot get rid of the 3 monopolies that run our grid.

It makes perfect sense for monopolistic utility companies.

It discourages competition from existing homeowners.

New homeowners builders are forced to include solar but new home solar are too small so new homeowners still have to pay the bill.

This will give them more time to disadvantage homeowners for another 12 years.

I am not sure if there’s any penalties for electric and natural gas companies that won't be 100% renewable energy by 2035.

 

[iPlug]

IMO, appropriate to considerably reduce payments for excess solar production sent to the grid during off-peak hours.

But export payments should not have been cut for peak hours, probably raised instead. That would encourage PV + battery storage which is where we need to go from here.

 

[frankvb]

IMO, appropriate to considerably reduce payments for excess solar production sent to the grid during off-peak hours.

That's already the case due to TOU rates. In summer e.g. rates here are around 60c per kWh from 4 to 9pm, and around 35c before 4pm.

The entire scheme is simply what happens if you allow capitalism to the extreme and not break up monopolies. CPUC while pretending the be independent are basically owned by the utilities.

What would make way more sense is to move the grid infrastructure to a (state-owned) not-for-profit company, and let utilities compete directly with each other, allowing anyone to choose their own energy provider.

 

[iPlug]

That's already the case due to TOU rates...

Please link to said rate plans if you have seen otherwise. I have never seen a TOU plan here in CA where export payments from homeowner to the grid during peak hours are greater than what they would charge you to import during the same peak hours.

NEM 3 as released yesterday is just off-peak "stick", but should come with peak "carrot" as well (compared to NEM 2).

 

[sorka]

I wonder what will happen to Tesla Virtual Power Plant rate for homeowners that currently get paid $2/kWh exported to the grid

Not sure but I'm still waiting for my $512 check for what I exported during the events.

 

[SageBrush]

Second, PV + battery may yet be profitable as battery costs come down and installation costs come down.

I looked up zip code 92154 in San Diego
Tesla sells 6.4 kW + 1 PW for $18k, which is $200 a month on a 10 year loan at 6% APR

Per PVWatts, that system will generate 900 kWh a month (20% incline, 145 degrees) on average, so the kWh cost is about 22¢ a kWh.
Not cheap, but I think considerably less than just sticking with the local utility. Californians, get your middle finger ready.

-- By the way,
A truly interesting side-effect of NEM 3.0 may turn out to be PV+EV, with the EV used for arbitrage.

Smart, adaptable people are going to profit handsomely here, and the transition to clean energy will benefit overall.

 

[sunwarriors]

I'm not ready to write off residential solar in CA just yet.

For one, it will force the commercial installers to offer lower costs. I don't know the CA market well enough to say how much the installers can cut costs and profits, but the German experience says maybe. CA will have to streamline bureaucracy/permitting, and the installers will probably go through a consolidation.

Second, PV + battery may yet be profitable as battery costs come down and installation costs come down.

Third, this kills garden variety PV with net metering. It does not kill PV with smart time shifting.

----
I'm not here to defend the CA utilities by any means, but we all should realize that in a state like CA the value of electricity during 10 - 3pm is only a small fraction of the value from about 5pm - 9pm. I think it is reasonable for the market to recognize those differences.

Commercial installers aren't going to lose $$ to get a job. Installation costs have actually gone up as well as batteries I've noticed this year. I see posts from folks from other countries (and I'd guess other states) and I really think those folks have no clue what the energy market is like in CA. Some guy posted from Australia that they paid like $0.12 - $0.14 / kWh and only get credit for like $0.08 or something so we should be happy in CA. Come to SDG&E land and you'll see $0.70 for tier 2 (I don't think many people without solar can actually be BELOW baseline, I know I wasn't without solar) and now, they want to credit you $0.08 or is it $0.04? I'm randomly guessing SDG&E's credit number, but when you see people with $800+/month bills (that Fresno person post), the rates in many parts of CA are unfanthomable to pretty much anyone outside. I think all the other non-IOUs have much much lower rates (Santa Clara, Palo Alto, parts of Sacramento I think) so why does PG&E cause fires, kill people, still charges more?

In San Diego, we pay the highest energy in the nation now (higher than Hawaii) and will probably be over $0.70/kWh summer peak (2nd tier) next year. There is a reason why solar has such high adoption. When a for profit IOU over charges for a drug (energy), folks want out and the drug dealer (IOUs) don't like it and will do anything in their power to keep things as is to continue to take advantage of their system.


The only real solution I feel is turn them all non-profit, municipality ran, etc...It's just not possible to have a for profit, shareholder owned energy company which are guaranteed profits and make profits purely from infrastructure projects to serve both climate, conservation (no way here), customers, shareholders, politicians (kick backs, campaign $$), etc... It's a losing model and why we don't have policies which makes sense.

The IOUs don't really make $$ from selling power to people, they make $$ from building out more infra. Why they want to build massive long transmission lines or massive batteriy stores. Why not let homeowners have that? Because that's no profits for them.

I read a few reddit posts since the vote and think with NEM3.0 terms, you either get a battery or maybe just don't bother. Glad it doesn't affect me for 19 years, but if I was deciding, I'd be hesitant to think there is ROI in 9 years that they claim. They claim $0.35 cost vs. $0.08 credit I think, but without solar/batteries, peak pricing is much wider in gap I think (it is in San Diego).

 

[sunwarriors]

It makes perfect sense for monopolistic utility companies.

It discourages competition from existing homeowners.

It's really this. The 3 big IOUs are really just corporate for profit companies. Not many businesses (drug dealers, any dealers) want more competition. Of course they don't want solar since it competes with them and cuts them out.

If our prices weren't so bad compared to everywhere else, solar wouldn't have taken off so much.

 

[bkp_duke]

The utilities are "evil" because they are only concerned about profits. (That is inherent in capitalism.)
Newsom is corrupt for taking money from them to do their bidding.

And the natural balance to this "evil" is competition. This problem doesn't exist if there is a free market that allows for competition. THAT is the underlying problem: government corruption that allows for effective monopolies.

Competition also breeds better service.

 

[dfwatt]

Nah, California will just continue raising the retail electric rates to so those folks who have an average $75 monthly bill today will soon be paying over $100+, thus continuing to encourage solar. (And the low income will receive greater subsidies.)

You really don't get the economics or the point behind the bill. The point behind the bill is to reduce the payback period of solar such that it no longer has any kind of incentive to the homeowner. In fact if you tax solar sufficiently you can readily create a situation of no pay back period. In other words that solar never pays for itself. In that context, why would anyone install Solar on their Roof? This eliminates the existential threat that a distributed grid represents to the big power monopolies. Rooftop solar is a disruptive technology in terms of the grid. It threatens to make traditional grid concepts obsolete. There are hundreds of billions of dollars at stake. That's enough money to get corrupt Politicians lined up behind your taxation plan that will eliminate the threat from the disruptive technology. That's what's happening. Wake up and smell the coffee. Money corrupts with absolute money corrupting absolutely meaning that all monopolies are inherently corrupting. All of this of course is the antithesis of any concept of the free market where the best idea and the most efficient production is supposed to win. That's not what power companies want.

 

[mspohr]

And the natural balance to this "evil" is competition. This problem doesn't exist if there is a free market that allows for competition. THAT is the underlying problem: government corruption that allows for effective monopolies.

Competition also breeds better service.

Utilities are natural monopolies. They have effected regulatory capture by bribing politicians.
Capitalism abhors the free market.

 

[bkp_duke]

Utilities are natural monopolies. They have effected regulatory capture by bribing politicians.
Capitalism abhors the free market.

So not true. First, for utilities you can decouple things like power producers and those companies that run the poles/wires. Texas has done this and has a VERY competitive utility landscape. Power producers are always competing against each other for customers (and Tesla just joined this group as a power producer through their VPP - more competition AND end users will get paid as power producers!).

Second, CRONY Capitalism is not traditional capitalism. One of the core functions of government in a democracy is to put in place mechanisms to prevent monopolies and corruption. With those in place, capitalism works great. Just look at your cell phone - LITERALLY, without capitalism it would not exist, because competition drove innovation that brought forth things like the smart phone.

 

[SageBrush]

In other words that solar never pays for itself. In that context, why would anyone install Solar on their Roof?

For the sake of argument, let's say the utility and home PV are the same cost today. That still could leave the following differences:

1. Reliable energy
2. Clean energy
3. Energy Independence
4. Predictable costs

 

[bkp_duke]

For the sake of argument, let's say the utility and home PV are the same cost today. That still could leave the following differences:

1. Reliable energy
2. Clean energy
3. Energy Independence
4. Predictable costs

Which is a small addressable market. Most consumers won't go solar unless there is a cost benefit associated.

 

[dfwatt]

For the sake of argument, let's say the utility and home PV are the same cost today. That still could leave the following differences:

1. Reliable energy
2. Clean energy
3. Energy Independence
4. Predictable costs

Yes all of those advantages that you list should still sway people in the direction of installing solar but if it has no payback period, research and much evidence suggests that it simply isn't going to happen. This was the experience in States where the utilities were successful in surcharging (taxing) home solar to the point where it simply didn't pay customers to install it.

The assumption that they're the same cost of course isn't really true, unless you've got your finger on the scale so to speak. A decent sized Solar System amortized over its lifetime which is at least 25 years vectors towards ~ 10-12 cents a kilowatt hour which is really a number almost all utility companies can't touch. So the evidence is that even without additional refinements and increased efficiency of solar it is now cheaper than most grid power. This is an unacceptable economic and technological reality to power companies who correctly see this as an existential threat - and they're not being paranoid. This is why they have gone after net meeting with a vengeance. You don't really think public utility companies are interested in the public interest do you?

 

[h2ofun]

For the sake of argument, let's say the utility and home PV are the same cost today. That still could leave the following differences:

1. Reliable energy
2. Clean energy
3. Energy Independence
4. Predictable costs

Even if this we true, you totally ignore the hassle factor! Things break. One has to spend time to try and get fixed, etc. The solar and batteries I have are a big hassle. I have to watch things all the time to see if working. If not, I have the hassle trying to get things fixed. If I had a choice, I would rather to have just paid PGE.

 

[dfwatt]

Even if this we true, you totally ignore the hassle factor! Things break. One has to spend time to try and get fixed, etc. The solar and batteries I have are a big hassle. I have to watch things all the time to see if working. If not, I have the hassle trying to get things fixed. If I had a choice, I would rather to have just paid PGE.

Sounds like you've had a bad experience. Outside of one lightning strike we've had no reliability issues with our solar. Pretty much just works. Who installed yours?