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You must work for the solar industry. Just add a $7500 battery to make the payback time even longer? No thank you!Just add a battery
Just add a battery
I was talking with a neighbor that is in the process of getting solar installed (Tesla, 10KW Panels, 2 Powerwalls) with a tentative installation date of Feb 2024. He has run the numbers for his usage and operating as self-powered and has concluded that his payback will be at 8 years under NEM3.0 assuming a PG&E rate increase of 4%/year. I haven't seen his spreadsheet model, but this isn't that far off from when I did similar modeling for my system and usage under NEM3.0.Does anyone know the result of new home construction and NEM3.0? Not that CA has much new home construction, but I believe there was a blurb that it had to be financially worthwhile before solar can be installed or you can opt-out.
Since my opinion has been it's just not worthwhile anymore under NEM3.0, has anyone seen new homes/apartments without solar now?
When the backlog of NEM2.0 installs are done, I think there will be 80%+ job losses in CA due to this. Maybe when the laid off workers and economic impact spreads more, they will look to revise it again to something more middle of the road.
Actually, I can easily imagine that:Adding a battery was hard math even on NEM2.0 and I never thought or expected (or advised anyone) any ROI on NEM2.0 and folks are saying add a battery on NEM3.0 now? That's just silly goose territory (for ROI at least).
If you overpay for solar or if you undersize your system then you kill your payback period.
I was talking with a neighbor that is in the process of getting solar installed (Tesla, 10KW Panels, 2 Powerwalls) with a tentative installation date of Feb 2024. He has run the numbers for his usage and operating as self-powered and has concluded that his payback will be at 8 years under NEM3.0 assuming a PG&E rate increase of 4%/year. I haven't seen his spreadsheet model, but this isn't that far off from when I did similar modeling for my system and usage under NEM3.0.
There is a lot of doom-and-gloom with NEM3.0 and it absolutely is worse for the residential solar owner than NEM2.0, but most people neglect the fact that PG&E rates are very high and increase every year and simply reducing the amount that have to pay to import is a massive win. If you overpay for solar or if you undersize your system then you kill your payback period. If you get the right price (Tesla pricing works) and ensure that you have oversized the system then you do will payback the system plus you get off the PG&E rate escalator and as a bonus reduce the need for fossil fuels.
If you want to come back with time-value-of-money positions, first people made the same argument when we under NEM2.0, second I looked at this before and self-financing solar avoids that concerns and still returns a benefit.
4% appears to be way low for PG&E. They are asking the CPUC to approve a 22% rate hike and the CPUC countered with "only" a 12.2% rate hike.I was talking with a neighbor that is in the process of getting solar installed (Tesla, 10KW Panels, 2 Powerwalls) with a tentative installation date of Feb 2024. He has run the numbers for his usage and operating as self-powered and has concluded that his payback will be at 8 years under NEM3.0 assuming a PG&E rate increase of 4%/year. I haven't seen his spreadsheet model, but this isn't that far off from when I did similar modeling for my system and usage under NEM3.0.
The near $2/kW in the summer of 2020 and the pending ITC reduction from 26% to 22% (this didn't actually happen as Biden/Congress increased the credit) at the end of 2020 was what got me off the fence and into solar. I didn't know nearly enough about how NEM2.0 worked, but I knew that was a great deal, made the purchase and then started learning how to optimize with help primarily from this forum.I looked briefly at your modeling post and your price is insanely low during the 2020 covid/crash days of the economy. Your solar was only $2.18/W which is probably closer to the bottom of what most people paid here (more or less, I think some were sub $2 as well).
There was a big rush to get into solar when the ITC credit was in the sunset phase 2019 = 30%, 2020 = 26%, 2021 = 22%, 2022=0% (residential). A lot companies go into the business both large and small and it seems that a lot of those companies were horribly run and/or scams. They had a reprieve when the ITC didn't sunset and actually increased to 30%, but time has come to pay the price for bad/fraudulent business practices.I'm definitely more on the doom-and-gloom view of NEM3.0 crowd, but if the facts bear out that lots of solar installers are closing shop and we all see it, then I think that speaks more of the industry as a whole in this environment, especially in CA. We'll see this as the year/couple years play out. This points that the ROI can't be good if shops aren't getting installs anymore vs. 1 person running the numbers for their case which has a lot of varied factors/reasons.
Posts 2 and 3 were both based on Tesla August 2023 pricing at $3.17/KW pre-tax credit and not my lower pricing from 2020.Like that other poster who was seeing $3.75/W pricing not including batteries, how does the ROI look with much higher or rather, I'd say, more common install rates people are getting? Tesla doesn't install in every area as we all know.
Agreed that 4% is low, but that is what I recall him saying he used in his model and in the end that is a conservative number. I used 10% in my prior posts on NEM 3.0 payback modeling.4% appears to be way low for PG&E. They are asking the CPUC to approve a 22% rate hike and the CPUC countered with "only" a 12.2% rate hike.
PG&E asks California regulators to approve a 22% rate hike
Pacific Gas & Electric argued to California regulators Wednesday that it needed to hike rates by 22% to cover the cost of inflation and risk reduction projects.www.nbcbayarea.com
Please excuse the following rant. (The last I heard, NEM 3 is still being litigated, and I hope it gets stopped when objective 3rd parties review the facts. )Residential solar is getting crushed by high interest rates and regulatory changes
Many installers are filing for bankruptcy and stocks have crashed 15% to 30% or more based on weak guidance.pv-magazine-usa.com
"NEM 3.0 slashed compensation for delivering local, clean electricity generated by a rooftop solar array to your neighbors. Rates paid by the utility for exporting solar were cut by about 80%. Installations have pulled back by 40% to 80% in California following the decision."
"NEM 3.0 slashed compensation..."
So, the "rates paid" is, again, not what happened under NEM1&2. Those rates are only credited for energy returned to the grid. That same rate is paid for that same energy at the exact same time by non-solar customers.Rates paid by the utility for exporting solar
We are not in the generation business. Our only sin is needing less electricity from the utility, because we make out own.
Cut the wire to the grid. Problem solved
Does your description account for the different times that you are a net user of electricity or a net supplier of electricity. You generate solar during the day. Once you stop generating solar in the evening, you are using utility power. Seasonally, the utilities are getting energy from a lot of net daytime solar suppliers in the sunnier months, and then utilities turn around and provide energy to net users the rest of the year.Please excuse the following rant. (The last I heard, NEM 3 is still being litigated, and I hope it gets stopped when objective 3rd parties review the facts. )
"NEM3" is not Net Metering at all. Instead it treats residential solar customers' exports the same as wholesale suppliers' generation. We are not in the generation business. Our only sin is needing less electricity from the utility, because we make out own.
The NEM concept was to use the billing process to, in effect, turn the electric meter backwards for exports. But NEM never paid retail for exports that were not re-imported. While actually saving money for the utilities, this made solar much more affordable because it in effect lets us use our power all night and all year, averaging our our production 24/7/365.
But the utilities won the terminology war. Even PV Magazine has adopted the deceptive terms the utilities used to con the CPUC.
"Compensation"? Really? When you pay your credit card bill, is that "compensation" for the card company? No. Their compensation comes from the fees they charge the merchant. What you paid was the debt you owed, maybe plus some interest.
NEM credits you only for energy which you bought and paid for but then returned to their grid. You only get credit for what you already paid for and returned. If you are a net generator, exporting more than you import, the amount you are credited on the excess exports is only a fraction of the normal rate.
So, the "rates paid" is, again, not what happened under NEM1&2. Those rates are only credited for energy returned to the grid. That same rate is paid for that same energy at the exact same time by non-solar customers.
NEM was revenue neutral for the utilities, and saved them the cost of generation. NEM2 and NEM3 were scams run by the utilities on the CPUC. The utilities objective was to kill solar. Which was the jist of the linked article.
Isn't this a bad thing, though, because as I mentioned above, the attributed value of solar to the grid should be closer to its actual value. Averaging that solar supply in a non-real way artificially subsidizes solar users. Don't get me wrong, I love solar incentives, but maybe subsidizing solar isn't the job of the utilities. The legislature should make a decision on whether the state wants to subsidize solar. Seems to me the utility commission should be trying to match their pricing to reflect the actual value of the electricity supplied to the grid and treat solar like any other wholesale provider of electricity.it in effect lets us use our power all night and all year, averaging our our production 24/7/365.
Seems to me the utility commission should be trying to match their pricing to reflect the actual value of the electricity supplied to the grid and treat solar like any other wholesale provider of electricity.
Yes, I guess I just don't know enough about how all of those things are traditionally priced by utilities. But those things do all have value. I would think rooftop solar (as opposed to utility-scale solar plants) has one big advantage in that it reduces transmission requirements because power is being produced where the demand is. If there is accepted way to price things like resilience, they should be doing that too to give solar its fair due.Yes, but ...
Distributed solar has ancillary service, resilience, transmission and clean energy values. Bake the entire value into the wholesale price. This is of course a lot easier said than done because the values are in dispute. I personally think the simple and efficient approach is to implement a carbon tax since that is the lion's share of the value chain.
The issue of how to value distributed local solar has been extensively studied and, of course, still remains in contention. Utilities tend to undervalue it and push through various solar taxes and penalties.Yes, I guess I just don't know enough about how all of those things are traditionally priced by utilities. But those things do all have value. I would think rooftop solar (as opposed to utility-scale solar plants) has one big advantage in that it reduces transmission requirements because power is being produced where the demand is. If there is accepted way to price things like resilience, they should be doing that too to give solar its fair due.
For clean energy values generally, we might want to lean more towards installation subsidies. We already have the federal tax credit. We could also offer state and local tax incentives. NYC offers a rebate on real estate taxes spread out over 4 years. If direct legislative subsidies don't work as well, I guess they could do it by requiring some sort of direct carbon tax on utility bills and use the proceeds towards rooftop solar somehow.
I guess they could do it by requiring some sort of direct carbon tax on utility bills and use the proceeds towards rooftop solar somehow.