CPUC NEM 3.0 discussion

[mspohr]

what? Faster payoff with batteries? Would like to see that math. Batteries double the price. A 6 to 8 year pay off is a pipe dream

And as their use of power from the grid declines and they get paid for excess power, customers generally expect to have their new solar system paid off in six to eight years, according to the utilities commission. It's faster for installations that include battery storage.

My personal solar, hybrid inverter, battery systems (two houses) have paid for themselves in about 6 years.
I have net metering 1:1 with no TOU.
I installed 5 arrays ( 3 to 5 kW) over the past 9 years with LiFePO4 batteries (total 30 kWh).
I am an electrical engineer so I was able to do most of this with DIY so I kept the cost down. I was also able to get a good deal on the batteries (about $110/kWh).
Bottom line is I"ve spent $21k (after credits) and generated $26k in electricity. Free electricity for the foreseeable future. (about 20 MWh/year)
If my local utility provider (Liberty Utilities) changes to TOU I expect to be able to earn more.
I've also installed solar(4.3 kW)/battery(40 kWh) at my office building which, thanks to generous subsidies and grants will cost me nothing.

 

[getakey]

My personal solar, hybrid inverter, battery systems (two houses) have paid for themselves in about 6 years.
I have net metering 1:1 with no TOU.
I installed 5 arrays ( 3 to 5 kW) over the past 9 years with LiFePO4 batteries (total 30 kWh).
I am an electrical engineer so I was able to do most of this with DIY so I kept the cost down. I was also able to get a good deal on the batteries (about $110/kWh).
Bottom line is I"ve spent $21k (after credits) and generated $26k in electricity. Free electricity for the foreseeable future. (about 20 MWh/year)
If my local utility provider (Liberty Utilities) changes to TOU I expect to be able to earn more.
I've also installed solar(4.3 kW)/battery(40 kWh) at my office building which, thanks to generous subsidies and grants will cost me nothing.

I'm talking about pay back with NEM3. I cannot see how adding batteries will decrease the payback. I get it that batteries help, but they are expensive. I'm on NEM2 and my solar paidback in 5 years. I added batteries (4 years ago), but I won't see a payback on those for a long time. However, I bought the batteries for backup not payback

 

[sunwarriors]

I didn't think it would be economically feasible to form a municipal utility in California at this late stage. The main difference from a CCA is they would be responsible for not just generation, but also distribution/transmission (plus retail servicing/billing, but ignore that for now). Distribution/transmission is more than half the bill from PG&E, so how are they going to offset that?

When people talk about the local municipal utilities, the ones nearest me, Palo Alto and Santa Clara (city), they were formed more than 100 years ago as local grids. I researched a bit as best how they could provide inexpensive power a few years back, aside from having lower overhead and profit goals - in the beginning they had their own power plants, which gave them leverage over their own costs. But as the larger regional grids formed, and they connected to them - well, I could never find out, but I suspect because of their leverage at the time, they got long-term or even permanent sweetheart deals to connect to the regional grids - specifically the long-distance transmission lines. Enough leverage that they no longer needed to generate power locally, as they could build or source elsewhere and have it sent long-distance for cheap. AFAIK, Palo Alto shut down its last local power plants a while back, Santa Clara has some local gas plants but they source more (clean) power from afar.

The San Diego initiative is about buying back the local distribution lines within city boundaries from SDGE for $2+ billion, and own/maintain them. They assume a reasonable cost of $0.02/kwh over 30 years. But what about transmission? Surely they don't get a sweetheart deal on transmission lines from plants to connect to the regional grid (do they pay PG&E? CAISO? this is half their price/kwh) - so you can bet customers will pay as much, or more, than current CCA customers do. So rates won't be cheaper than a CCA, which have mostly ended up being only a penny cheaper than the big utilities (just cleaner power).

Otherwise they go back 100 years, and start building local power plants within city boundaries to control costs. Is there cheap land for wind/solar/batteries in San Diego? Or do they build a bunch of new gas-fired plants locally? So unless a municipality is in some rural area with extremely cheap and undeveloped land, I don't know they could economically build their own local utility now - I feel that ship sailed about 60 years ago....

What you state is generally true, and that's why the IOUs love the situation they are in and will continue to use the wording you are sharing that: "...it's not possible, unfeasible, will be more expensive..." you name it. Kicking them out will be expensive and like you say, might not be feasible. It should have been done when PG&E went BK, but we know how that went.

But if one were to extrapolate what the IOUs will continue to do with rates, fixed monthly charges, etc, where does it all end? I suppose we can all just suck it up and pay whatever they want. If that's $200 or $1k per month just because they can charge that, will everyone just do that and when will folks say, that's enough.


Sorta like that case of a homeowner in Palo Alto I think it was having to pay $300k-500k (I think the article said hundreds of thousands) to bring a transformer to his/her home, I think everyone here will just figure out a way to purely go off-grid at that point.

Doing anything large scale though is rife with conflict among neighbors. It's probably going to be impossible to get a lot of folks to agree on anything. Easier for new developments, but builders would rather use land for more homes. If it was just me or even my local town, it's probably easier to buy the smaller amount of transmission lines or storage/gas needed to power the small local area. No idea what folks use for power if there is no sun, maybe old/natural gas, but it'd be nice if there was some sort of quiet/clean/low maintenance generator type device for those situations, but I don't follow that closer nor have I seen anything future-tech enough.

 

[sunwarriors]

huge decline in new solar

What's happened since California cut home solar payments? Demand has plunged 80%

As rooftop solar projects have plummeted, about 17,000 workers could lose their jobs. Will this derail California's climate and clean energy goals?

calmatters.org

That chart of applications is interesting. I'm still waiting to see how it is after all the backlog is cleared and maybe installers here can chime in on that with:

1) It's all smoke and mirrors, things are great!

or

2) It's really bad, we're letting folks go and barely getting by.

 

[mspohr]

Looks like having a battery will be mandatory for solar to avoid high TOU charges and to take advantage of the high export rates.

Explaining and modeling California’s Net Billing Tariff (NEM 3.0)

Explaining the Net Billing Tariff including a brief explanation of NEM 3.0 and a walkthrough of how the charging and crediting process works.

aurorasolar.com

A battery will help maximize self consumption and also export when it is profitable.

 

[sunwarriors]

Just saw this video about Harmony Turbines. Not large at 400-500W per turbine, but if it can run all night, that's sorta useful assuming there's some wind when the sun isn't shining. During wild fires, wind is also very high/common. I'm sure a lot of these maybe vaporware though.

I am not an investor or anything/anyone to this company and I am not endorsing them, but I'm always interested in some different stuff when the sun isn't shining.

Harmony Turbines

Harmony Turbines

harmonyturbines.com

I found it on Matt's channel:
202: Wind Turbines for Homes - A New Approach

 

[Ampster]

.......and to take advantage of the high export rates.

As few and far between that those rates are whatever battey system one would be using, it would have to have fairly flexible programming to take advantage of thosE few times that the export rate is high enough to be worthwhile. I am curious if the VPP rates are the close to the same?

 

[Redhill_qik]

As few and far between that those rates are whatever battey system one would be using, it would have to have fairly flexible programming to take advantage of thosE few times that the export rate is high enough to be worthwhile. I am curious if the VPP rates are the close to the same?

In California, the current VPP payment is that you get the regular grid export compensation based on your tariff plan and NEM status and in addition you get $2.00/kWh for the additional kWh your Powerwall/battery discharges during the VPP event versus the average discharge during the same hours for the 10 day (4 day if weekend) baseline period before the VPP event.

 

[MountainRatMat]

My personal solar, hybrid inverter, battery systems (two houses) have paid for themselves in about 6 years.
I have net metering 1:1 with no TOU.
I installed 5 arrays ( 3 to 5 kW) over the past 9 years with LiFePO4 batteries (total 30 kWh).
I am an electrical engineer so I was able to do most of this with DIY so I kept the cost down. I was also able to get a good deal on the batteries (about $110/kWh).
Bottom line is I"ve spent $21k (after credits) and generated $26k in electricity. Free electricity for the foreseeable future. (about 20 MWh/year)
If my local utility provider (Liberty Utilities) changes to TOU I expect to be able to earn more.
I've also installed solar(4.3 kW)/battery(40 kWh) at my office building which, thanks to generous subsidies and grants will cost me nothing.

I gave a thumbs down to this because with NEM3.0 it is impossible to get net metering 1:1 with no TOU.

Would love to see the numbers if you ran them with NEM3.0 rates though. I would guess it would be 20+ years payback with your EE knowledge. That only means for a standard installation by a solar company it is even worse and not worth pursuing solar which is where I ended up.

 

[mspohr]

I gave a thumbs down to this because with NEM3.0 it is impossible to get net metering 1:1 with no TOU.

Would love to see the numbers if you ran them with NEM3.0 rates though. I would guess it would be 20+ years payback with your EE knowledge. That only means for a standard installation by a solar company it is even worse and not worth pursuing solar which is where I ended up.

Yes, NEM3 makes payback calculations much more complicated (and less reliable).
Fortunately, lots of people have done the math:
Here's one:

What is NEM 3.0 and How Will it Impact California Solar Owners in 2024?

California utilities have approved Net Energy Metering (NEM) 3.0, substantially altering the energy savings of going solar.

www.solar.com

Scenario 1: Cash purchase of an average 7.6 kW system with 100% offset​

	SOLAR UNDER NEM 2.0	SOLAR UNDER NEM 3.0
Monthly energy bill (previously $250)	$18	$96
Payback period	4.6 years	6.5 years
Lifetime savings	$116,680	$73,620

Scenario 2: 12-year loan for an average 7.6 kW system with 100% offset​

	SOLAR UNDER NEM 2.0	SOLAR UNDER NEM 3.0
Monthly energy bill (previously $250)	$162	$239
Down payment	$0	$0
Lifetime Savings	$110,308	$67,248

Scenario 2: 20-year loan for an average 7.6 kW system with 100% offset​

	SOLAR UNDER NEM 2.0	SOLAR UNDER NEM 3.0
Monthly energy bill (previously $250)	$123	$200
Down payment	$0	$0
Lifetime Savings	$105,844	$62,784

While the lifetime savings can be substantially lower for solar-only systems under NEM 3.0 billing, it’s worth noting that $60,000 to $75,000 is still among the best — if not the best — return on investments for home solar in the US.

Here's more models:

Electrum’s New NEM 3.0 Savings Calculations Show Path to Maximum Bill Reduction in California

Electrum's new battery discharge calculations provide the industry's most accurate -- and hopeful -- picture of bill savings under NEM 3.0.

www.solar.com

Explaining and modeling California’s Net Billing Tariff (NEM 3.0)

Explaining the Net Billing Tariff including a brief explanation of NEM 3.0 and a walkthrough of how the charging and crediting process works.

aurorasolar.com

 

[DP26]

All these calculations are worthless. They need to be redone once the monthly fee is live. Until then, only a fool would install. In the big three utilities.

 

[sunwarriors]

Yes, NEM3 makes payback calculations much more complicated (and less reliable).
Fortunately, lots of people have done the math:
Here's one:

What is NEM 3.0 and How Will it Impact California Solar Owners in 2024?

California utilities have approved Net Energy Metering (NEM) 3.0, substantially altering the energy savings of going solar.

www.solar.com

Scenario 1: Cash purchase of an average 7.6 kW system with 100% offset​

	SOLAR UNDER NEM 2.0	SOLAR UNDER NEM 3.0
Monthly energy bill (previously $250)	$18	$96
Payback period	4.6 years	6.5 years
Lifetime savings	$116,680	$73,620

Scenario 2: 12-year loan for an average 7.6 kW system with 100% offset​

	SOLAR UNDER NEM 2.0	SOLAR UNDER NEM 3.0
Monthly energy bill (previously $250)	$162	$239
Down payment	$0	$0
Lifetime Savings	$110,308	$67,248

Scenario 2: 20-year loan for an average 7.6 kW system with 100% offset​

	SOLAR UNDER NEM 2.0	SOLAR UNDER NEM 3.0
Monthly energy bill (previously $250)	$123	$200
Down payment	$0	$0
Lifetime Savings	$105,844	$62,784

While the lifetime savings can be substantially lower for solar-only systems under NEM 3.0 billing, it’s worth noting that $60,000 to $75,000 is still among the best — if not the best — return on investments for home solar in the US.

Here's more models:

Electrum’s New NEM 3.0 Savings Calculations Show Path to Maximum Bill Reduction in California

Electrum's new battery discharge calculations provide the industry's most accurate -- and hopeful -- picture of bill savings under NEM 3.0.

www.solar.com

Explaining and modeling California’s Net Billing Tariff (NEM 3.0)

Explaining the Net Billing Tariff including a brief explanation of NEM 3.0 and a walkthrough of how the charging and crediting process works.

aurorasolar.com

It's be nicer to see a non-solar biased sites/numbers with these studies. Clearly, a site called solar.com or aurorasolar.com is trying to sell solar as that's their livelihood. I generally find it hard to believe payback is 6.5 years for NEM3.0, but that's just me. What was the $/W cost? There is too much noise in that main solar.com link, but my gut feeling is generally not buying it (maybe I am choosing to be a doubter).

There is also nothing preventing further rate hikes in the future nor new legislation raising fixed fees. I agree that everyone should probably wait/hold on installs until the income based thing is sorted out or actually repealed. If they cut rates by 33%, and raise monthly's by income to $120/month (I think that's around the SDG&E #), all the calculations are worthless. Also, I think I saw some articles which don't allow credits to bypass transmission costs now so you can have tons credits on the generation side, but you're still stuck not being able to lower your transmission side so everyone's rates goes up even with solar.

One can easily dump more $$ on an install and lower a monthly bill, but folks were already having trouble getting batteries on NEM2.0 I remember. Normal income folks aren't going to easily have $15k-$25k to dump for storage when you still barely see wide deployment of them compared to what's out there.

 

[getakey]

ok, I was skeptical, but just did a high level calc using my own production over the last year. I have my monthly production and got my monthly excess from my B&W bill. From this I can calc my monthly solar usage. Using TOU-D rates (did not realize Off Peak is now $.45/kWh and $.46/kWh in the winter) and excess at $.06/jkWh, my NEM3 payback would be 7 years. Slightly less as I did not use the Peak rate at all since its only 3 hours per day. I got my panels 5.5 years ago and my payback was just under 5 years. If I use current rates and NEM2, my payback would be under 4 years. So those calcs above look pretty close.

 

[mspohr]

It's be nicer to see a non-solar biased sites/numbers with these studies. Clearly, a site called solar.com or aurorasolar.com is trying to sell solar as that's their livelihood. I generally find it hard to believe payback is 6.5 years for NEM3.0, but that's just me. What was the $/W cost? There is too much noise in that main solar.com link, but my gut feeling is generally not buying it (maybe I am choosing to be a doubter).

There is also nothing preventing further rate hikes in the future nor new legislation raising fixed fees. I agree that everyone should probably wait/hold on installs until the income based thing is sorted out or actually repealed. If they cut rates by 33%, and raise monthly's by income to $120/month (I think that's around the SDG&E #), all the calculations are worthless. Also, I think I saw some articles which don't allow credits to bypass transmission costs now so you can have tons credits on the generation side, but you're still stuck not being able to lower your transmission side so everyone's rates goes up even with solar.

One can easily dump more $$ on an install and lower a monthly bill, but folks were already having trouble getting batteries on NEM2.0 I remember. Normal income folks aren't going to easily have $15k-$25k to dump for storage when you still barely see wide deployment of them compared to what's out there.

I think batteries are essential to make NEM3 viable financially.
Fortunately batteries are getting cheaper. Less than $100/kWh today and that will halve in the next year or two.
I just installed a 7.6 kW Growatt solar hybrid inverter. $1100
Adding just a small amount of battery power (5 kWh to cover the 3 hour peak rate period) will cost less than $500.
This is much less than the historical cost.
(BTW, I bought LiFePO4 batteries 3 years ago for $105/kWh)

 

[cali8484]

(BTW, I bought LiFePO4 batteries 3 years ago for $105/kWh)

And you have no real warranty at that price.
Most battery warranty is only 10 years or less. So, counting on a 10+ year loan for ROI is risky. Also, many people don't stay at the same place longer than 10 years.

 

[mspohr]

And you have no real warranty at that price.
Most battery warranty is only 10 years or less. So, counting on a 10+ year loan for ROI is risky. Also, many people don't stay at place longer than 10 years.

My experience has been that warranties are mostly worthless.
If it works when new, it will usually continue to work.

 

[sunwarriors]

My experience has been that warranties are mostly worthless.
If it works when new, it will usually continue to work.

That might be the thinking for extended warranties you have to pay for, but I think warranties just allows you to go after someone/some company if crap happens. Like you buy a new Tesla and it leaks brand new, but it didn't rain yet for 6 months (CA living yo). You walk away and fix it yourself out of your pocket?

No, most everyone would use the warranty. Same goes for solar. If you bought some LFP from China and it works for 6 months on a DIY storage install, you're out of luck if things break completely with 0 warranty. 10 year on string inverter? Good luck in year 11 getting any help. Of course, the company has to still be around, but that's true for anything we buy.

 

[mspohr]

That might be the thinking for extended warranties you have to pay for, but I think warranties just allows you to go after someone/some company if crap happens. Like you buy a new Tesla and it leaks brand new, but it didn't rain yet for 6 months (CA living yo). You walk away and fix it yourself out of your pocket?

No, most everyone would use the warranty. Same goes for solar. If you bought some LFP from China and it works for 6 months on a DIY storage install, you're out of luck if things break completely with 0 warranty. 10 year on string inverter? Good luck in year 11 getting any help. Of course, the company has to still be around, but that's true for anything we buy.

Not one single piece of the solar kit I have bought in the past 10 years has failed. Inverters, microinverters, panels, batteries,etc.
I even have 10 year old AGM batteries that work just fine.
Most of this stuff is out of warranty and if it failed I could replace it with cheaper, better spec stuff.

 

[mspohr]

A group of Democratic state lawmakers on Tuesday announced an effort to roll back a rule that requires the state's major utility companies to set all electricity and gas rates based on customer income instead of energy use.

California lawmakers backpedal on new electricity rates rule based on customer income

A group of Democratic state lawmakers on Tuesday announced an effort to roll back a rule that requires the state's major utility companies to set all electricity and gas rates based on customer income instead of energy use.

www.kcra.com

 

[sunwarriors]

Not one single piece of the solar kit I have bought in the past 10 years has failed. Inverters, microinverters, panels, batteries,etc.
I even have 10 year old AGM batteries that work just fine.
Most of this stuff is out of warranty and if it failed I could replace it with cheaper, better spec stuff.

That's true for you and there are enough posts on failed parts here, other places. You also do 'work' yourself which makes cost/pricing/ROI not a fair comparison to a random joe who doesn't even know how to check if their solar is running.

I'm just saying, maybe nothing bad has happened to your stuff, but that doesn't mean longer warranties are mostly worthless which you are claiming. It also doesn't cost any extra a lot of times.