Category: SCE

05/04/17

  05:11:00 pm, by Jim Jenal - Founder & CEO   , 497 words  
Categories: All About Solar Power, Solar Economics, SCE, Residential Solar, Ranting, Net Metering

NEM 2.0 is Coming - But Not Before July 1

As a solar installer working in SCE’s territory, we get messages from them on a regular basis, including those regarding the upcoming transition to NEM 2.0.  But the email we received today (actually two copies of it!) was a bit, how shall we say, high-strung?  Here’s our take.

NEM 2.0 will occur when the first of two events occurs: SCE interconnects enough residential and commercial solar projects to reach 5.0% of its total aggregate power demand, or July 1.  We have written before that SCE will never get to the 5% beforehand, so the deadline is 23:59:59 on June 30. 

So we were a tad perplexed to see this email today - here’s a sample:

417 MWs Remaining in NEM 1.0

As SCE gets closer to its Net Energy Metering (NEM) 1.0 Cap, we want to remind everyone of the importance of submitting complete and accurate interconnection request(s) (IRs). You should be receiving similar notifications within the online application system (i.e., PowerClerk).

Why is the 417 MWs remaining important?

For those applicants and customers with an existing IR moving through the interconnection process, we are sharing this information so that you may plan accordingly as SCE approaches its NEM 1.0 Cap. Once the cap is reached, the existing NEM tariff will close to new customers and the NEM 2.0 (NEM Successor) tariff will become available. With approximately 417 MWs remaining in the NEM 1.0 cap, this is a friendly reminder to please submit all documentation necessary for receiving service under NEM 1.0 and do so as soon as possible.

(Emphasis in the original.)

Wow - you would think that this might happen any day now, based on that language.  Except that it won’t - not even close.

Here are the underlying numbers:  SCE’s total cap is 2,240 MWs - a target it has been building toward since 2007!  As of today, in SCE’s territory, 1,823 MWs has been installed.  That means it has taken roughly  3,595 days to install that capacity, which works out to roughly half a Megawatt per day.  With 417 MWs left under the cap, and just under 58 days before July 1, we would have to be installing at the rate of 7.2 MWs/day!  Uh, no.  Just Not Going To Happen!

(If you would like to see exactly how much time we have before we hit the actual deadline, check out the Doomsday Clock on our Residential Solar page.)

However, the reality of that deadline does have consequences.  For potential commercial clients, sorry, but you are out of luck - there is just not enough time to get a new commercial project designed, permitted, constructed, and approved before July 1.

Potential residential clients are in a slightly better position, but only slightly as your window of opportunity is rapidly closing.  For example, we are already booked solid for the entire month of May with just SCE projects (we have pushed everyone else back to try and help as many as possible in SCE territory meet the deadline), and we can only guarantee an approved interconnection for NEM 1.0 by mid-June.  If you’ve been thinking about solar in SCE-land, please don’t wait, call or email us today!

04/29/17

  12:25:00 pm, by Jim Jenal - Founder & CEO   , 1208 words  
Categories: SCE, LADWP, Ranting, Chandler School

Knock, Knock - Who's There?

When you create a website, and beyond that, a blog, you sometime wonder - who is reading this? (Assuming that *someone* is reading it at all!) Capturing site visit data provides you a rough insight into who those folks might be, if you are willing to slog through the data. But heck, you know we love digging into data, so come along and let’s see who is out there!

The raw data, courtesy of Google Analytics, lists the service provider for every visit to the website (including this blog).  For this analysis we looked at data for the first 100 days of this year, a total of 9,983 visits from 7,398 distinct visitors who collectively looked at 12,607 pages.  Some 1,372 different service providers are listed in that data, but they are not categorized in any way - that is a process that must be done manually (ouch!).  The vast majority of the service providers are either not identified at all (39% of the total) or appear to be generic ISPs, such as “time warner cable internet llc".  Without anyway to get behind that lack of information, there is little to be learned from those entries, so we will exclude them and see what we can glean from the rest.

Filtered in that way leaves us with 526 different sources that accounted for roughly half of our visits, 4,845.  Our analysis broke these out into five categories: Company, School, Government, Non-Profit, and Other.  Here’s what that looked like:

sources of visits to Run on Sun

Far and away the largest category of sources are visits from other companies, making up 49% of our sources.  That is encouraging since we provide solar installations to companies, it is nice to know that they are coming to our site!

The next largest source is schools - again, a major target for our marketing efforts - although we were surprised at the number of schools, particularly colleges, that visited.  (We always felt that we had a very educated readership and that would tend to prove that out!)

We have to admit that we were surprised at the large number of government sources, and frankly some of them have us a bit creeped out!  (More on that in a moment.)

The non-profit category was surprisingly small, given the number of phone calls and emails that we get from non-profits across the country.  Apparently there is very little on the internet about solar for non-profits, so lots of folks from far-flung corners of the country find their way to our solar for non-profits page.  Unfortunately we have to tell them that we are a local company and really cannot help them install solar on their church in Peoria!  (But we do point them to the NABCEP website!)

Let’s dig into these categories a bit more and see what we find!

The Company We Keep

There are all manner of companies represented in the data, from 3 Day Blinds to Amazon, Bloomberg, Facebook, Hubspot, Intel, Kaiser, Microsoft, Navigant, NBC Universal, Paramount Pictures, Rolls-Royce (I don’t think they make an EV!), to Yogurtland - and dozens and dozens more in between.

There are two interesting sub-categories: Utilities and other Solar companies.  First utilities - there are 15 of them represented in the data including LADWP, SCE and SoCal Gas.  But there are also utilities from across the country including Duke Energy, Dominion (Virginia) Power, and even the Electric Power Research Institute, which is the think tank for the electric utility industry.

But there are even more solar companies checking us out - certainly a complement of sorts - 16 in all.  Some of these are manufacturers, including Canadian Solar, Hanwha, and even SolarEdge!  Some are distributors, like Krannich, but most are competitors, ranging from nationals like Vivint to regional players like Sullivan Solar Power.  Hey guys, don’t be shy, feel free to leave a comment!

Somebody’s Watching Me…

Remember that song?  Looking into the Government category turned up a few, kinda creepy, surprises.  For example, we got visits from a number of military-affiliated sources like the 754th Electronic Systems Group which is located at the Hanscom AFB in Massachusetts, and has the following mission statement:

Deliver integrated information driving war winning decisions by shaping, acquiring, and sustaining warfighting IT capabilities through responsive, adaptive and cost-effective logistics, enterprise services and infrastructure solutions—to fly and fight in air, space and cyberspace.

Yikes!  Not sure what that has to do with a website about PV in SoCal, but they visited three different times! Or there is the DoD Network Information Center (four visits, Google them if you are into conspiracy theories!), the Navy Network Information Center (five visits), and the Headquarters USAISC (two visits).

There were also some really cool government sites including CERN, NREL, NASA (though NASA’s may have been my daughter!), Lawrence Berkeley National Laboratory - even one hit from the U.S. Senate (welcome to D.C., Senator Harris!).

The largest government category, however are various municipalities, with 27 different towns, cities and counties dropping by, including locals like Pasadena, LA (city and county), Santa Monica, Anaheim, etc.  But also some from far away like Boston, San Francisco, and Westchester County. 

Various states stopped by as well, including: Washington, D.C. (I know, it’s not a state, but it should be, so there), Maine, Maryland, New York, New Mexico, and Utah, to name a few.  Fun!

No Profit Here

The non-profit category was very small, but interesting.  While there were a handful of churches, including my favorite, Yosemite Church - the setting alone should be inspiring! - the more interesting fact was that the largest sub-category was related to medicals services, including six hospitals!  Hey we’ve never put solar on a hospital, but we would love to help you out!

School Me

Which brings us to our final category, schools.  99 of our sources were categorized as school related, with sub-categories of school districts, elementary schools, and colleges.  There was only one elementary school in the mix, our client, Chandler School.  Interestingly, there were 27 school districts in the data from all over the country ranging from LAUSD to the Cambridge Public Schools.

Our connection to colleges, however, was truly amazing with 70 different schools showing up.  Lots of famous names in this list including our neighbor Caltech, USC, UCLA (along with roughly half of the overall UC system!), Stanford, American University (Go Eagles!), Duke, Johns Hopkins, LMU (my alma mater), NYU, Princeton, Rutgers, Notre Dame, University of Utah (my second alma mater!), even Oxford!  Wow, I feel smarter already.

Most of these sources provided just one visit - they hit a given page and then left.  But some sources were more, shall we say, studious.  For example, we only got one hit from Azusa Pacific University (located at the very end of the Gold Line), but they looked at 11 different pages in the three minutes that they were on the site.  (Average duration on the site overall was 55 seconds.)  The winners for most time on site were Notre Dame (one visit, seven pages, more than 20 minutes) and Colorado State (one visit, five pages, 18 minutes).  It is quite rewarding to see that the resource that we have created can have real value for people, especially (we presume here) students. 

So that’s it - thanks to all who visit this site, we appreciate your time and interest.  We hope we will continue to provide a resource that brings you back - well, except for the creepy ones!

10/28/16

  12:14:00 pm, by Jim Jenal - Founder & CEO   , 1654 words  
Categories: All About Solar Power, PWP, SCE, Residential Solar, Ranting

Understanding Tiered vs TOU Rates

A client of ours noted that Pasadena Water and Power (PWP) offers, in addition to its regular, Residential tiered rate structure, the option to switch to a Time-of-Use rate structure, and he asked if he would derive additional savings from making that switch. Turns out that is not an easy question to answer, and there certainly isn’t a “one size fits all” result. We decided to take a closer look into these rates both for PWP and for the folks in Southern California Edison (SCE) territory.

SPOILER ALERT - The following is pretty much down in the weeds.  You have been warned!

Defining Tiered and Time-of-Use (TOU) Rates

Let’s start by defining our terms. Most residential electric customers, of both PWP and SCE, are on a tiered rate structure. That means that there are two or more cost steps - called tiers - for the energy that you use. Tiered rates assume that there is some minimally expensive charge for the first allocation of energy per billing cycle, and that as you use more energy your cost for energy increases. For example, SCE’s Domestic rate has three tiers and in the first tier the charge is 8.8¢/kWh, in the second tier the charge is 16¢/kWh, but the final tier is 22.4¢/kWh! (There  is also a non-tiered component that adds another 6.9¢/kWh to the customer’s bill.)

PWP, on the other hand, has a somewhat perverse tier structure in that the lowest tier is very cheap, 1.7¢/kWh, the second tier is significantly higher, 13.5¢/kWh, but the final tier actually goes down to just 9.9¢/kWh! Since the whole point of tiered rates is to provide an incentive for heavy users to reduce their usage, PWP is actually rewarding those who consume more than 25 kWh per day with lower rates! Very odd.

Time-of-use rates, on the other hand, are generally not tiered. Instead, the day is broken up into segments and the cost of energy varies depending on the segment in which it is consumed. PWP refers to these segments as “On-Peak” (from 3-8 p.m.) and “Off-Peak” (all other hours). But PWP’s TOU rate retains the tiered element as well, making it a truly odd hybrid rate structure.

SCE’s approach is more involved, dividing the day into three, more complicated segments: “On-Peak” (2-8 p.m. weekdays - holidays excluded), “Super Off-Peak” (10 p.m. to 8 a.m. everyday), and “Off-Peak” (all other hours).

For both PWP and SCE there is a seasonal overlay on these rates, with energy costs increasing in the summer months (defined as June 1 through September 30).

(It is important to note that both PWP’s and SCE’s TOU rates put the most expensive energy in the late afternoon to evening time period - pricing energy to offset against the “head of the duck.” Ultimately, these rates will create the energy storage market in California, but that is a post for another day.

Analyzing the Benefits of a Rate Switch - Pre-Solar

Assuming that one can create a spreadsheet to model these different rates (not a small task in and of itself!) there is one more hangup - data. Both PWP and SCE report total monthly usage to customers on their tiered rate plans - but in order to analyze your potential bill under a TOU rate, you must have hourly usage data for every day of the year! (Because there are 8,760 hours in a [non-leap] year, such a usage data collection is typically referred to as an 8760 file.)

The standard meters that PWP has installed simply do not record that data, so the average PWP customer has no way to know whether they would save money by making the switch.

On the other hand, most SCE customers do have access to that data and they can download it from SCE’s website.

After you create an account, login to it and go the “My Account” page. On the left-hand-side you will see some options - click on “My Green Button Data” (the too cute by half name for the interval data you are seeking), select the data range for the past twelve months, set the download format to “csv” and check the account from which to download. Then press the “download” button and cross your fingers - in our experience, the SCE website fails about as often as it actually produces the data that you are seeking!

Modeling PWP

Given that PWP doesn’t have data available, is there any way to estimate what the results might be? The answer is, sort of. We took an 8760 data set from an SCE customer and used that as our test data for both PWP and SCE. (The data file does not identify the customer.) Since the data file has an entry for every hour of every day, we can segment the usage against the On-Peak and Off-Peak hours, and using a pivot table - probably the most powerful took in Excel - we can summarize those values over the course of the year, as you see in Figure 1.

PWP segmented usage

Figure 1 - Usage Profile for PWP

Summer months are highlighted in orange. For this specific energy usage profile, Off-Peak usage is more than twice that of the On-Peak usage (9,806 to 4,009 kWh respectively). So how does that work out when we apply the two different rate structures? The table in Figure 2 shows the details of the two rates:

PWP standard and TOU rates

Figure 2 - PWP Rates - Standard Residential and TOU

Under both rate plans, the distribution is tiered (with the perverse reverse incentive for usage above 750 kWh). Added to that is either the seasonally adjusted flat rate for energy, or the seasonally adjusted TOU energy charge.

Applying those rates to the Usage Profile in Figure 1 allows us to see what the energy and distribution components would be under both approaches. Given the hybrid nature of these rates, you might expect them to be similar and you would be correct. The distribution charge - which applies to both - comes to $1,180 for the year. The flat rate energy charge comes to $893, whereas the TOU charge is $985. Meaning that someone electing to use the TOU rate would have a yearly total of $2,165, whereas the flat rate user would have a total bill of $2,074, making the TOU rate - for this specific energy profile - 4% higher.

Beyond that, PWP has a number of other charges - such as a public benefit charge, an underground surtax, and a transmission charge - that are only tied to total usage, so the ultimate difference between these two rates is even smaller.

Modeling SCE

SCE rate structures are significantly more complicated that PWP’s. For example, the tier 1 (aka baseline) allocation varies by location. Since SCE covers such a huge and diverse area from cool coastal regions to absolute deserts, customers are allocated more energy per day in their baseline depending upon where they live. In the area around Pasadena that is covered by SCE, a typical daily baseline allowance would be 13.3 kWh in the summer and 10.8 kWh in the non-summer months. The baseline then is that number times the number of days in the billing cycle. Tier 2 applies to every kWh above baseline, but below 200% of baseline. Tier 3 applies to everything beyond that. As with PWP, the tiered rate only applies to “delivery” charges. The energy generation charges are the same all year. Here’s what that rate structure looks like:

SCE Domestic Tiered rate

Figure 3 - SCE’s Tiered Domestic Rate

The first thing that you notice when you look at this rate is how much higher it is than the rates from PWP, and the end calculation bears that out - the same usage that resulted in an annual bill of $2,074 in Pasadena becomes $3,227 once you cross the border into Altadena, South Pasadena, San Marino, or Sierra Madre - an increase of 56%! (There’s a reason why a growing percentage of our clients are coming from those surrounding, SCE-territory communities!)

So what would happen if this beleaguered client were to shift to a TOU rate? First, we need to re-parse the usage data according to SCE’s more complicated segmentation scheme, which gives us Figure 4:

SCE segmented usage data

Figure 4 - SCE’s Segmented Usage Data

Once again, the On-Peak usage is the smallest category of the three, amounting to just 23% of total usage, compared to 42% in Off-Peak, and 35% in Super Off-Peak.

Of course, SCE can’t do anything in a simple fashion, so they have not one but two basic approaches to their TOU rates, Option A and Option B.  Option A rates run from a low of 13¢/kWh (in summer Super Off-Peak), to 29¢/kWh (during summer Off-Peak) to an eye-popping 44¢/kWh (during summer On-Peak).  However, Option A includes a credit of 9.9¢/kWh on the first baseline worth of energy which reduces the monthly bill by roughly $30.

Option B deletes that baseline credit and replaces it with a “meter charge” (even though it is the same meter!) of 53.8¢/kWh/day, or roughly $17/month.  In return, the On-Peak charges are significantly reduced from 44¢/kWh to just 32¢/kWh.

So how does this shake out?  The results are quite surprising, as shown in Figure 5.

SCE rate comparison - Tiered vs TOU

Figure 5 - SCE Rate Structure Comparison

The two left columns show the month-by-month calculations for both delivery (the tiered component) and generation (the flat component).  The two right columns show the month-by-month calculations for the two different TOU rates.

The bottom line is striking: under TOU-A there is a savings of 5% over the tiered rate, whereas the savings jump to 19% by going to TOU-B!  That is a savings of $600/year just by changing rate plans - a switch that any SCE customer can make.

MAJOR CAVEAT: YOUR MILEAGE WILL VARY!

The results displayed here are entirely dependent on your actual energy usage and no two usage profiles are alike.   It is possible, even likely, that some usage profiles will see an increase in bills under either TOU option.

The good news is, that for a nominal fee,  this is an analysis that we could do for any SCE residential customer - we would just need access to your usage data.

So that completes our pre-solar analysis. In our next post, we will look at how these results change when you add a solar power system into the mix.

02/01/16

  03:12:00 pm, by Jim Jenal - Founder & CEO   , 1953 words  
Categories: Utilities, SCE, Ranting, Net Metering

Net Metering 2.0 Explained

On January 28 the California Public Utilities Commission (CPUC) voted 3-2 to adopt new rules governing what is known as Net Energy Metering, thereby creating the framework for Net Energy Metering 2.0 (NEM 2.0).  Here is our take on what the CPUC did, and didn’t do.

What Hasn’t Changed

The first and most important thing to know is that for many people, the new rules adopted by the CPUC will not affect you at all!  These new rules only directly apply to customers of the three investor owned utilities (IOUs): SCE, PG&E, and SDG&E.  If your electrical service is provided by one of the municipal utilities - like PWP or LADWP - nothing that the CPUC did last month will directly affect you since the CPUC does not have jurisdiction over the munis.  (That said, the munis often follow the lead of the CPUC, so it is entirely possible that they will individually adopt their own version of NEM 2.0, but that will be a discussion for another day.)

Even for solar clients in the service territory of one of the IOUs, if you have already signed a net metering agreement, you will be grandfathered in and allowed to continue to operate under the old rules for 20 years.  Once the 20 years have elapsed, you will be transitioned to the net metering rules (NEM 5.0?) then in effect.

Beyond all of that, even for new solar clients in IOU territory, these new rules do not go into effect right away.  Rather, the old rules will still apply until your utility reaches their 5% of customer aggregate demand cap, or July 1, 2017 - whichever comes first.  In SCE territory it is an open bet as to which will occur first (see more below).

Bottom line: this is not happening right away, so you still have time to benefit from the existing rules.

What is Going to Change

Net metering is changing

Net metering is changing!

Proposals

Lots of people weighed in on NEM 2.0 including all three IOUs, CALSEIA, NRDC, and various advocates for rate reform and consumer protection.  While some of the proposals, and their proponents, were entirely predictable, others were not, and at least one such position was seriously disappointing.

For example, the three IOUs all advanced proposals that would have significantly reduced the value of going solar.  SCE wanted to reduce the rate for energy exported from full retail to just 7¢/kWh (with a 1¢ adder if you give SCE your renewable energy credits), plus a $3/kW/month “grid access charge", and a one-time $75 interconnection charge.  (SDG&E’s proposal was even worse, seeking a $9/kW/month charge!) On top of that SCE wanted to eliminate virtual net metering altogether.

At the other extreme, the “solar parties” (such as CALSEIA and The Solar Alliance) advocated for keeping net metering at full retail value.  However, in a nod to changing realities, they did support paying on nonbypassable charges (more on that mouthful in a minute) but not until after 2019.

Still, there was one proposal that strikes us as entirely reasonable which CALSEIA opposed - mandatory warranty periods.  Back when the California Solar Initiative was in place (i.e., when SCE was paying rebates), solar contractors were required to provide a ten-year warranty on their work in order to participate in the program.  With the demise of the CSI program, technically that warranty requirement also went away.  As part of the NEM 2.0 rulemaking, ratepayer advocates advanced the notion of restoring the warranty requirement - a common sense request that no one should oppose.

But the “solar parties” did oppose it, asserting that such a requirement could “discourage innovation in product offerings."  Seriously?  What “product” might we reasonably want to offer that having to stand behind it would be discouraging? When pressed about this position during CALSEIA’s NEM 2.0 webinar, Brad Heavner, CALSEIA’s policy director, said that the view was that the market could decide this: presumably if a company didn’t offer a warranty and that was important to the customer, they would go with a different company.  This was not, however, a position that CALSEIA pushed hard to win, and in the end, they lost on this point.

In our view, opposing a mandatory warranty paints solar in a bad light.  It puts the industry on the side of those who do the least reliable work, and penalizes those companies who go the extra mile to install systems that will stand the test of time.  From what we have seen it is tough enough to get a company to honor its warranty commitments, let alone relying on the “invisible hand” of the market to protect consumers.  CALSEIA did a lot of great work on NEM 2.0, but this position was a mistake.

Decision

The ultimate decision is a major defeat for the IOUs, and a partial victory for the solar industry.  For the IOUs, they clearly overplayed their hand, advancing proposals that were so clearly anti-solar that the Commissioners couldn’t really take them seriously.  According to a CALSEIA webinar, toward the end of the proceedings the IOUs suggested an energy export feed-in-tariff which, if they had proposed it at the start, might have gained traction.  Something to think about as we look toward subsequent iterations on NEM rules.

The solar industry retained full retail value for energy exports, but they also saw three changes that undercut somewhat the value of that victory: nonbypassable charges (NBC) for all energy taken from the grid, one-time interconnection fees, and mandatory time-of-use (TOU) rates.  Let’s look at each in turn.

Nonbypassable Charges (NBCs)

As part of their rate schedules, the IOUs have certain rate components that are known as nonbypassable charges or NBCs.  For example, if you were to look at SCE’s Domestic Rate schedule tariff page (check out page 3), you would see a whole host of factors that go into making up the rate that the customer ultimately pays.  The decision affects three of those NBCs: the Nuclear Decommissioning Charge, the Public Purpose Programs Charge, and the Department of Water Resources Bond Charge.  The sum of those three charges for an SCE residential rate payer  comes to 2.224¢/kWh.  (The lion’s share of which is the charge for public purpose programs, such as bill assistance to people on limited incomes.)

Under the old rules, solar customers would only pay for these charges on the net energy that they consumed in a month.  So, if your consumption was 1000 kWh per month, and your solar system produced 800 kWh, you would only pay these charges on 200 kWh, about $4.45.  Under the new rules, however, every kWh that you pull from the grid, whether it is ultimately netted out by energy you exported, is subject to NBCs.  Sticking with the same example, of the 800 kWh that you produce, imagine that 500 kWh of that are consumed at your home and the remaining 300 kWh are exported.  Meaning that you imported a total of 500 kWh from the grid.  As a result, under NEM 2.0 you will pay NBC on 500 kWh — raising the charge from $4.45 to $11.12, and increase of $6.67/month on the solar customer’s bill.

The relatively small impact of the NBCs is due in part to solar industry lobbying that held the line at around 2¢/kWh versus a proposal, apparently favored by the two dissenting Commissioners, to include more charges that would have brought the total above 4¢/kWh.  (Indeed, we are told that keeping the NBCs at 2¢/kWh is what caused those two Commissioners to vote against the final package.)

Frankly, we think the NBC costs are fair.  The programs supported by the NBCs are a public benefit and all other customers pay for those based on every kWh they pull from the grid.  Under the new rules, so will solar customers.  Of course, if you are in a lease and only saving $20/month from your old bill, this is a much bigger hit.  Yet another reason to avoid leasing!

One-Time Interconnection Fees

Also reasonable was the imposition of one-time interconnection fees to be set based on the IOUs actual cost of handling the interconnection.  The CPUC estimates that the fee will be somewhere between $75-150.  (Recall that SCE advanced a $75 fee as part of its proposal, so it will be fascinating to see if they try to come back for a higher fee now!)

Mandatory TOU Rates

The biggest hit to solar mandated by the NEM 2.0 rules was the requirement that solar customers get switched over to TOU rates.  (SCE is moving all customers to TOU rates eventually, but that target date is 2019.)  Under TOU rates, you pay more for your energy depending upon the time of day when you use it, as opposed to being on a tiered rate schedule where you pay more when you use more during a billing cycle.  For residential customers, SCE sets its peak charge time as the hours between 2 and 8 p.m., and Noon to 6 p.m. for commercial customers.  This means that, for residential customers, solar exported to the grid before 2 p.m. will be valued less than energy that needs to be pulled from the grid after the sun goes down, but before 8 p.m.

It is this change to the rate structure, and to a lesser extent the imposition of the full NBCs, that makes intelligent energy storage that much more valuable.  With smart storage, you won’t export energy during the day, you will store it for later use.  That reduces the total amount of energy pulled from the grid (lowering the NBCs) and allows you to shift the availability of the energy to the evening so as to avoid peak TOU rates altogether.  There can be no doubt that this is the future for how solar installations under NEM 2.0 (and likely beyond) will be the most cost-effective.  We are optimistic that by the time NEM 2.0 goes into effect for SCE clients in our service area, we will have an intelligent storage solution to offer.

Timing

So when does all of this go into effect?  As we noted above, at the very latest, the new rules go into effect on July 1, 2017. Most likely, however, they will go into effect sooner than that since the actual start date is tied to when the IOU reaches its 5% cap.  In SCE territory, the following NEM report is informative:

SCE's NEM report

SCE’s total customer aggregate demand, the basis for the 5% cap, is 44,807 kW.  5% of that is 2,240 MW of solar installed.  As of the end of December, 2015, SCE had 1,388 MW of solar either installed or with net metering agreements in place, leaving 852 MW remaining under the cap.

The report also shows that applications for 48.1 MW of new solar were received during the month of December.  If we take that number as  a fair monthly average, we can expect SCE to reach its cap in 17 to 18 months. So to lock-in your system under the existing rules, you will need to have your net metering application complete and on file with SCE before then (May-June 2017).  We will continue to update on the status of SCE’s progress toward its cap.

Final Thoughts

On the whole, the solar industry dodged a bullet, especially when you look at the latest battles over NEM in other states, like Nevada.  This success is a tribute to the thousands of people who took the time to advocate for solar, whether they be our trade association, CALSEIA; individual solar companies, like Run on Sun; or solar customers who reached out to inform the Commission of the true value of solar.  Not lost in the debate was the importance of solar as a job creation engine in California.

Moreover, the political climate in California, from the Governor on down, has been strongly supportive of solar and they deserve our thanks as well.

We would love to hear your thoughts and if you have questions that haven’t been answered here, please leave them in the comments and we will do our best to address them.

01/12/16

Who is Paying You to Go Solar in 2016?

Show me the money!The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area.  (You can read more detail about all of these incentives on our Solar Financing page.)

Federal Tax Credit

Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit.  Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019

The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you.  (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.)  For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility.  Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.

Utility Rebates

Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions.  We have rank ordered the local utilities below, based on the reliability of their rebate program.

Pasadena Water & Power

The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power.  Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.

As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit).  Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system.  Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.

Los Angeles Department of Water and Power

LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.

That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits.  Just don’t hold your breath.

Burbank Water & Power and Glendale Water & Power

These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.

Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year.  Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.

Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15.  In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.

Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.

We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.

Azusa Light & Water

The “Solar Partnership Program” in Azusa is fully subscribed.  There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.

Anaheim

The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.

Southern California Edison

SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated.  Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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