Thoughts on Solar by Run on Sun's Founder & CEO, Jim Jenal

In a mailing dated January 18, 2011, Pasadena Water & Power (PWP) sent its solar customers election forms to determine how they will be compensated for any surplus energy generated. We previously wrote about PWP’s proposal and the City Council’s adoption of that proposal for net surplus energy compensation. Here is our analysis of the current form and our recommendation.

As we noted previously, PWP’s compensation proposal fails to fairly compensate solar power customers for the excess energy that they produce.  The present form does nothing to improve on that situation, but does reveal that compensation on a monthly basis will not actually result in a check being cut unless and until the amount owed exceeds $50.  This is apparently another “administrative savings” for PWP that was not discussed when their proposal was brought before the City Council.

Curiously, neither the cover letter nor the form itself discloses what the actual compensation rates will be.  From our earlier post, here are the amounts:

While the compensation is greater under monthly billing, in neither case is the total compensation equal to the fully loaded PWP price which is closer to 19¢/kWh.  Since under the monthly billing option surplus energy credits are converted to cash (even though they are not paid to the customer until they exceed $50), you actually would lose money every month.  The better option is to roll your excess energy credits forward every month for the year, and that is especially true if you are only a net energy producer in some months, but a net energy consumer in others.

So here are our recommendations, box-by-box, on how to fill out PWP’s form:

1. Provide the required contact information here.
2. Check Yes.
3. Check the top box for “I prefer annual net metering.”
4. Check the box assigning the RECs to PWP.  At this time there does not appear to be a separate market for residential customers for their RECs. However, that is likely to change in the future and at that point you will probably want to rescind this assignment, but for now, you may as well get the extra 2.5¢ (just don’t spend it all in one place!).

It is unfortunate that surplus energy producers cannot receive full compensation for the value of the energy produced - just as it is unfortunate that we are seeing rebates disappear with no feed-in-tariff to take their place.  For now, the above recommendations reflect our best advice on how to maximize your benefit under the existing rules in Pasadena.