CPUC NEM 3.0 discussion

[STS-134]

That would be fun, but it doesn't actually make PG&E lose money. It just increases their costs which it turn are reimbursed via future rate hikes. PG&E profits are guaranteed on their capital expenditures.

Good point, although does that apply to power they have to purchase from out of state? I thought it was only on capital projects of their own.

You mean Pacific Graft and Extortion.

Pacific Gouge & Extort

I like the sentiment.

But on what alternative universe is the spot price on CAISO ever, anywhere near what PG&E is charging retail? Let alone more than that. Ha!

I have seen real time prices go way over $500/MWh on the CAISO real time map. That's 50¢/kWh! One time I saw prices in the $700-900 range. It doesn't happen very often but I've seen it happen, typically on one of the hottest days of the year. If a power plant unexpectedly goes down, that seems to help. One time I saw the Day-Ahead pricing go over $500/MWh but there were unexpected clouds that kept the temperature down and the Real-Time prices collapsed the next day.

 

[Southpasfan]

Good point, although does that apply to power they have to purchase from out of state? I thought it was only on capital projects of their own.

Pacific Gouge & Extort

I have seen real time prices go way over $500/MWh on the CAISO real time map. That's 50¢/kWh! One time I saw prices in the $700-900 range. It doesn't happen very often but I've seen it happen, typically on one of the hottest days of the year. If a power plant unexpectedly goes down, that seems to help. One time I saw the Day-Ahead pricing go over $500/MWh but there were unexpected clouds that kept the temperature down and the Real-Time prices collapsed the next day.

Wow, I figured it was pretty hot today, and its only $100, with $150 projected for tomorrow. I have never seen $500 but I will take your word for it.

 

[getakey]

Wow, I figured it was pretty hot today, and its only $100, with $150 projected for tomorrow. I have never seen $500 but I will take your word for it.

I've seen $500 to $700

 

[ucmndd]

That's 50¢/kWh!

So still 10 cents less than my summer peak rate on EV-A

 

[holeydonut]

So still 10 cents less than my summer peak rate on EV-A

Lol yeah, some customers without solar are paying $0.60 per kWh during peak time because they signed up for EV2-A!

 

[Patrick66]

I'm pretty sure that the ROI of the PW is way longer than 10 years. The peak/off-peak rate spread on my rate plan is only about 13.5¢, for 3 hours per day, for 4 months of the year. For the other 8 months, it is only 4¢.

You are looking at it wrong; you need to compare the total system cost of energy-- utility cost per day vs PV/Battery cost per day, and then repeat that for every day of the year. Battery ends up eating a portion of the PV payback, but that doesn't make the battery negative payback. Reality is that batteries make larger PV systems economically viable.

 

[Dave EV]

SoCal Edison ads suggesting cranking the temp down to 72 early afternoon, then setting it at 78 degrees at 4 pm, don't cook dinner, or use other appliances until 9 pm. Yeah, sure that makes sense.

Yeah, what's crazy is that turning up the AC is the #1 thing to do there. Cooking isn't going to use more than a kWh or so unless you're doing a lot of cooking. And that assumes that you're using electricity to cook, too.

 

[skepticcyclist]

Yeah, what's crazy is that turning up the AC is the #1 thing to do there. Cooking isn't going to use more than a kWh or so unless you're doing a lot of cooking. And that assumes that you're using electricity to cook, too.

Especially considering that the overwhelming majority of homes on SCE area use gas for cooking, even though most of the rest of the country uses electricity (only about 30% use gas nationwide.) So it wouldn't make a difference anyway for most if and when they cook. In CA alone, over 60% still use gas, even higher in SCE area.

 

[sunwarriors]

Not sure if someone else posted this already, but NEM 3.0 summary so far on reddit:

https://www.reddit.com/r/solar/comments/ws2g4f

Sounds like Sep 29th is the new proposal expectation time frame.

 

[wwu123]

Good point, although does that apply to power they have to purchase from out of state? I thought it was only on capital projects of their own.

Pacific Gouge & Extort

I have seen real time prices go way over $500/MWh on the CAISO real time map. That's 50¢/kWh! One time I saw prices in the $700-900 range. It doesn't happen very often but I've seen it happen, typically on one of the hottest days of the year. If a power plant unexpectedly goes down, that seems to help. One time I saw the Day-Ahead pricing go over $500/MWh but there were unexpected clouds that kept the temperature down and the Real-Time prices collapsed the next day.

The other thing besides spot prices, that may be a bit more opaque, is whether there are payments to generators to ensure quick availability, whether or not those generators actually come online. I read that Texas is spending about a billion dollars this year in payments to ensure there are generators who are ready to rapidly come online within minutes with capacity, rather than relying on a complete market-driven spot price - but through most of this year the capacity wasn't needed. Maybe not even during the recent heat waves, either. More like buffer capacity, maybe in case a normal plant does suddenly go offline.

Those are real costs, and I don't know if California does it, and which entity pays the generators for it, and whether/how it reflects in spot prices. It was enough that some Texas legislators were complaining about the half-billion spent by mid-year. Inevitably it's the ratepayers that pay for it though, that much I'm 100% sure, even if nothing is generated and thus nothing is consumed. Though I calculated how much $1B was in terms of what all of Texas pays for electricity in a year, and it was tiny - I think like not even a fraction of an hour of a day's worth of consumption.

 

[holeydonut]

Not sure if someone else posted this already, but NEM 3.0 summary so far on reddit:

https://www.reddit.com/r/solar/comments/ws2g4f

Sounds like Sep 29th is the new proposal expectation time frame.

BTW there's no way a future homeowner installing solar sees the extra 4%. The installers are going to take that margin, they'll simply raise their prices 4% so the net impact to the homeowner is close to nil.

 

[cwied]

Those are real costs, and I don't know if California does it, and which entity pays the generators for it, and whether/how it reflects in spot prices.

I know California does it at least for demand reduction programs (paid by the utilities): E-4020. Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric are authorized to implement the Capacity Bidding Program (CBP) to replace the California Power Authority Demand Reserves Partnership.
I would be surprised if there isn't similar compensation for peak capacity on the generation side.

 

[sunwarriors]

BTW there's no way a future homeowner installing solar sees the extra 4%. The installers are going to take that margin, they'll simply raise their prices 4% so the net impact to the homeowner is close to nil.

This is pretty much the view by many with any tax credits in general. If the goverment cuts the gas tax, stations keep the $$ and don't cut nor cut as much, cut the EV rebates back for GM/Tesla, etc...They just raise prices by $7.5k, etc.

Mostly true and solar install prices seem to be going up already. Of course, if there is too much supply, then cars will starting sitting and companies will have to cut prices now (doesn't seem this is happening anytime soon).

 

[holeydonut]

This is pretty much the view by many with any tax credits in general. If the goverment cuts the gas tax, stations keep the $$ and don't cut nor cut as much, cut the EV rebates back for GM/Tesla, etc...They just raise prices by $7.5k, etc.

Mostly true and solar install prices seem to be going up already. Of course, if there is too much supply, then cars will starting sitting and companies will have to cut prices now (doesn't seem this is happening anytime soon).

I agree with you ... but PG&E, SCE, and SDG&E think differently. They just submitted a motion to bring the latest "Inflation Reduction Act" into scope for the NEM 3.0 proceeding. Basically they are challenging the CPUC to re-visit that economics model around expected payback under NEM 3.0 since consumers now get the extra ITC benefit.

Yes, the IOUs want tweaks to the NEM 3.0 economics to worsen the payback model that even @Redhill_qik probably cannot replicate with logical assumptions. Their claim is that the savings from the new law make Solar pay back too soon, so the pay back must be worsened.

So here's where I think the California solar industry has an issue. If solar installers increase prices to basically claim the tax credit for themselves (something every company does), then PG&E will argue the solar industry is greedy and not taking an opportunity to let the federal government subsidize more installs. So the solar industry will lose on efforts to pursue changes to the existing NEM 3.0 PD.

If solar installers keep prices the same and allow the full benefit of the increased ITC to end up with the buyers, then the buyers need to give this benefit to PG&E by way of worse NEM 3.0 economics compared to what we saw in the PD.

From the Joint IOUs:
"The Inflation Reduction Act, and more specifically, the extension of the 30 percent tax credit for both non-residential and residential solar projects, is directly relevant to the modeling of a successor net energy metering tariff in this proceeding. Importantly, the modeling assumptions for the net billing tariff proposed in the December 13, 2021 Proposed Decision of Administrative Law Judge Kelly A. Hymes take into account the then-existing tax credit (and phase out), providing only the 22 percent credit previously available in 2023.3 All else equal, a 30 percent tax credit (as compared to a 22 percent credit) reduces the cost of solar adoption, thereby reducing the payback period for customers benefitting from the tax credit. The more generous tax credits under the Inflation Reduction Act, therefore, have a direct impact on the modeling of the successor to the existing net energy metering tariffs."

Just for funsies, I went and got a quote for solar only this week. 4.38 kWp DC or 3.8 kWp AC. They want $23,356 BEFORE incentives. That is $5.33 per watt. I am not making this stuff up. No ESS... no special whatever... this is just the "take it or leave it" quote.

I keep posting this chart from the NEM 3.0 PD over and over, but remember the CPUC thinks solar is only $2.59 per watt BEFORE incentives. Something doesn't seem right here if installers charge $5.33 per watt to make their at-scale economics work, while the CPUC thinks it's less than half that value.

 

[DealMasterMike]

I agree with you ... but PG&E, SCE, and SDG&E think differently. They just submitted a motion to bring the latest "Inflation Reduction Act" into scope for the NEM 3.0 proceeding. Basically they are challenging the CPUC to re-visit that economics model around expected payback under NEM 3.0 since consumers now get the extra ITC benefit.

Yes, the IOUs want tweaks to the NEM 3.0 economics to worsen the payback model that even @Redhill_qik probably cannot replicate with logical assumptions. Their claim is that the savings from the new law make Solar pay back too soon, so the pay back must be worsened.

So here's where I think the California solar industry has an issue. If solar installers increase prices to basically claim the tax credit for themselves (something every company does), then PG&E will argue the solar industry is greedy and not taking an opportunity to let the federal government subsidize more installs. So the solar industry will lose on efforts to pursue changes to the existing NEM 3.0 PD.

If solar installers keep prices the same and allow the full benefit of the increased ITC to end up with the buyers, then the buyers need to give this benefit to PG&E by way of worse NEM 3.0 economics compared to what we saw in the PD.

From the Joint IOUs:
"The Inflation Reduction Act, and more specifically, the extension of the 30 percent tax credit for both non-residential and residential solar projects, is directly relevant to the modeling of a successor net energy metering tariff in this proceeding. Importantly, the modeling assumptions for the net billing tariff proposed in the December 13, 2021 Proposed Decision of Administrative Law Judge Kelly A. Hymes take into account the then-existing tax credit (and phase out), providing only the 22 percent credit previously available in 2023.3 All else equal, a 30 percent tax credit (as compared to a 22 percent credit) reduces the cost of solar adoption, thereby reducing the payback period for customers benefitting from the tax credit. The more generous tax credits under the Inflation Reduction Act, therefore, have a direct impact on the modeling of the successor to the existing net energy metering tariffs."

Just for funsies, I went and got a quote for solar only this week. 4.38 kWp DC or 3.8 kWp AC. They want $23,356 BEFORE incentives. That is $5.33 per watt. I am not making this stuff up. No ESS... no special whatever... this is just the "take it or leave it" quote.
View attachment 844384

I keep posting this chart from the NEM 3.0 PD over and over, but remember the CPUC thinks solar is only $2.59 per watt BEFORE incentives. Something doesn't seem right here if installers charge $5.33 per watt to make their at-scale economics work, while the CPUC thinks it's less than half that value.

View attachment 844383

Who is this quote through? Tesla solar is quoting me the following:

Total:$37,868
$19,368 for 7.2kW panels
$18,500 for 2 powerwalls
including installation excluding tax

 

[getakey]

This is pretty much the view by many with any tax credits in general. If the goverment cuts the gas tax, stations keep the $$ and don't cut nor cut as much, cut the EV rebates back for GM/Tesla, etc...They just raise prices by $7.5k, etc.

Mostly true and solar install prices seem to be going up already. Of course, if there is too much supply, then cars will starting sitting and companies will have to cut prices now (doesn't seem this is happening anytime soon).

The number of EVs that qualified for the $7500 tax credit before the new IRA was ~40. Now it is only 6 and about 13 as of 1/1/2023 when the cap is lifted for Tesla and GM

 

[aesculus]

The number of EVs that qualified for the $7500 tax credit before the new IRA was ~40. Now it is only 6 and about 13 as of 1/1/2023 when the cap is lifted for Tesla and GM

But some of that limit is related to the price caps (maybe this will incent EV sellers to keep prices down) and where the batteries are made (ie must be made in the US).

 

[charlesj]

Who is this quote through? Tesla solar is quoting me the following:

Total:$37,868
$19,368 for 7.2kW panels
$18,500 for 2 powerwalls
including installation excluding tax

Without hunting for my cost for 2 PW with install, I remember it was almost the same as your quote. That was back in late 2019 with a 2020 May installation.
I had solar already.

 

[aesculus]

Without hunting for my cost for 2 PW with install, I remember it was almost the same as your quote. That was back in late 2019 with a 2020 May installation.
I had solar already.

I checked mine (2 PWs) from late 2019 and it also was only $500 less. That's pretty good cost control, or us earlier adopters paid through the nose and the prices have actually gone down and then adjusted up for inflation.

 

[Dave EV]

Just for funsies, I went and got a quote for solar only this week. 4.38 kWp DC or 3.8 kWp AC. They want $23,356 BEFORE incentives. That is $5.33 per watt. I am not making this stuff up. No ESS... no special whatever... this is just the "take it or leave it" quote.

That's nuts. Tesla only charges $12k for a 4.8 kW system ($2.50 / watt). You can get a Powerwall added to that for a total of $23k.