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If you're California, the economics in favor of a solar solution will likely get worse soon

RKCRLR

Member
Apr 13, 2020
393
143
Garden Valley, CA
They need to make more hydroelectric pumped-storage facilities. They were doing this when I was a kid. Not real efficient but if we get to a point where we have excess solar who cares.
 

ucmndd

Well-Known Member
Mar 10, 2016
6,532
12,242
California
It's interesting to see that PV has been so successful we've actually shifted the peak demand times on the grid to much later in the day. The writing is indeed on the wall and the economics of solar for cost savings are going to continue to dwindle due to the massive supply. I'm no apologist for PG&E or CPUC, but I also can't say I completely blame them for adjusting their tariffs to match the changing demand curve.

With PV remaining the most cost-effective and viable renewable energy source, those looking for economic savings are going to really have to shift toward storage. I just signed a contract for two powerwalls for exactly this reason - anticipating the day I get kicked off of EV-A and my bill practically doubles without storage/arbitrage.
 

getakey

Active Member
Jan 28, 2020
1,239
407
95762
I doubt if Household PV has shifted demand that much. It is PG&E's' renewables that have create a gap in Demand versus Capacity.
PG&E killed off quite a bit of natural gas plants
 

miimura

Well-Known Member
Aug 21, 2013
6,254
5,878
Los Altos, CA
Sure, but household PV is producing at the same time as the grid-scale renewables, so being subject to the same economics.

California has too much solar power. That might be good for ratepayers
So much of that article is talking about curtailment. Until there are policies in place to curtail fossil fuels instead of renewables, or at least in equal amounts to renewables, we will always be doing less than we could be to reduce GHG emissions. They apparently have no problem forcing renewable suppliers to cut their profitability by curtailing, but won't do the same to fossil based energy suppliers. When I look at the proportion of fossil to renewable on the CA-ISO grid today, this is an obvious problem. I have to assume that the root cause is long term contracts instituted after the deregulation energy crisis.
 
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getakey

Active Member
Jan 28, 2020
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I read the article, but I find it hard to believe over building solar is good for rate payers unless they put in place a lot of storage. I don't see that coming any tie soon. Plus, a lot of PG&E solar is contracted at high rates from private suppliers. Thats partially what got us these high rates. Without being able to meet the gap in the evening, PG&E has to buy power at spot prices when prices are at the highest.
 
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ucmndd

Well-Known Member
Mar 10, 2016
6,532
12,242
California
So much of that article is talking about curtailment. Until there are policies in place to curtail fossil fuels instead of renewables, or at least in equal amounts to renewables, we will always be doing less than we could be to reduce GHG emissions. They apparently have no problem forcing renewable suppliers to cut their profitability by curtailing, but won't do the same to fossil based energy suppliers. When I look at the proportion of fossil to renewable on the CA-ISO grid today, this is an obvious problem. I have to assume that the root cause is long term contracts instituted after the deregulation energy crisis.
Completely agreed.

I often hear the rationale being that it's difficult / time consuming / not instantaneous to curtail fossil sources, whereas curtailing solar is literally a matter of clicking a button, so the renewables go first. As to the veracity of that, who knows, and I'm certain there's a political element as you suggest. That's obviously in nobody's best interest excluding maybe the operators of the fossil plants, and a big reason why storage has to become an increasing part of the equation, be it thermal, pumped/gravitational, chemical, whatever.

How amazing would it be to see San Luis Reservoir turned into a giant energy storage facility? I mean, I know that's what it essentially is right now - but what if we used all that excess solar capacity to dramatically increase the pumping capacity and match it with generation capacity that could provide massive hydro power overnight? Then pump it all back up the next day. Basically make it a daily pump/generate cycle vs. a seasonal one.

Sure, water implications, what does it do to the aqueduct, blah blah... but it's a fun thought to play with.
 

Southpasfan

Member
Jun 2, 2019
422
534
Pasadena
So I see the economics as follows:

1. According to CAISO California ISO - Prices you can watch production prices fluctuate through the day. They do rise as demand rises, but only from say 2.5 cents per Kwh to 3.8 cents. If you are an energy trader or a utility, that's alot.

2. However, its not "a lot" when you consider that California retail pricing is around "plus 17 cents per kwh" = i.e. 20 cents per kwh or more. The "more" as far as I can see, is mostly based on public policy to encourage the public to not use electricity, especially during early evening.

3. I don't know who has access to the wholesale price, but I believe even large buyers (assuming, for example, every Home Depot in SoCal can cut a large scale deal) can get anywhere close to 3 cents a kwh. Probably more like 10 to 15 cents. Maybe someone knows.

4. This is the problem facing us. Before one gets to private energy, any new renewables plant has to meet or beat the 2.5 to 3.8 cents price. Someone pointed out that in California we are stuck with some older, expensive contracts, maybe so.

5. Now we come in. Its pretty easy with solar and 1 to 1 net metering to beat 20 cents per kwh. At least it is now. Maybe ten years ago before prices dropped and efficiency improved those people were really simply doing the right thing.

6. But let's use my 16.32 kwh system as an example. Its predicted to produce 25,000 kwh per year. Over twenty years that's 500,000 kwh. If I end up paying 25 cents per kwh it will cost me $125,000. I think that's a good set of assumptions. I haven't gummed it up with assuming the current rates will rise too much. Although they could.

7. Pricing just the panels over the same 20 years, with the Tesla Mosaic loan, would be 20k for the panels after tax break and then 16k of interest so 36K.

8. 36k beats 125k, but remember that 125k was retail pricing. Wholesale of the same 500,000 kwh might only cost the utility, say, $20,000. at 4 cents a kwh.

9. Here's the rub, private energy can compete with retail prices, but not yet with wholesale prices.

10. And, the numbers don't look as good if you don't really get 1 kwh at night for each 1kwh you send in the daytime. But, once you get over the "we are going to encourage people to go green" bit, why should any utility essentially subsidize residential energy by paying retail price for it? I can think of a couple of reasons, starting with the fact that the energy we produce is free, but that's an argument for a pretty aggresive net metering plan (from the utilities point of view). I think the reason I agree with those who predict "the party is over" is that a utility may be able to do 1 to 1 net metering as long as the number of private solar producers is low, but what if 50% all houses have solar? No utility could pay 20 cents per kwh for something that otherwise costs 3 cents per kwy. Unless of course, they charge all the non-solar people 40 cents a kwh.

11. But if you add powerwalls the good news is its still cheaper than paying the utility, as long as the powerwalls get you through early evening. I make it for a 16.32 system with three powerwalls over twenty years will cost $72K (including all loan costs) whereas the energy would cost at least 125K. Its a good deal financially, not a super great one.

12. Best thing for the world is for the utilities to save the money they would have to spend to generate the energy we give them and use that money for some form of energy storage to benefit everyone (including private solar producers). But I can't avoid the fact that the utility isn't actually saving any money by buying electricity from me at 20 cents that they could otherwise buy at 3 cents.
 

getakey

Active Member
Jan 28, 2020
1,239
407
95762
1. According to CAISO California ISO - Prices you can watch production prices fluctuate through the day. They do rise as demand rises, but only from say 2.5 cents per Kwh to 3.8 cents. If you are an energy trader or a utility, that's alot.

The spot price varies way more than 2.5 to 3.8. It can go all the way to 15 cents/kWh

from PG&E Bankruptcy Could Deal Blow to Its Solar-Power Suppliers’ Finances

Analysts at Credit Suisse estimate that PG&E could save $2.2 billion a year by renegotiating renewable power contracts down to current market prices. Those savings could offset the utility’s annual cost of paying off wildfire claims from the last two years, the analysts wrote in a research note.

“It makes a lot of economic sense for PG&E to try and reject the older, higher-priced contracts,” said Clifford J. Kim, a senior analyst at Moody’s Investors Service.
 

getakey

Active Member
Jan 28, 2020
1,239
407
95762
from that same article:

PG&E pays Con Edison an average $197 per megawatt-hour for its electricity, compared with the $25 to $30 per megawatt-hour cost of power from new solar plants, the Credit Suisse analysts said.
 

holeydonut

Supporting Member
Jun 27, 2020
1,505
880
East Bay NorCal
1. According to CAISO California ISO - Prices you can watch production prices fluctuate through the day. They do rise as demand rises, but only from say 2.5 cents per Kwh to 3.8 cents. If you are an energy trader or a utility, that's alot.

The spot price varies way more than 2.5 to 3.8. It can go all the way to 15 cents/kWh

from PG&E Bankruptcy Could Deal Blow to Its Solar-Power Suppliers’ Finances

Analysts at Credit Suisse estimate that PG&E could save $2.2 billion a year by renegotiating renewable power contracts down to current market prices. Those savings could offset the utility’s annual cost of paying off wildfire claims from the last two years, the analysts wrote in a research note.

“It makes a lot of economic sense for PG&E to try and reject the older, higher-priced contracts,” said Clifford J. Kim, a senior analyst at Moody’s Investors Service.


Lolol yeah I hope he didn't have to analyze much info to see PG&E had some wildly sub-optimal contracts.

Better question is to figure out how PG&E got into so many poorly structured contracts without a hedge; without a backup plan; and without any common sense. Oh yeah, it's because they're PG&E and cannot be expected to act responsibly. They're basically a front to move money from taxpayers and California residents into some rich people's pockets.
 
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miimura

Well-Known Member
Aug 21, 2013
6,254
5,878
Los Altos, CA
1. According to CAISO California ISO - Prices you can watch production prices fluctuate through the day. They do rise as demand rises, but only from say 2.5 cents per Kwh to 3.8 cents. If you are an energy trader or a utility, that's alot.

The spot price varies way more than 2.5 to 3.8. It can go all the way to 15 cents/kWh

from PG&E Bankruptcy Could Deal Blow to Its Solar-Power Suppliers’ Finances

Analysts at Credit Suisse estimate that PG&E could save $2.2 billion a year by renegotiating renewable power contracts down to current market prices. Those savings could offset the utility’s annual cost of paying off wildfire claims from the last two years, the analysts wrote in a research note.

“It makes a lot of economic sense for PG&E to try and reject the older, higher-priced contracts,” said Clifford J. Kim, a senior analyst at Moody’s Investors Service.
If Bankruptcy allows PG&E to cancel any old high priced contracts, they had better apply equally to renewable and fossil contracts. All the stories I've read only talk about canceling renewable contracts.
 

joebob73

Member
Mar 19, 2015
75
101
Los Angeles Area
So I see the economics as follows:

1. According to CAISO California ISO - Prices you can watch production prices fluctuate through the day. They do rise as demand rises, but only from say 2.5 cents per Kwh to 3.8 cents. If you are an energy trader or a utility, that's alot.

2. However, its not "a lot" when you consider that California retail pricing is around "plus 17 cents per kwh" = i.e. 20 cents per kwh or more. The "more" as far as I can see, is mostly based on public policy to encourage the public to not use electricity, especially during early evening.

3. I don't know who has access to the wholesale price, but I believe even large buyers (assuming, for example, every Home Depot in SoCal can cut a large scale deal) can get anywhere close to 3 cents a kwh. Probably more like 10 to 15 cents. Maybe someone knows.

4. This is the problem facing us. Before one gets to private energy, any new renewables plant has to meet or beat the 2.5 to 3.8 cents price. Someone pointed out that in California we are stuck with some older, expensive contracts, maybe so.

5. Now we come in. Its pretty easy with solar and 1 to 1 net metering to beat 20 cents per kwh. At least it is now. Maybe ten years ago before prices dropped and efficiency improved those people were really simply doing the right thing.

6. But let's use my 16.32 kwh system as an example. Its predicted to produce 25,000 kwh per year. Over twenty years that's 500,000 kwh. If I end up paying 25 cents per kwh it will cost me $125,000. I think that's a good set of assumptions. I haven't gummed it up with assuming the current rates will rise too much. Although they could.

7. Pricing just the panels over the same 20 years, with the Tesla Mosaic loan, would be 20k for the panels after tax break and then 16k of interest so 36K.

8. 36k beats 125k, but remember that 125k was retail pricing. Wholesale of the same 500,000 kwh might only cost the utility, say, $20,000. at 4 cents a kwh.

9. Here's the rub, private energy can compete with retail prices, but not yet with wholesale prices.

10. And, the numbers don't look as good if you don't really get 1 kwh at night for each 1kwh you send in the daytime. But, once you get over the "we are going to encourage people to go green" bit, why should any utility essentially subsidize residential energy by paying retail price for it? I can think of a couple of reasons, starting with the fact that the energy we produce is free, but that's an argument for a pretty aggresive net metering plan (from the utilities point of view). I think the reason I agree with those who predict "the party is over" is that a utility may be able to do 1 to 1 net metering as long as the number of private solar producers is low, but what if 50% all houses have solar? No utility could pay 20 cents per kwh for something that otherwise costs 3 cents per kwy. Unless of course, they charge all the non-solar people 40 cents a kwh.

11. But if you add powerwalls the good news is its still cheaper than paying the utility, as long as the powerwalls get you through early evening. I make it for a 16.32 system with three powerwalls over twenty years will cost $72K (including all loan costs) whereas the energy would cost at least 125K. Its a good deal financially, not a super great one.

12. Best thing for the world is for the utilities to save the money they would have to spend to generate the energy we give them and use that money for some form of energy storage to benefit everyone (including private solar producers). But I can't avoid the fact that the utility isn't actually saving any money by buying electricity from me at 20 cents that they could otherwise buy at 3 cents.

Question for the folks who seem to be in the know here: If I am net generator of power at the annual true up period, I only get reimbursed at the wholesale rate correct? So whether I have battery backup or use a lot/little during the peak usage, it won't affect my bill because I am generating more than I use (and getting paid back at wholesale rates). Do I have that right?
 

getakey

Active Member
Jan 28, 2020
1,239
407
95762
So whether I have battery backup or use a lot/little during the peak usage, it won't affect my bill

Not exactly. Lets say Peak is 4pm to 9pm. You would probably be generating more than what you use mid-morning to early afternoon. During this time, you are "banking" credits at the Off Peak or Shoulder rate. Then when 4pm comes you may or may not be producing more than you are using. Certainly by 6pm, you are going to be pulling from the grid at the Peak rates. So you could be raking up more charges than credits in a day.
 

getakey

Active Member
Jan 28, 2020
1,239
407
95762
So what does PG&E do when more people get solar and battery storage and are off the grid? They are forcing our hand to do so.

PG&E is shutting down Diablo. That supplies a steady a 2.25MW (6.5%) of their supply

California ISO - Supply

That will create an even bigger gap of Demand versus Supply after 5pm. Replacing Diablo with more renewables isn't the answer without a whole lot of storage
 

Need

Active Member
Nov 22, 2017
2,912
2,209
SoCal
Question for the folks who seem to be in the know here: If I am net generator of power at the annual true up period, I only get reimbursed at the wholesale rate correct? So whether I have battery backup or use a lot/little during the peak usage, it won't affect my bill because I am generating more than I use (and getting paid back at wholesale rates). Do I have that right?

Yup as long as you are still in the negative money wise at the end of the 12 months. Last year my annual bill was something like -$1900 I think. The actual money I got was about $50.

EDIT: but like @getakey said, you will get charged more if you use your electricity at peak rate during the evening.
 
Last edited:

MXLRplus

Active Member
Mar 11, 2020
1,595
2,452
Eastvale, CA
SCE pays 0.025/kWh for overproduction for their net metering commercial customers. You can't afford commercial solar in California from a financial perspective in 2020 without gov't subsidies. The cost of capital breaks it. Please nobody regurgitate the Oil Barons Receive Trillions In Subsidies, thanks in advance. It doesn't justify what the CPUC allowed SCE and PGE to do with their tariffs and it's completely unrelated.
 

holeydonut

Supporting Member
Jun 27, 2020
1,505
880
East Bay NorCal
PV Magazine has an article about NEM 3:
The net metering successor tariff ‘NEM-3’ proceeding in California has officially kicked off

Sounds like stuff is off to a slow start so they don't expect NEM 3.0 until late 2022.

Interesting take-away:
Given that the value of exports will almost certainly get reduced, we expect that to be bullish for energy storage. Energy storage attachment rates with solar are already steadily rising in California. By the time NEM-3 starts getting implemented, likely in 2022, we think storage attachment rates will likely escalate further.
 

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