Regular readers of this blog will know that solar-friendly policies are under constant attach by the utilities, especially the three Investor-owned utilities (or IOUs as they are known), PG&E, SDG&E and our own SCE. Well they are at it again, with rate proposals before the California Public Utilities Commission (CPUC) that could harm both solar and energy efficiency measures alike. Fortunately, we have an opportunity to have our say - here’s our take. (H/t our friends at CalSEIA.)
Current policies in California, most notably net metering, along with a tiered rate structure (whereby you pay more for electricity as you use more) have provided powerful incentives not only for consumers to install solar, but to also take proactive measures to reduce their energy consumption. As a result, energy use in California over the past twenty years has grown slower than the growth in population despite the explosion of new electronic devices in homes and businesses during that time. Indeed, California has lead the way for the rest of the Nation, proving that you can have a twenty-first century lifestyle and still reduce your energy demand.
In other words, these policies have been a success.
The proposals being floated at the CPUC would change rates throughout the three IOU service areas (i.e., much of California) and threaten that success. In particular, they are seeking to add a flat, monthly fee to everyone of $10 to all bills, regardless of use and to reduce the number of tiers from four to two. In addition, the rate for the lowest tier would increase, making this a double-whammy not just to solar owners, but to the poorest electric customers who will see a rise in their rates. (So much for the utilities’ concern over hurting the poor!)
Fortunately these changes are not yet cast in stone and the public, particularly advocates for solar and energy efficiency, have a chance to have their voices heard. The CPUC is holding a series of public hearings, some in the Run on Sun service area, as well as others around the state. Here are the upcoming hearings:
September 29, 2014
2:00 pm & 6:30 pmFontana City Council Chambers 8353 Sierra Avenue Fontana, CA 92335
September 30, 2014
2:00 pm & 6:30 pm?Temple City Council Chambers 5938 Kauffman Avenue Temple City, CA 91780
October 2, 2014
2:00 pm & 6:30 pmPalmdale City Council Chambers38300 Sierra Hwy, Suite APalmdale, CA 93550
October 9, 2014
2:00 pm & 6:30 pmHoliday Inn Chico – Conference Center685 Manzanita Ct.Chico, CA 95926
October 14, 2014
2:00 pm & 6:30 pmFresno City Council Chambers2600 Fresno StreetFresno, CA 93721
We are planning on attending the hearing in Temple City. If you attend one of these important hearings, please let us know about your experience in the comments.
UPDATE - We heard back from BWP - details at the end of the post…
The wizards at Burbank Water and Power have announced their solar rebate program will resume, but only for the lucky few who happen to be facing West. Here’s our take.
Having a stable, predictable solar rebate program is the key to making a solar program successful. Municipal utilities like Pasadena Water & Power, and investor-owned utilities (like SCE) participating in the California Solar Initiative, have had great success with their programs.
Then there are other munis, like Burbank Water & Power (BWP), that just can’t seem to get it right. BWP, like its similarly misguided neighbor, Glendale Water & Power, has had an on-again, off-again rebate program that baffles all who attempt to make use of it. Now, for a brief moment, BWP’s solar rebate program is on-again, sort of. During the month of August, potential Burbank solar customers are allowed to submit rebate applications (submission deadline is August 29 at 5:00 p.m.) for a lottery to be held on September 8th. The lucky 60 residential and 15 small commercial (<30 kW) customers who make the grade (no details on how the auction will actually be conducted have been released) will be advised of their good fortune by September 12th. Rebate amounts are $0.96/CEC AC Watt for residential and $0.73 for small commercial.
But wait, there’s more.
For the first time in our experience, a utility is limiting rebates for solar systems to only those which face in a generally westerly direction. In fact, systems facing true south are completely ineligible for rebates (as shown in the image to the left), even though such systems are the most productive!
BWP is essentially precluding the overwhelming majority of building owners from even having a chance at a rebate in their lottery system.
This continues a trend we have seen with other muni utilities (GWP we are talking about you) where solar programs are designed to be unsuccessful. It will be interesting to see if we can extract any data from BWP about the results of their lottery.
BWP’s Stated Rationale for Restricting System Azimuth
But why the restriction in the first place?
According to BWP, it is to insure that the power produced comes closest to overlapping with BWP’s peak afternoon demand from 4-7 p.m. Thus to qualify, systems have to be oriented between 200 and 270 degrees and have a minimum tilt of 5 degrees.
That seemed pretty arbitrary to us.
While we could understand a utility wanting to limit providing rate payer money to systems that yield the maximum benefit to those rate payers, there is certainly nothing magical about a limit of 200-270 degrees. In fact, somewhere around 270 should be the sweet spot for afternoon production, with a fall-off on either side. So why cutoff systems beyond 270 degrees?
We decided to run some models using NREL’s PVWATTS tool. We assumed a 10 kW system at a 10 degree pitch (a common residential roof pitch) and accepted the other defaults for the model. We then calculated the hour-by-hour output for systems with azimuths ranging from 200 to 330 degrees. Here are the results for the critical hours from 4 to 7 p.m.
All of the azimuth angles in the green box are acceptable to BWP, whereas all of the azimuth values in the red box are deemed unacceptable for a rebate from BWP.
But here’s the thing… see that green horizontal line? That represents the 4-7 p.m. output for our hypothetical array with an approved azimuth of 200 degrees. Yet five out of six azimuth values modeled here that are rejected by BWP, actually produce more power during the critical period than does our approved system at 200 degrees!
So what exactly is going on here? BWP’s asserted rationale does not hold up to scrutiny. Which begs the question, why, really, is BWP so seriously limiting who can participate in their lottery? It certainly is not justified by their desire to maximize 4-7 p.m. production. If that were truly the case, they should include azimuth angles all the way to 320 degrees. They would get more timely power production while opening their rebate lottery to many more potential customers.
How about it, BWP, what is going on here?
If you are a potential BWP customer who falls outside of the “accepted” azimuth band, you might want to contact the Solar Support program managers:
John Joyce: firstname.lastname@example.org or
Alfred Antoun: email@example.com
If you get a response, please add it to the comments.
UPDATE - We heard back from John Joyce, Solar Support Program Manager at BWP, about the outcome of the lottery process. According to Mr. Joyce:
105 lottery entries have been submitted and the budget is sufficient to allow each of these applicants to participate, therefore no lottery will be held.
We have a further inquiry in to Mr. Joyce to see if there is still budget left over to allow more applications going forward. We will update this again if we hear back.
One of our astute readers contacted us to ask if we had noticed that SCE had just increased their rates—and dramatically. That got our attention so we decided to spend some quality time amidst SCE’s tariffs. The news is mixed: terrible news for people who are going to have to pay these crazy rates, but great news for everyone who can install solar. In fact, SCE’s new domestic rate is about all anyone would need to be convinced to finally make the switch to solar.
In case you did not know it, every SCE tariff—that is, the rate structures under which they bill their customers such as the Domestic tariff for most residential customers or GS-1 and GS-2 for most commercial customers—can be found on their website. If you know where to look. (Hint: look here!) Of course, when you do find what you are looking for, you are rewarded with something that looks like this:
This is one half of SCE’s Domestic rate (the delivery portion)—and this is about the simplest rate structure that they use! So it is not surprising that most normal people don’t really examine these things to see what is going on—they just groan and pay the bill.
But we suspect people will do more than groan when they look at their bills this summer.
We had been working on a solar proposal for a prospective client in SCE territory when we learned about the rate change. The client’s usage was relatively high, averaging 55 kWh/day over the course of the year; high, but still far lower than some of our clients. Under the rate structure in effect prior to June 1, this client’s annual bill worked out to $5,100 but after applying the new rates her annual total jumped to $5,750—an increase of a whopping 12.7%!
We will pause a moment to let that sink in.
What about that other potential client we wrote about, the one whose SCE bill already contained an incredibly misleading chart purporting to help her understand her bill. What impact will these new rates have for her? Under the rates in place before June 1, her total bill for the year was an already eye-popping $8,435—ouch! But under the new rates? Her new bill becomes $9,560—an increase of 13.4%!
So what is actually going on here? Turns out that the rates on the high end, Tiers 3 and 4, are the culprits, increasing by 16.4% and 14.8% respectively. Live in Tier 4 this summer and you will be paying 34.8¢/kWh for the privilege!
There is a silver lining here and that is that adding solar pays off better than ever. If your solar power system gets you out of Tier 4 alone, you will save thousands of dollars a year. For our prospective client who averaged 55 kWh per day, her savings come to $4,171 in Year 1. Even without a rebate from SCE (which for now at least has gone the way of the Dodo), her payback is in Year 5! After 10 years, thanks to these new rates, she will have saved an additional $25,000! And by avoiding a lease (this client is planning on using HERO financing), those benefits all go to her!
We have said it before and we will say it again: utility rates are only going up. While this example pertains to just SCE’s residential customers, guess what? You commercial customers are about to see your rates go up as well (more on that soon). And muni customers, now is not really the time to feel smug as your rates are going up too (and yes, PWP folks, we mean you!).
Give us a call and let’s see if we can’t help—contrary to the song, we’ve got a cure for these summertime blues!
We have been waiting quite a while, but the good news is that HERO Financing for residential solar has finally arrived in Los Angeles County!
On Friday, May 23, the HERO Financing program formally launched in LA County after being a huge success in Riverside and San Bernardino counties, helping fuel explosive growth of solar installations in those counties.
Here is how they describe the program:
The HERO Financing Program provides homeowners a unique opportunity to make home energy
improvements through property tax financing. Benefits include 5-20 year terms, tax-deductible interest,
transferability when the property is sold and consumer protections.
To learn more go to heroprogram.com
Unfortunately, not every city in LA County is (presently) participating—most notable laggard from our perspective? Pasadena! Come on, Pasadena, what is up with this? Pasadena was signed on to the PACE program years ago, so what is holding you back now? (Oh, and the City of LA is not signed on yet either, but no shock there.)
Here is the list of participating cities in LA County as of the program rollout:
|Alhambra||Hawthorne||Rancho Palos Verdes|
|Azusa||Hermosa Beach||Rolling Hills|
|Baldwin Park||Inglewood||Rolling Hills Estates|
|Carson||La Cañada Flintridge||San Dimas|
|City of Industry||La Verne||San Gabriel|
|Diamond Bar||Monrovia||South El Monte|
|El Monte||Montebello||South Pasadena|
|El Segundo||Monterey Park||Temple City|
If you would like to encourage Pasadena to get with the program, here is some contact information for you:
Bill Bogaard, Mayor (626) 744-4311
Margaret McAustin, Vice Mayor (626) 744-4742
Jacque Robinson, Council Member - District 1 (626) 744-4444
John J. Kennedy, Council Member - District 3 (626) 744-4738
Gene Masuda, Council Member - District 4 (626) 744-4740
Victor M. Gordo, Council Member - District 5 (626) 744-4741
Steven Madison, Council Member - District 6 (626) 744-4739
Terry Tornek, Council Member - District 7 (626) 441-4802
We are looking forward to participating in the HERO program. We hope it will help more homeowners finance solar power projects with little or no upfront costs, and in a way that is far more financially beneficial to them then other financing mechanisms, like solar leasing.
SCE has devised an extremely complicated rate structure designed for residential customers who drive electric vehicles. Instead of having a separate meter for EV charging, this rate structure is designed to replace the Domestic rate and apply to the entire household’s energy use—presumably at a savings. But does it? What we discovered may come as a shock…
SCE has long offered a rate structure that was designed for separate meter charging of EVs. But as more and more people acquire EVs there were relatively fewer consumers looking to go through the hassle of installing a separate meter just to charge their EV. SCE’s combined household and EV charging rate, known by the unmelodious monicker of TOU-D-TEV ("EV Rate,” for short), is designed to provide a lower-cost option for customers who were previously on SCE’s standard, Domestic rate structure.
As the acronym implies, the EV Rate is a time-of-use rate structure which means that what you pay for a kilowatt-hour of energy is directly tied to when you use it. There are three time classes: On-Peak (weekdays, excluding designated holidays, from 10 a.m. to 6 p.m.), Super Off-Peak (everyday, midnight to 6 a.m.) and Off-Peak (all other times). In addition to the time of use component, the EV Rate includes tiers. While Domestic rate customers are used to four tiers at which energy gets progressively more expensive, the EV Rate has only two tiers. Put this all together and you have the potential to pay wildly different amounts for your energy, as this table shows:
Stay within Level 1 and use your energy during Super Off-Peak and you pay just 9.4¢/kWh. But make the mistake of using energy during the middle of the day in the summer in Level 2 and you will be pay a shocking, 46.4¢/kWh! Yikes!!! Sure hope you aren’t at home during the day running your A/C.
EV owners are not required to take service under the EV Rate structure (at least not yet), so why switch? SCE advises customers that they can save money using this rate and we wanted to see if that was really true. We decided to model two different users and see how their bills would change between the Domestic rate and the EV Rate. The first user, our “average” user, consumes roughly 1,000 kWh per month (probably on the low end for most EV owners), or a little more than twice the baseline allocation. The second user, our “large” user, consumes more like 2,500 kWh per month and reflects a large home with heavy A/C use.
Let’s start with the average user:
This graph compares what our average user would have paid under SCE’s Domestic rate (the constant, orange line) against what she would pay under the EV Rate (the blue line) as a function of what percentage of the total monthly usage occurs during On-Peak hours. (Throughout we assume that 20% occurs during the Super Off-Peak hours of midnight to 6 a.m., and the balance occurs during Off-Peak).
Under the Domestic rate, our average customer would pay $3,200 for the year. If she manages to keep her On-Peak usage down below 30% of the total energy consumption, she will save money—as much as $355 or 11% off her bill, if her On-Peak usage is jut 5%.
But those “savings” can quickly disappear if she isn’t careful (or her children aren’t). Let her On-Peak usage climb to 60% of her bill and she will get hit with a 12% penalty and end up paying $388 more than if she had not switched.
What about our “large” user, how does he fare?
Most likely, better.
While his overall bill is much higher—he would be paying $8,500 on the Domestic rate—his potential savings versus penalty comparison is much more forgiving. He can save as much as 13% ($1,100) compared to a penalty of only 6% ($478). Plus, his breakeven point is higher, as he doesn’t start losing money until his On-Peak usage gets to 45%.
(This actually continues a trend with SCE’s residential rates where increases are highest at the lowest end of usage and the very highest users are actually getting a bit of a break. What an odd sort of mixed message.)
Bottom line—it is possible to save money, even significant money, if you are very careful about when you use energy.
Most EV’s are designed so that you can program them to charge during off-hours and anyone under this rate structure would absolutely want to insure that they use that feature. Indeed, there may be other energy users that could be similarly re-programmed such as pool pumps, dishwashers and washing machines, to run during the Super Off-Peak window. Unfortunately, it is very difficult to avoid running your A/C during the day if anyone is at home from 10 a.m. to 6 p.m. on weekdays—and doing so could be very expensive.
It should be obvious, but adding solar to the mix here could be huge since On-Peak hours directly coincide with the greatest production from a solar power system. Put most simply, if you own an EV and are considering making the switch to this EV rate structure, you need solar.