Florida 1:1 net metering under PSC review, 75% reduction in value of solar

[sleevemedia]

I've received news from the Florida PSC that is cause for concern at a time when energy storage options are immature and overpriced compared to what is coming in the next 5 years. Net metering may pay wholesale, aka avoided cost, on all excess customer-owned generation. We would earn 3 cents per kWh for excess production and pay 12 cents per kWh, standard retail rate, for our consumption.

While confirming that the $1m Tier II liability insurance requirement will be reviewed, PSC Commissioner Graham's advisor explained the broader reason for the Commission's revisit of the net metering rule that started last week. 1:1 net metering has grown to the point that a utility paying full retail value of 12 cents for excess solar power that costs 3 cents to acquire in the wholesale market is pushing more cost of subsidizing solar onto all customers than when the 1:1 net metering rule was written in 2008. He also explained that the Commission is required to set rates that cover a utility's reasonable costs, so as the utilities pay 12 cents on more and more excess COG, they are entitled to raise their rates for everyone and the PSC is required to allow those rate increases. Affordable solar intersecting with the ITC has created huge Y/Y COG growth.

The discussion and debate is expected to include utility proposals to pay wholesale rate of about 3 cents per kWh with the argument that this is the market price the utility pays to purchase power. The story will talk about how paying retail for solar excess hurts hard-working American families. Heck, throw in some references to socialism for good measure because no Florida public official wants to be branded a socialist given how much propaganda 12 cents a kWh can buy.

So as more and more cities make renewable energy pledges, including Orlando, we now have to hope that the PSC continues to see value in promoting a subsidy from all rate payers to solar producers, or else the Florida market moves to an energy storage mandate. We have to hope that solar jobs are important, Florida is the #2 market for solar employment. (Solar-related jobs United States by key state 2019 | Statista)

Now that we have sub-10-year ROI, the utilities want to punt it back into the teens. Now that solar-only loans cost about the same as electric bills and a wide swath of homeowners can afford the monthly payment that gets them to free power in 10 years, we're on the brink of doubling that monthly payment by adding storage.

Neighbors, beware the need for Powerwalls, not for outages, which in our buried utility infrastructure happen every 8-10 years, but because you just became a useless peaker plant. You're not a job creator, you're a socialist.

Email addresses for the commissioners can be found on their bio pages at Welcome to the PSC Web Site - Florida Public Service Commission

 

[DrSmile]

All the more reason for Tesla to implement bidirectional charging on their cars. I can personally see a future where there are no more power lines, just highly efficient solar panels coupled to storage systems in houses and cars. Really that future would be possible already had Tesla made bidirectional charging a priority.

 

[bkp_duke]

California went to something similar a few years back.

This is the inevitable progression of things, because honestly we don't own the wires we transmit over (nor do I ever want to).

Become as self-sufficient as possible and give the big middle finger to the utility companies.

 

[zanary]

All the more reason for Tesla to implement bidirectional charging on their cars. I can personally see a future where there are no more power lines, just highly efficient solar panels coupled to storage systems in houses and cars. Really that future would be possible already had Tesla made bidirectional charging a priority.

Elon has said as long as there is any free supercharging in his vehicles he would consider V2G.
Plus I think it requires parts to be installed for it to work on existing SX3.

 

[jjrandorin]

Yeah its been that way in california for a few years now, as mentioned. SCE will credit you for whatever rate you are under when the energy is produced (so, peak, off peak, etc) as a credit on your account, and when you pull back from the utility you are charged whatever rate is in effect.

However, when time comes to settle up at the end of the year, if you are a net producer of energy, and have credit "on the books, left over" they will only cut you a check for those leftover kW at wholesale rate.

its actually a decent solution, at least in my opinion. They give you credit during the year so you can use what you produce, but are not incentivizing anyone for becoming a powerplant and producing way more than what they consume.

The "spirit" of having solar (and having powerwalls) is, and should be "I produce all the energy that I self consume", but in any situation there are always those who want to try to make money on something when that wasnt the intent. Thats where all the "I want to charge at off peak rates and discharge my powerwall into the grid during peak rates" comes from, at least in my opinion.

Hopefully, in florida, if they implement this, they do something similar, in crediting people so they can self consume, but when time comes to actually cut a check, only pay wholesale rates.

 

[bkp_duke]

Also bear in mind, just like there are efficiency losses when you are self-powered with batteries (about 10% round trip loss), there are losses for the utility for putting them over the wires. Those losses are variable (range dependent, primarily), but in most net-metering agreements they are giving you credit for 100% of what you feed in, even though they cannot use all of it for other customers.

 

[jbcarioca]

That is bad news for me, but expected. I already have achieved decent payback on my solar, so it will just reduce my future benefit. I would not object were the proposal to pay distributed power producers the actual variable wholesale rates. That would facilitate Autobidder and would also not penalize anybody, including the utilities.

 

[BrettS]

Yeah its been that way in california for a few years now, as mentioned. SCE will credit you for whatever rate you are under when the energy is produced (so, peak, off peak, etc) as a credit on your account, and when you pull back from the utility you are charged whatever rate is in effect.

However, when time comes to settle up at the end of the year, if you are a net producer of energy, and have credit "on the books, left over" they will only cut you a check for those leftover kW at wholesale rate.

its actually a decent solution, at least in my opinion. They give you credit during the year so you can use what you produce, but are not incentivizing anyone for becoming a powerplant and producing way more than what they consume.

This is basically how it works in Florida right now. We have no TOU rates, so we don’t have to worry about the rate changing during the day, but we get full credit for every kWh we feed into the grid to use at night or in the winter, but at the end of the year when we true up any overproduction will be paid to us at wholesale rates.

I agree that it is a decent solution, but it certainly seems like the world is moving away from that

 

[getakey]

I think it is fare for utility to pay wholesale for over production. We get credit at retail rates for most of our solar production

 

[wjgjr]

Something I would offer as a counter-proposal to Florida's PSC is to limit the number of net-metering hookups to a certain amount. For example, in MD, net metering is only available to 1,500 MW of solar (and each installation is limited to 200% of use and also 2 MW.) My understanding is that once that is hit, the utilities no longer need to sign customers up to net metering (they would get the wholesale rate.) The benefit of this is it does limit the costs to utilities but it also helps both encourage installing solar now and gives customers some confidence in the cost/value of their system (though there could I imagine be an issue as the last customers scramble when they near 1,500 MW.)

 

[vickh]

All the more reason for Tesla to implement bidirectional charging on their cars. I can personally see a future where there are no more power lines, just highly efficient solar panels coupled to storage systems in houses and cars. Really that future would be possible already had Tesla made bidirectional charging a priority.

agreed. I have a perfectly good battery just sitting there in my garage

This is why I rent a small size/ 12 panels here in AZ no reason to sell to APS just enough to cover my needs

 

[bkp_duke]

From the last video I watched with Sandy Munroe, he reports that Tesla would need new hardware (AC/DC inverters) in the cars to enable bidirectional charging.

 

[power.saver]

Also bear in mind, just like there are efficiency losses when you are self-powered with batteries (about 10% round trip loss), there are losses for the utility for putting them over the wires. Those losses are variable (range dependent, primarily), but in most net-metering agreements they are giving you credit for 100% of what you feed in, even though they cannot use all of it for other customers.

Actually, unless all of the homes on your transformer are producing energy, the energy you produce is consumed by the loads on that transformer. Which is usually the case. Only when all of the homes are producing energy does it get across the transformer and up to the secondaries and then down at the next transformers. So utilities have very low loss from distributed (solar) energy, and it even helps reduce their own distribution losses.

 

[bkp_duke]

Actually, unless all of the homes on your transformer are producing energy, the energy you produce is consumed by the loads on that transformer. Which is usually the case. Only when all of the homes are producing energy does it get across the transformer and up to the secondaries and then down at the next transformers. So utilities have very low loss from distributed (solar) energy, and it even helps reduce their own distribution losses.

Where we live, there is heavy penetration of solar. On a day like today, you can bet we and all our neighbors are exporting outside of our local transformer, and likely out of our local substation.

 

[sleevemedia]

Lots of great comments, thanks. I did state one thing I need to clarify, the 3 and 12 cents were examples I took too literally. Actual numbers may significantly vary.

I'm absolutely in agreement that excess production should be wholesale rate, and as BrettS confirmed, that's already the case here. Gaming the system at a cost to my neighbors is not at all cool.

If I was in a TOU state, energy storage would be critical to the value of a solar system. If we earned wholesale on all production, I'd have energy storage.

It just kills me to buy Li-ion Powerwalls with solid state, graphene, and flow/REDOX soooooo close. And the elephant in the room, battery day. Right now, Powerwalls are good storage, just like monocrystalline silicon. But like how perovskite and multi-junction will make us laugh at efficiency in the 20s in 15 years, battery technology already has me laughing.

I think the Maryland cap would make sense if it was diminishing credits based on install date. What I'd rather see is grandfathering for 20 years like Arizona, but that earns me a gate slammer title.

 

[wjgjr]

Lots of great comments, thanks. I did state one thing I need to clarify, the 3 and 12 cents were examples I took too literally. Actual numbers may significantly vary.

I'm absolutely in agreement that excess production should be wholesale rate, and as BrettS confirmed, that's already the case here. Gaming the system at a cost to my neighbors is not at all cool.

If I was in a TOU state, energy storage would be critical to the value of a solar system. If we earned wholesale on all production, I'd have energy storage.

It just kills me to buy Li-ion Powerwalls with solid state, graphene, and flow/REDOX soooooo close. And the elephant in the room, battery day. Right now, Powerwalls are good storage, just like monocrystalline silicon. But like how perovskite and multi-junction will make us laugh at efficiency in the 20s in 15 years, battery technology already has me laughing.

I think the Maryland cap would make sense if it was diminishing credits based on install date. What I'd rather see is grandfathering for 20 years like Arizona, but that earns me a gate slammer title.

I would say it is just a matter of perspective. If you are taking advantage of the ITC or any other state or utility rebates, you are taking money from you neighbors, too. Net metering - like the ITC and other incentives - is intended to reduce the cost of solar and speed the transition to renewable energy. Certainly there can be a discussion - as it sounds like FL is having - as to whether net metering it is the best incentive or whether the incentive was structured properly and fairly. You mention the advances in battery technology, and it may, for example, be better for the state and/or utilities to subsidize batteries instead of net metering (which essentially makes the grid your battery,) particularly as it may be FL has reached a critical mass of solar.

I am in agreement that logically, excess solar production should be sold at the wholesale rate. I just wouldn't see it as gaming the system to take advantage of net metering - instead, I would look at it as an incentive your government has chosen to promote solar/renewable energy production. And, like all incentives, the residents of the jurisdiction providing the incentive pay for it, one way or another. It's just as I would argue that solar should be paid for in full by the owner, but the federal government, through the ITC, has chosen to provide an incentive to promote renewables.

Eventually, all of these incentives likely will need to be wound down, but the hope is that by then the pricing will be such that it makes sense to buy solar at retail, and I think we really are getting close to that point. As an earlier adopter, there is nothing wrong with taking advantage of the incentives on offer precisely because it does help speed the transition to affordable renewable energy.

 

[charlesj]

I think it is fare for utility to pay wholesale for over production. We get credit at retail rates for most of our solar production

And how do you cash that credit in at retail?

 

[DrSmile]

It just kills me to buy Li-ion Powerwalls with solid state, graphene, and flow/REDOX soooooo close. And the elephant in the room, battery day. Right now, Powerwalls are good storage, just like monocrystalline silicon. But like how perovskite and multi-junction will make us laugh at efficiency in the 20s in 15 years, battery technology already has me laughing.

Maybe. But then again perovskite be the cold fusion power of the 1980s or the algae biofuel of the 2000s... Stability seems to be a major problem that may not be solvable.

 

[bkp_duke]

Maybe. But then again perovskite be the cold fusion power of the 1980s or the algae biofuel of the 2000s... Stability seems to be a major problem that may not be solvable.

And people tend to gloss over that the current solar panels we have now took decades of research to get where they are. Perskovite, en masse and affordable, won't be here anytime soon.