IMO, much better return getting more solar!. And if you need once in a while power outage, get a generator. One will save lots of money,
and hassles!!
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
CPUC NEM 3.0 discussion
- Thread starter jjrandorin
- Start date
and hassles!!
If you can get solar on NEM2, your ROI could be ~5 years. If NEM3 likely that ROI will be 10+ years depending on where it lands. No real ROI on batteries except for the comfort of never having a power outage just like there is no ROI on a Generator.
You say you are in Bay area peninsula - do you have AC?
Just to tweak what getakey is saying ...
First NEM 2.0... let's start with solar-only (the vast majority of NEM 2.0 customers are solar only). It's easiest to conceptualize that the "grid" is just one big solar battery. Any solar generation your home didn't immediately consume would be export to the grid and your neighbors would effectively use it instead. If you picture your PG&E meter as a piggy bank, when your solar energy passes through the meter then a deposit is made into the meter at the prevailing retail rate at that moment energy was exported.
This made it so the grid's utility scale generators would simply see your neighborhood demanding less energy. So these utility scale generators would produce at that time. When the sun set (or it was cloudy, etc), then the home with solar would need to take from the grid. Continuing my piggy bank example, when the homeowner took from the grid, money is extracted from the piggy bank at the prevailing retail rate at the moment energy was imported. Then PG&E would charge a separate fee (called a non-bypassable charge or NBC) for the privilege of having allowed that energy to come into the home. This fee was assessed outside of the piggy bank model.
So, if the "grid" is the solar battery, then adding your own battery on your house doesn't really accomplish much with respect to this NEM 2.0 thing. That is why under NEM 2.0 batteries do more harm than good to your normal ROI calc.
Now let's jump to NEM 3.0. Again let's start with the concept of solar-only. Right off the bat, you should know the CPUC wants to discourage solar-only installs under NEM 3.0. So if you're solar-only under NEM 3.0, expect to be rather unhappy with the outcome. Under NEM 3.0, the export rate for solar is now very small. So that piggy bank metaphor gets almost no value when energy passes through the meter. And of course, when energy comes back from the meter, it will still cost the homeowner the retail rate. Oh, and they're wanting to charge the homeowner a much higher monthly fee for having used the grid as a "battery."
Batteries have a potential huge benefit when compared to solar-only under NEM 3.0. HOWEVER, even with batteries, it is unlikely that the the combined solar+battery system will give the homeowner any ROI.
Think of it this way... for a "normal income" homeowner under NEM 3.0 in the PG&E area... Solar + Batteries will have a payback of about 10 years. And current residential battery technology has a 10 year expected useful life. So... yeah... not a terribly good ROI. But, if this same homeowner went with solar-only, their payback would be up to 15 years. And keep in mind that the cost (the I in ROI) assumed in these numbers is very low. Like much lower than what you could ever get an installer to bid for; and the vast majority of installs will likely far exceed these payback estimates.
First NEM 2.0... let's start with solar-only (the vast majority of NEM 2.0 customers are solar only). It's easiest to conceptualize that the "grid" is just one big solar battery. Any solar generation your home didn't immediately consume would be export to the grid and your neighbors would effectively use it instead. If you picture your PG&E meter as a piggy bank, when your solar energy passes through the meter then a deposit is made into the meter at the prevailing retail rate at that moment energy was exported.
This made it so the grid's utility scale generators would simply see your neighborhood demanding less energy. So these utility scale generators would produce at that time. When the sun set (or it was cloudy, etc), then the home with solar would need to take from the grid. Continuing my piggy bank example, when the homeowner took from the grid, money is extracted from the piggy bank at the prevailing retail rate at the moment energy was imported. Then PG&E would charge a separate fee (called a non-bypassable charge or NBC) for the privilege of having allowed that energy to come into the home. This fee was assessed outside of the piggy bank model.
So, if the "grid" is the solar battery, then adding your own battery on your house doesn't really accomplish much with respect to this NEM 2.0 thing. That is why under NEM 2.0 batteries do more harm than good to your normal ROI calc.
Now let's jump to NEM 3.0. Again let's start with the concept of solar-only. Right off the bat, you should know the CPUC wants to discourage solar-only installs under NEM 3.0. So if you're solar-only under NEM 3.0, expect to be rather unhappy with the outcome. Under NEM 3.0, the export rate for solar is now very small. So that piggy bank metaphor gets almost no value when energy passes through the meter. And of course, when energy comes back from the meter, it will still cost the homeowner the retail rate. Oh, and they're wanting to charge the homeowner a much higher monthly fee for having used the grid as a "battery."
Batteries have a potential huge benefit when compared to solar-only under NEM 3.0. HOWEVER, even with batteries, it is unlikely that the the combined solar+battery system will give the homeowner any ROI.
Think of it this way... for a "normal income" homeowner under NEM 3.0 in the PG&E area... Solar + Batteries will have a payback of about 10 years. And current residential battery technology has a 10 year expected useful life. So... yeah... not a terribly good ROI. But, if this same homeowner went with solar-only, their payback would be up to 15 years. And keep in mind that the cost (the I in ROI) assumed in these numbers is very low. Like much lower than what you could ever get an installer to bid for; and the vast majority of installs will likely far exceed these payback estimates.
Allow me to go down in flames once again on the fault with using this "ROI" concept, which in solar land means at what point is the system "free" to the adopter to the extent that total purchase price is paid off by that time with what would have been the actual payments to the utility.
Its needlessly complicated and I believe it was cooked up by solar sales guys. It sounds so great to say, "and it will pay for itself in X years."
The point is, especially with the utilities trying to add non bypassable monthly charges, that I believe its better to do this in the traditional financial way, that all you need to do is calclulate (a) your average bill, and (b) the monthly cost of your system by assuming you finance the system over 20 years (its warranty life) at whatever the rate is now (mine was 5%). You can either satisfy your monthly energy needs by buying it from source one, the utility, or by producing it yourself.
So (b) is less than (a). Every month, year in, year out. As rates rise, but your financial obligation does not, (b) actually becomes more of a monthly savings.
Its also easier to add in ESS. With my 16.32 and 3 powerwalls, I am at a savings of a bit more than $250 a month. I would save more per month without the ESS becuase LADWP does not have a brutal NEM calculation. For people trying to calculate rate arbitrage (where ESS saves super peak rates vs. the credit you get with solar only), I mean, life's too short, eh?
I am grandfathered in, but if I was a prospective buyer and they added the $8 per installed kw charge it would be a very, very small savings per month, maybe down to like $40?
And they could sop up that $40 by messing with the credit calculation.
No, with the proposals now being discussed there is no "rate of return" at all, and I did not see, although I could be wrong, an exception for solar plus ESS.
I am sure the solar industry knows this, which is why they will fight to the end. But this concept, incredibly now used by all the major players of "a reasonable ROI" measured in years, is driving me crazy.
The actual "ROI" is that my system produces X amount of electricity which I would normally have to pay Y dollars for at a cost of only Z dollars. The delta, since it is measured in dollars, then shows what is going on.
I paid $50K (rounded) for a system that produces about $3k per year in return (about $200-$250 ish a month, rounded) so my rate of return is 6%.
That's why people are adopting solar. Six percent is not bad.
If you drop the benefit down to $40 a month its down to like 1%. That's why ten years ago solar was not as popular.
OK, I will try to give up now.
PS, OK, F-me. Yes, the solar land "ROI" sort of works if you figure out the system you get is truly depreciable in that at some point it wears out. Yes, ok, that's relevant, to say, "you are buying a system that will be good for 20 years but will pay for itself in 5 years." See, that's not a lie but its why the sales people use it. In my system, maybe I have to replace the entire thing in 20 years, but so what, at that point you do the same calculation. Or, the system actually lasts for 25 years. Or, you just upgrade the panels only at a much cheaper cost than a new install. Time will tell.
Its needlessly complicated and I believe it was cooked up by solar sales guys. It sounds so great to say, "and it will pay for itself in X years."
The point is, especially with the utilities trying to add non bypassable monthly charges, that I believe its better to do this in the traditional financial way, that all you need to do is calclulate (a) your average bill, and (b) the monthly cost of your system by assuming you finance the system over 20 years (its warranty life) at whatever the rate is now (mine was 5%). You can either satisfy your monthly energy needs by buying it from source one, the utility, or by producing it yourself.
So (b) is less than (a). Every month, year in, year out. As rates rise, but your financial obligation does not, (b) actually becomes more of a monthly savings.
Its also easier to add in ESS. With my 16.32 and 3 powerwalls, I am at a savings of a bit more than $250 a month. I would save more per month without the ESS becuase LADWP does not have a brutal NEM calculation. For people trying to calculate rate arbitrage (where ESS saves super peak rates vs. the credit you get with solar only), I mean, life's too short, eh?
I am grandfathered in, but if I was a prospective buyer and they added the $8 per installed kw charge it would be a very, very small savings per month, maybe down to like $40?
And they could sop up that $40 by messing with the credit calculation.
No, with the proposals now being discussed there is no "rate of return" at all, and I did not see, although I could be wrong, an exception for solar plus ESS.
I am sure the solar industry knows this, which is why they will fight to the end. But this concept, incredibly now used by all the major players of "a reasonable ROI" measured in years, is driving me crazy.
The actual "ROI" is that my system produces X amount of electricity which I would normally have to pay Y dollars for at a cost of only Z dollars. The delta, since it is measured in dollars, then shows what is going on.
I paid $50K (rounded) for a system that produces about $3k per year in return (about $200-$250 ish a month, rounded) so my rate of return is 6%.
That's why people are adopting solar. Six percent is not bad.
If you drop the benefit down to $40 a month its down to like 1%. That's why ten years ago solar was not as popular.
OK, I will try to give up now.
PS, OK, F-me. Yes, the solar land "ROI" sort of works if you figure out the system you get is truly depreciable in that at some point it wears out. Yes, ok, that's relevant, to say, "you are buying a system that will be good for 20 years but will pay for itself in 5 years." See, that's not a lie but its why the sales people use it. In my system, maybe I have to replace the entire thing in 20 years, but so what, at that point you do the same calculation. Or, the system actually lasts for 25 years. Or, you just upgrade the panels only at a much cheaper cost than a new install. Time will tell.
Last edited:
I think I would take issue with that. You can rate arbitrage with batteries
You can rate arbitrage, but you can't rate arbitrage enough to pay back the batteries. So the ROI under NEM 2.0 is still unfavorable if you're trying to apply a financial payback calculator. Of course you all know I just hate PG&E, so my personal ROI for ESS is more intangible than it is financial.
Last edited:
I can't rate arbitrage with batteries, because LADWP is 1 to 1 to the extent you have credits, basically (the peak, nonpeak spread is only like 5%).
I have seen absolutely crazy non-peak v. peak rates on this board from other utilities, especially from SDG&E. It that case I would think batteries have a return.
Back on the NEM 3.0 topic... it looks like CALSSA is still trying to argue that a "solar only fixed cost fee" (the $8 per kWp AC per month) is illegal since it is discriminatory.
So you have CALSSA saying the only fixed cost rate that is legal is if it is a fixed cost that everyone is subject to equally (through volumetric pricing).
And you have the SEIA saying a gross consumption meter is not practical or legal since such a meter would also be illegal.
Since the CPUC seems to be grasping at ways to still get NEM 3.0 passed with a bunch of extra fees, maybe the CPUC will propose on a generation meter like what @wwhitney talked about in Austin, TX. But instead of the Austin model where currently solar generation is used to calculate value, the CPUC would just use this generation meter to assess some sort of solar fee. I'm sure CALSSA and SEIA will argue this is illegal as well lol.
So you have CALSSA saying the only fixed cost rate that is legal is if it is a fixed cost that everyone is subject to equally (through volumetric pricing).
And you have the SEIA saying a gross consumption meter is not practical or legal since such a meter would also be illegal.
Since the CPUC seems to be grasping at ways to still get NEM 3.0 passed with a bunch of extra fees, maybe the CPUC will propose on a generation meter like what @wwhitney talked about in Austin, TX. But instead of the Austin model where currently solar generation is used to calculate value, the CPUC would just use this generation meter to assess some sort of solar fee. I'm sure CALSSA and SEIA will argue this is illegal as well lol.
RKCRLR
Active Member
Who would pay for the permits and installation of meters on existing systems?
ok, yes ROI on a battery is very long, but compared to a generator it does provide a daily benefit.
stopcrazypp
Well-Known Member
That's the first I've heard there is some pushback on the fixed fee. Really, the solar side needs to make it super clear to everyone that such a fixed fee only makes sense if it applies to everyone (not just solar users), not let them distract and make out solar users as the bogeyman for problems with the rest of the grid.
The CALSSA has been arguing the "solar only NBC or fixed cost" is discriminatory for months. I don't think this is new for the CALSSA to rinse and repeat their "it's illegal" argument. The CPUC (CalAdvocates) and the IOUs already think a solar only NBC is legal.
But In response to CALSSA saying the $8/kWpAC/month is illegal, the IOUs were pushing for the gross consumption meter. This way the solar customer pays for using electricity just like a non-solar customer. SEIA say this isn't legal, but it's not really clear to me why they think it's illegal. Maybe it's a privacy thing? Or maybe it's just not practical? But I think there's a ton of precedent with PoCos going "behind the meter" with NGOMs, EVB, that stupid SmartAC program, and other wacky things.
The CPUC is going to get their fixed costs from the solar customers one way or another... I can't imagine a scenario where the CPUC just throws up its hands now and says "Whelp we tried! It looks like the NEM 3.0 solar folks will just pay less fixed costs since we all have volumetric pricing!".
Look out though, maybe the IOUs will next just recommend changing the one-time PTO fee from a few hundred bucks to something like $1,920 x the kWp AC of the registered facility (for residential only, since non-resi has its own policy). $8/month for 12 months over 20 years = $1,920. Basically capture that up front instead of over 20 years right at PTO. Edit: lol that'd make h2ofun's system have a 20 year lifetime fixed cost of $57,600. I think that would be more than what his system costs (after the ITC).
Is this any more or less discriminatory? Is it even legal? Who knows lol.
Last edited:
stopcrazypp
Well-Known Member
The gist I got was the gross consumption meter was on top of the fixed fee, not in lieu of it. I have not seen indication that CPUC has given up on the fixed fee, even though some people assumed they gave up on the fixed fee, given CPUC is currently asking about gross consumption and not discussing the fixed fee.
I just haven't heard recent news there is continual pressure on the fixed fee problem, so just glad to hear that issue is still being fought against.
Actually an upfront fee might be easier to deal with given they would be pushed to give the proposed MTC (market transition credit) upfront also. It also make it blatantly clear how much of an impact this has on ROI of home solar, while a monthly fee hides it by being a smaller number. Also, having the monthly fee basically makes it last forever and it'll only ever go up.
Last edited:
RKCRLR
Active Member
What makes a monthly connection charge for solar customers discriminatory is it isn't tied to direct costs associated to having a connection with solar. I do believe there are direct costs associated with the IOUs providing service to solar customers (infrastructure capacity, billing, etc.) but those costs are minimal compared to the $8/kW of solar they are proposing. And they aren't applying the costs of reduced demand from the IOUs equally.
Merrill
Merrill
When you are dealing with Pacific Graft and Extortion you know that they will get what they want given they are an uncontrolled monopoly.
You forgot to mention that this chart of ROI is from the IOUs so in real life, I think most people won't see this since they are pulling numbers out of of thin air.
I think this chart assumes cost at like $2.50/W or less or something which a LOT of people don't get/pay for. Most installs are at a much higher cost and did they even run numbers of what batteries cost? Probably wrongly priced so like statistics, anyone can make an ROI higher/lower than reality.
Not as quick as solar but there is an ROI because you can time shift up to all of your peak grid usage to off peak. If you have EV2A or something similar, peak grid cost of 45 cents vs off peak of 25 cents means I save about 18 cents (20 cents minus 10% for storage conversion) for every kw I use in my home during peak times. In the summer it's about $100 / month savings vs solar only with no powerwall.
Last edited:
yes, agree there is a payoff on Batteries on NEM2, but it is pretty long which is why I said "no real ROI". If you are thinking of adding batteries for an ROI reason there are better places to put your money. To me the PWs are for backup and any savings I get from arbitrage is gravy. It also depends on your system design. I added PWs to existing solar. My solar was designed to get me close to zero NEM. So although I could theoretically save ~900/year using rate arbitrage, I don't have that "room" on my annual NEM. I was ~$200 before PWs and now I can set PW reserves so I get to zero NEM. Even at $900/year, the ROI for my 3 PWs would be aa long time
BTW, I'm on EVA-1, so my peak is $.60/kWh
Oh yeah for sure. I've pointed out dozens of time that this stupid table in the NEM 3.0 PD is... stupid. CALSSA have argued all these costs (before incentives) have gone up a ton since the NEM 3.0 PD was drafted, and have asked the ROI calcs to be re-done.
It must be infuriating for the CPUC to tell the CALSSA that it's important for them to get their own costs down so they can deliver future PV+ESS installs at attractive levels to support future installs. If your costs aren't down to this level yet, it's on CALSSA to get the costs down! All while the CPUC lets the IOUs just add billions of more costs because they are a monopoly and entitled to out-of-control costs.
Personally, I'd just like to see their damn ROI model. I can't mimic anything remotely like what they claim when I try to model what my own experience would be with NEM 3.0PD instead of my NEM 2.0
Similar threads
- Locked
