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CPUC NEM 3.0 discussion
- Thread starter jjrandorin
- Start date
7/18/23 - Notification from SCE: Application has been "Deemed valid", confirming eligibility for NEM 2.0.
Still no request from Tesla to schedule installation.
Emailed Tesla directly asking for an update on installation date. They responded with "We are still working on sourcing all the required equipment". I'm 99% certain this is because they spec'd in a Powerwall 3.
Utility Tax
As you all know, last year, the Legislature passed a new law: AB 205. This law requires the California Public Utilities Commission (CPUC) to add a Utility Tax to everyone’s electricity bill based on household income. Now, the utilities and some other organizations are proposing to charge all ratepayers the highest Utility Tax in the country: between $400 and $1,500 per year, depending on household income.
These proposals will INCREASE utility bills on millions of working and middle-class people who live in apartments and smaller homes that use lower-than-average electricity. They would also INCREASE utility bills on people who have invested in conservation, efficiency, and rooftop solar.
This Utility Tax is completely uncapped, with unlimited potential to grow. AB 205 was passed without any public hearings or ddiscussion. Now the CPUC is deciding how much the Utility Tax will be. They are expected to make a final decision by June 2024.
More than 50 groups have signed onto the Utility Tax Coalition. We are gaining momentum!!!
Utility Tax Coalition is not the official name of the Coalition. A name will be selected soon. BUT, you can check out the growing coalition here.
If you belong to an organization or know of an organization that would be interested in having a person present on the Utility Tax and how they can get involved, please get in touch with Cailey Underhill at [email protected]
Call your State Assemblymember and ask them to FIX THIS MESS!!!
Please call your state assembly member next week. The legislature is about to take its summer break, and why don't we give the Assemblymembers something to consider over their vacation?
Here's a short script for you to use when you call
Hello, my name is _____. I live in _____. I just learned that the legislature voted for a Utility Tax that will increase bills on millions of people living in apartments, condos, and small homes that don’t use much energy. This will also discourage all forms of energy conservation.
I am opposed to this Utility Tax. Since the legislature voted for this Utility Tax, I expect you to fix this mess. Please let me know your plan to stop this Utility Tax from happening. Thank you.
You can look up their phone number here
Next week I should have information to share regarding the Contractor's license board meeting on Thursday. Thank you to everyone who attended or called into the meeting to comment publicly. Thank you to everyone that took the time to write to the Contractors Board!
I hope you all have a great weekend!
As you all know, last year, the Legislature passed a new law: AB 205. This law requires the California Public Utilities Commission (CPUC) to add a Utility Tax to everyone’s electricity bill based on household income. Now, the utilities and some other organizations are proposing to charge all ratepayers the highest Utility Tax in the country: between $400 and $1,500 per year, depending on household income.
These proposals will INCREASE utility bills on millions of working and middle-class people who live in apartments and smaller homes that use lower-than-average electricity. They would also INCREASE utility bills on people who have invested in conservation, efficiency, and rooftop solar.
This Utility Tax is completely uncapped, with unlimited potential to grow. AB 205 was passed without any public hearings or ddiscussion. Now the CPUC is deciding how much the Utility Tax will be. They are expected to make a final decision by June 2024.
More than 50 groups have signed onto the Utility Tax Coalition. We are gaining momentum!!!
Utility Tax Coalition is not the official name of the Coalition. A name will be selected soon. BUT, you can check out the growing coalition here.
If you belong to an organization or know of an organization that would be interested in having a person present on the Utility Tax and how they can get involved, please get in touch with Cailey Underhill at [email protected]
Call your State Assemblymember and ask them to FIX THIS MESS!!!
Please call your state assembly member next week. The legislature is about to take its summer break, and why don't we give the Assemblymembers something to consider over their vacation?
Here's a short script for you to use when you call
Hello, my name is _____. I live in _____. I just learned that the legislature voted for a Utility Tax that will increase bills on millions of people living in apartments, condos, and small homes that don’t use much energy. This will also discourage all forms of energy conservation.
I am opposed to this Utility Tax. Since the legislature voted for this Utility Tax, I expect you to fix this mess. Please let me know your plan to stop this Utility Tax from happening. Thank you.
You can look up their phone number here
Next week I should have information to share regarding the Contractor's license board meeting on Thursday. Thank you to everyone who attended or called into the meeting to comment publicly. Thank you to everyone that took the time to write to the Contractors Board!
I hope you all have a great weekend!
I don't know which existing thread this could be in, but I am personally at a loss in terms of how to message NEM 3.0 to my neighbors (Northern California PG&E Zone X) and others who are just now trying to get PV+ESS on their homes. Some people simply couldn't afford to pull the trigger on this stuff last year so they're facing NEM 3.0 now.
I feel like the calculations/savings that some solar installers are showing do not really represent what a homeowner could expect. And, I'd like to avoid is having someone install solar, get ripped on their future bills, then think they made a mistake under NEM 3.0. Unfortunately, I personally do not have a reasonable way to simply communicate possible savings to somebody or challenge what the installers are proposing.
I was unable to model the NEM 3.0 proposal in a simple/communicable way to the extent I felt confident there was a reasonable ROI (PV + ESS). Most homeowners can't really digest some of the advanced math used on TMC lolol. I can't even digest simple math because I am (see my avatar).
For example, below is the "savings table" my neighbor received from a local California solar company. Their non-solar annual consumption last year was 14.5 MWh. So the proposed NEM 3.0 system is an Enphase 9.7 kW-DC PV + 15 kWh ESS. Net of the ITC the cost is supposed to be $36k*. The annual generation of this new system is supposed to be ~15 MWh. The home's heating is from two forced NG furnaces, so that's why the winter time electricity usage is pretty low.
Under NEM 2.0 and E-TOU-C, the math was pretty simple. Basically if the ESS could cover peak time usage, the home would probably be a net-zero NEM 2.0 home. So they would have nominal NBC, and true-ups were going to be minimal even if they ended up using some peak-time energy.
Under NEM 3.0, the installer is telling the homeowner in 2024 they would expect to save $5,018 and have a total annual electricity bill of $946. Assuming the annual net consumption/generation is a ~100% offset, I think the installer's proposed savings table shows a net differential of 7,338.59 kWh will pass to and from the meter and be affected by the NEM 3.0 electricity pricing variances (and NBCs). But this pricing differential between ACC export and retail import PLUS the NBCs is only $0.13 per kWh. Also, I have no clue what is going on in the August row where a ton of savings and NEM credits are obtained.
But more importantly for the ROI, when extrapolated with expected rising energy costs and the "glide path" period of the future NEM 3.0 ACC export rates, this installer claims the homeowner (net of the ITC) will break even in ~6 years. I don't see how a 6 year ROI is possible. The savings per month just seem obscene under this NEM 3.0 proposal. But maybe I'm wrong and NEM 3.0 during the glidepath is still a highly effective ROI proposition?
* Note: this quote excludes some other costs likely required (eg: like for like new main service panel) to complete the installation.
I feel like the calculations/savings that some solar installers are showing do not really represent what a homeowner could expect. And, I'd like to avoid is having someone install solar, get ripped on their future bills, then think they made a mistake under NEM 3.0. Unfortunately, I personally do not have a reasonable way to simply communicate possible savings to somebody or challenge what the installers are proposing.
I was unable to model the NEM 3.0 proposal in a simple/communicable way to the extent I felt confident there was a reasonable ROI (PV + ESS). Most homeowners can't really digest some of the advanced math used on TMC lolol. I can't even digest simple math because I am (see my avatar).
For example, below is the "savings table" my neighbor received from a local California solar company. Their non-solar annual consumption last year was 14.5 MWh. So the proposed NEM 3.0 system is an Enphase 9.7 kW-DC PV + 15 kWh ESS. Net of the ITC the cost is supposed to be $36k*. The annual generation of this new system is supposed to be ~15 MWh. The home's heating is from two forced NG furnaces, so that's why the winter time electricity usage is pretty low.
Under NEM 2.0 and E-TOU-C, the math was pretty simple. Basically if the ESS could cover peak time usage, the home would probably be a net-zero NEM 2.0 home. So they would have nominal NBC, and true-ups were going to be minimal even if they ended up using some peak-time energy.
Under NEM 3.0, the installer is telling the homeowner in 2024 they would expect to save $5,018 and have a total annual electricity bill of $946. Assuming the annual net consumption/generation is a ~100% offset, I think the installer's proposed savings table shows a net differential of 7,338.59 kWh will pass to and from the meter and be affected by the NEM 3.0 electricity pricing variances (and NBCs). But this pricing differential between ACC export and retail import PLUS the NBCs is only $0.13 per kWh. Also, I have no clue what is going on in the August row where a ton of savings and NEM credits are obtained.
But more importantly for the ROI, when extrapolated with expected rising energy costs and the "glide path" period of the future NEM 3.0 ACC export rates, this installer claims the homeowner (net of the ITC) will break even in ~6 years. I don't see how a 6 year ROI is possible. The savings per month just seem obscene under this NEM 3.0 proposal. But maybe I'm wrong and NEM 3.0 during the glidepath is still a highly effective ROI proposition?
* Note: this quote excludes some other costs likely required (eg: like for like new main service panel) to complete the installation.
The installer's projection is unrealistic. The savings rate per kwh seems high. It also appears to assume the batteries will last 25 years without issues or significant degradation with daily cycling. The battery warranty is only 15 years. I wouldn't be surprised if the actual payback period for the initial investment is around 10 years to be followed by battery replacement between years 10 and 20 thus wiping out most of the ROI. NEM3 is just bad.
Yeah, the toughest part to model is the glide-path of the export value not being the ACC rate out of the gate... but it would glide to that $0.04 perk kWh at noon eventually. Because then you're stuck trying to guess what time a home is exporting/importing and the spreadsheet gets out of control. I forget who it was (probably Vines) who said under NEM 3.0 there was potentially like 3,500 different energy rates that could be in play during a ROI calc due to the time of day, import vs export, seasonal rate schedules, and the glide path.
I tried to make a simple model, but ultimately I still felt that access to the hour by hour solar generation and hour by hour home energy usage was needed. But that type of model is not something that could reasonably/quickly be communicated with a prospective homeowner that isn't used to staring at spreadsheets.
Like, if a model can only be understood by @Redhill_qik (while he's in his well-lit hallway), then it's too complicated to explain NEM 3.0 to a normal homeowner heh.
Yeah, that's the point of this thread. I don't know how to (simply) explain the benefits of NEM 3.0; nor do I know how to reasonably calculate a ROI for someone. But I feel like installers have found ways to just monkey around with numbers and flash some really absurd projections.
The worst thing would be if someone spends a lot of money for solar + batteries, and actually out way worse than what PG&E would have charged them. Solar-only installs are basically out of the question now under NEM 3.0. Solar + Batteries is the only way to go, and even then I don't really know how to explain the benefits.
One way to flush out the smoke and mirrors might be to ask the installers to guarantee the savings, if the utility rates do not decrease.
I suspect a big chunk of the ROI improvement over straight solar is the ESS, which enable little or no peak power draw. And, yes, a 25 year battery lifetime needs at least a capacity depreciation, if not a 25 year write off.
I suspect a big chunk of the ROI improvement over straight solar is the ESS, which enable little or no peak power draw. And, yes, a 25 year battery lifetime needs at least a capacity depreciation, if not a 25 year write off.
The problem is a lot of calcs don't put a cost/value of $$. If someone put up $100k install and just puts in a massive array and max batteries or something, their "COST" some random solar seller could put is that you would have paid $$$$$$ for power, but now, with solar, you are paying $. They don't mention the capital outlay.
A bit unfair.
NEM3.0 math does not work and has never worked IMO. I keep saying that because long term, people move, laws change. Solar/ESS was already no ROI in 2.0 in my mind and people expect ROI on NEM3.0? Just don't bother I keep saying if they care that much about ROI.
As I keep posting whenever I see these messages on NEM3.0, we all need to wait to see what the monthly fee will be based on income first since that will make everyone pay a monthly nut, but power rates are SUPPOSED to go down in kind. Until we know that, I don't know how anyone can model stuff.
If I had $$ now and want to have resiliency, get solar/batteries for THAT piece alone. Don't do it for any form of ROI since that's all unpredictable with however the legislation will be/change/etc.
If someone had cash on the side, you're simply looking at solar/ESS as prepaying your power cost upfront with the added benefits of resiliency which I think will be worth more and more as freak weather is a yearly occurance.
A bit unfair.
NEM3.0 math does not work and has never worked IMO. I keep saying that because long term, people move, laws change. Solar/ESS was already no ROI in 2.0 in my mind and people expect ROI on NEM3.0? Just don't bother I keep saying if they care that much about ROI.
As I keep posting whenever I see these messages on NEM3.0, we all need to wait to see what the monthly fee will be based on income first since that will make everyone pay a monthly nut, but power rates are SUPPOSED to go down in kind. Until we know that, I don't know how anyone can model stuff.
If I had $$ now and want to have resiliency, get solar/batteries for THAT piece alone. Don't do it for any form of ROI since that's all unpredictable with however the legislation will be/change/etc.
If someone had cash on the side, you're simply looking at solar/ESS as prepaying your power cost upfront with the added benefits of resiliency which I think will be worth more and more as freak weather is a yearly occurance.
No installer is going to guarantee savings now under NEM 3.0 ... I don't even think Sunrun or Tesla will do that type of guarantee on a PPA now as they move away from solar leases and focus on making money on the installs again.
For the primary reason that others pointed out, Sunrun can still guarantee production on a PPA, but they cannot guarantee homeowner's costs since the time a home generates and time that home uses energy suddenly becomes exceptionally important under NEM 3.0. So it's likely homeowners won't see savings.
That's the purpose of this thread... many people still think going solar + battery is a way to get savings. Especially if they are hearing from NEM 1.0 and 2.0 homeowners about how great solar is. So the worst outcome is that someone pursues savings with NEM 3.0 and ends up paying more than they would have if they just kept buying electricity from PG&E.
And from a selfish standpoint, I don't want neighbors to get PV + ESS now then blame me for having wasted money... because I'm one of those annoying people that love to talk about how much PG&E sucks and how I think rooftop solar energy is great
You sure are a really nice neighbor, trying to go over all their math and stuff (making yourself somewhat culpable if it doesnt pan out the way they think it should or you say it should).
In 2015 when I got solar, my neighbor started asking me questions and I gave them very general answers and said they needed to figure out if it would work for them by looking into their own usage, etc. Note, I like my neighbor and get along with them. There is just NO CHANCE IN HECK I am going to be even semi responsible for any sort of decision they make like this.
Perhaps my lifetime of Customer service support / management has taught me that "if someone can divert responsibility / blame away from themselves and onto ANYONE else, in a customer service situation, they will probably try to do so, so dont insert yourself unless you want to take responsibility for their decisions".
Neighbor .. "how does this benefit me?"
You "let me help you understand the math"
= You, responsible, if they go forward with it.
I did an analysis about a year ago, done in my office not my hallway
, about a year ago and I found savings that matched with the NEM 3.0 payback period. This was base on my hourly data pre-solar and the PVwatts hourly data for my installed system and the numbers are the annual amounts that would be paid to PG&E (based on rates from last year).| Condition | E-TOU-C | E-TOU-D | EV2A |
|---|---|---|---|
| No PV, No ESS | $2,316.11 | $2,635.14 | $2,684.43 |
| PV only without NEM | $1,352.71 | $1,525.93 | $1,685.77 |
| PV only with NEM @ $0.05/kWh | $933.05 | $1,106.28 | $1,266.12 |
| PV+ESS without NEM | $1,004.86 | $1,144.33 | $1,139.04 |
| PV+ESS with NEM @ $0.05/kWh | $652.00 | $791.47 | $786.18 |
In 2020 my system cost $32,540 (8.16kW + two Powerwalls) when it was installed which would be $22,778 after the 30% tax credit with a savings of $1,664/year that pays off in 13.7 years with a NEM credit of $0.05/kWh
If it was PV only that would have been $17,800 or $12,460 after the 30% tax credit and with savings of $1,383/year ($2,316-$933) that would be paid off in 9.0 years which is coincidently the NEM 3.0 target pay off.
Does this work on an all electric house? meaning, folks who have gas heating have NO idea how much is used in the winter, even though we all know how little our solar produces.I did an analysis about a year ago, done in my office not my hallway
Condition E-TOU-C E-TOU-D EV2A No PV, No ESS $2,316.11 $2,635.14 $2,684.43 PV only without NEM $1,352.71 $1,525.93 $1,685.77 PV only with NEM @ $0.05/kWh $933.05 $1,106.28 $1,266.12 PV+ESS without NEM $1,004.86 $1,144.33 $1,139.04 PV+ESS with NEM @ $0.05/kWh $652.00 $791.47 $786.18
In 2020 my system cost $32,540 (8.16kW + two Powerwalls) when it was installed which would be $22,778 after the 30% tax credit with a savings of $1,664/year that pays off in 13.7 years with a NEM credit of $0.05/kWh
If it was PV only that would have been $17,800 or $12,460 after the 30% tax credit and with savings of $1,383/year ($2,316-$933) that would be paid off in 9.0 years which is coincidently the NEM 3.0 target pay off.
Do we have anyone with an all electric house with pre-solar hourly data? If I can get the data, I will redo the analysis.
I did an analysis about a year ago, done in my office not my hallway
Condition E-TOU-C E-TOU-D EV2A No PV, No ESS $2,316.11 $2,635.14 $2,684.43 PV only without NEM $1,352.71 $1,525.93 $1,685.77 PV only with NEM @ $0.05/kWh $933.05 $1,106.28 $1,266.12 PV+ESS without NEM $1,004.86 $1,144.33 $1,139.04 PV+ESS with NEM @ $0.05/kWh $652.00 $791.47 $786.18
In 2020 my system cost $32,540 (8.16kW + two Powerwalls) when it was installed which would be $22,778 after the 30% tax credit with a savings of $1,664/year that pays off in 13.7 years with a NEM credit of $0.05/kWh
If it was PV only that would have been $17,800 or $12,460 after the 30% tax credit and with savings of $1,383/year ($2,316-$933) that would be paid off in 9.0 years which is coincidently the NEM 3.0 target pay off.
What is the cost of capital you are using? The money you are spending on the solar+ESS could be earning money in a money market account, or investment in the stock market. So there is an opportunity cost that has to be considered in the calcs - a lot of people use 7% for these sorts of calcs, but with interest rates going up that may be on the low side.
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