California Members: NEM3.0 impact on NEM1/2 customers and what to do?

[time2roll]

I am Ok to receive the average wholesale rate paid to the utility scale power plants instead of full retail. Although with this I also expect to be able to reduce my exports and use the stored energy at other times and without a fee to do it. What I do on my side of the meter should not come with a tax.

 

[Hedges]

Just as soon as PG&E gets to assess an $8/kW/month fee on output capacity of all power producers, retail/wholesale/other.
(Power plants benefit from the grid to deliver power to end users, and they haven't been paying their fair share!)

 

[fafrd]

So PG&E is operating cheap to increase their profit. Their old and poorly maintained equipment fails in a wind storm and starts a fire. And now they get to bill their customers more to pay for the damages they caused, while shutting off power to those customers. Hmmm. Does anyone else see a problem with this?

My January 2022 bill from So Cal Edison came with new higher rates as well. My off peak went from 20 cents to 30 cents, and on peak went from 40 cents to 49 cents. Those are a huge increase. 50% and 22.5% over what they were last year. But by adding the cost there, it is actually making my solar panels worth more. Just think about it. Every kilowatt my panels make is now worth 50% more to not have to buy the power from them. So even if every bit of energy I make is off peak, my 8 megawatt hours I made in one year is now $2,400 worth of electricity. That just dropped the payoff of my solar back under 8 years.

And the DC panels I want to add, which will make the power I use during peak rat, is now going to be generating 49 cent power. It is a smaller system, only 2,500 watts or so. So let's say it will make 1/3 of the power (it should do better, even with battery charging losses) but that's still 2,700 kilowatt hours at 49 cents is over $1,300 USD. If I want this added gear to pay off in 5 years, that gives me a budget of over $6,000 to spend on DC charging my battery bank.

What is going to mess this up is when they start to impose non energy charges. I really do not see how they can justify charging people for just having solar panels. That just needs to go away. But if they charge the rate structure, I can see something like this... Drop the price per kilowatt hour in half, for all customers, but then charge half of an average electric bill for a non solar user in "Grid maintenance charges". What that does is non solar customers pay the same, and even someone making all of their own power still has to pay half even if they never use a single watt hour. I can see some form of that passing, but they will need to be very careful how they word it to make sure it does not throw red flags. I would not object to a moderate fixed charge for keeping the grid available. But it can't be totally put on just solar customers.

And then there is the big debate about wholesale vs retail rate for energy pushed back to the grid. As much as I like getting full retail credit, I can see where this is not fair to the grid operator. Let's be honest, they do not pay any other source at those rates for electricity going to the grid. Going to 25% credit seems a bit low, but not totally out of line either. I think this will push more people to install storage, and make companies work on better time of use management software to allow solar plus storage customers to truly self consume all of our energy we produce. Who cares if they won't pay us for exported energy, if we never export any? Ideally, I want to store all the excess, and then use it all night, and basically run off grid unless my production falls short.

I see it pretty much as you do. Overall, I see 4 different issues that meet to be addressed:

1/ is the 20-year grandfathering that’s been agreed-to for the first 1.4 million NEM1,0 and NEM2.0 customers going to be changed/reduced? That’s a lot of voters and that’s a lot of delay due to lawsuits, so hopefully they ultimately decide not to change the grandfathering terms for existing solar customers.

2/ Export credit: these are almost certainly going down for new installs. 25% of retail? Wholesale pricing? In the end, new systems are almost certainly going to need to be built with ESS large enough to capture a full day’s production for consumption overnight. Until battery prices get much cheaper, that alone is a pretty big hit to break-even.

The export credit is absolutely immaterial for systems that capture 100% of production, so it really only enters into the equation once you consider summertime credits for wintertime consumption.

The more export credit offered during peak-production summer months, the smaller-sized array you’ll be able to get away with to offset annual consumption.

At full retail rates, you can get away with an array sized to match annual consumption.

At wholesale rates, you’ll need to practically double array size to offset most of your electrical bill - a 2X array should generate close to a full-days consumption on clear wintertime days, so the very meager export credits you generate in summer months when your oversized array is generating 2-3 times daily consumption will be used to offset consumption in winter Jen the weather is bad and production is very low/nonexistent.

At 1/4 of retail (which is what the CPUC was proposing before that authorized a rate increase), array size needs to increase by 1.5 lx to 2x in order to offset most of the annual bill…

My point is that whatever they end up deciding as far as export credit, it’s just going to translate into how much larger of an array you need to build (the impact/cost of which is continuously being offset by the trend to ever-cheaper solar panels).

3/ Minimum monthly charges to support a fair share of grid maintenance costs (including, apparently, fire-liability-related costs): this is the stickiest wicket. I think all of us solar customers agree that as long as whatever rules are defined, they apply equally to all customers and not just solar customers, we can live with it. Be it based on service size or peak power level imported or exported annually, any fee structure that charges for the actual benefit of having the grid available for backup is much easier to swallow than the array-size ‘tax’ they have proposed levying on solar customers only. So hopefully we see something more sensible/palatable when the new successor tariff finally gets issued.

And hopefully it also allows solar customers who have designed their solar systems so that they import only and never export to be treated exactly like non-solar customers (no NEM agreement, no special ‘tax’of any kind).

As some consultant wrote in one of the articles I read, how can they propose that you be taxed more on carrots you grow in your garden than carrots you buy at the supermarket?

4/ And the last issue may be rather minor in the context of the changes to export credit: monthly trueup versus annual trueup

Going to monthly trueup treats solar customers just like any other customer, but it absolutely hits the benefit of NEM. Of the export credits are being reduced to near-wholesale levels anyway, it’s really not a big deal (since you’ll need to double your array size anyway), so it’s really only material if they leave export credits at a level that allows summer overproduction to offset wintertime consumption.

As long as we are talking about new agreements only, I’d be perfectly fine with some solar-specific ‘tax’ or monthly grid-benefits charge that is only levied on those solar customers who choose an annual trueup plan (meaning those new solar customers who have invested in a sufficiently-large system to generate most of the power they need even in winter can be billed and tried-up monthly like any other non-solar customer without incurring any special tax or fees).

 

[Ampster]

So PG&E is operating cheap to increase their profit. Their old and poorly maintained equipment fails in a wind storm and starts a fire.

Yes, deferring maintenance is the most expedient short term method to pump up investor earnings. Because the investors already got dividends on those earnings guess who gets to pay? To me that is the structural fault in the CPUC oversight of the IOUs.

 

[Ampster]

So even if every bit of energy I make is off peak, my 8 megawatt hours I made in one year is now $2,400 worth of electricity. That just dropped the payoff of my solar back under 8 years.

That is a good point and illustrates why solar and batteries are still a good hedge against increased rates.

 

[Ampster]

3/ Minimum monthly charges to support a fair share of grid maintenance costs (including, apparently, fire-liability-related costs): this is the stickiest wicket. I think all of us solar customers agree that as long as whatever rules are defined, they apply equally to all customers and not just solar customers, we can live with it.

I could live with a reasonable fixed fee if the funds generated were matched and allocated to making the control systems bidirectional. If those upgrades were made the grid would be more resilient and Virtual Power Plants could be encouraged.

 

[Blinelaxd27]

So if i am understanding everything correctly, if i have my system turned on before june I would be grandfathered into 2.0?

 

[GXMnow]

Yes. Currently, the rules in place are still NEM 2.0 The 1.0 and 2.0 agreements state 20 years, but you might not be able to bank on that. The new NEM 3.0 was talking about cutting it to 15 years, even on existing 2.0 contracts. It was not clear if it would be "up to 15 years, from the date of NEM 3.0" or "cut off at 15 years from PTO". So if a system was installed 2 years ago, I think it would still be under the 2.0 contract for 15 MORE years. So my contract would be cut from 20 to 17 years, it 3.0 went live now. Obviously, if a system is 10 years old, you would just get the remaining 10 years on your existing contract.

 

[fafrd]

Yes. Currently, the rules in place are still NEM 2.0 The 1.0 and 2.0 agreements state 20 years, but you might not be able to bank on that. The new NEM 3.0 was talking about cutting it to 15 years, even on existing 2.0 contracts. It was not clear if it would be "up to 15 years, from the date of NEM 3.0" or "cut off at 15 years from PTO". So if a system was installed 2 years ago, I think it would still be under the 2.0 contract for 15 MORE years. So my contract would be cut from 20 to 17 years, it 3.0 went live now. Obviously, if a system is 10 years old, you would just get the remaining 10 years on your existing contract.

Oh, is was pretty clear - 15 years from PTO.

What they were proposing in the Preliminary Decision was very clear.

Now that the Governor has stepped in, who knows what the final outcome may be.

Changing the rules on and pissing-off 1.4 million Green-leaning voters right before he next election is definitely not the wisest reflection strategy….

 

[Ampster]

pissing-off 1.4 million Green-leaning voters right before he next election is definitely not the wisest reflection strategy….

On the otherhand, who is going to come up with the campaign donations that he got from the IOUs and their unions?

 

[fafrd]

On the otherhand, who is going to come up with the campaign donations that he got from the IOUs and their unions?

Campaign donations are good, but since their only purpose is to garner votes, votes are better…

 

[Calvin98]

I once again want to call a solar strike. A Solar Embargo, if you will. All of us shut off our PV at 2:30 PM on a really hot day. Watch the grid collapse from Calgary to Ensenada (again.) Then PG&E will know who is boss, and they can come groveling, begging us to turn our production back on.

My thoughts also. 2:30 PM it is.

 

[Ampster]

My thoughts also. 2:30 PM it is.

I will do that and more. I will charge one of my EVs and turn on my Electric Oven in cleaning mode. It has been hot here in Northern California all week.

 

[Calvin98]

Is "E-NET" the same as "NEM" or "NEM 1.0"? We got our system in Oct 2002, so coming up on 20 years. Nothing in the papers says anything about a time limit. We have "E-NET." Neighbors also got theirs in 2001 and are over the 20 time and still have basic end-of-year true-up same as when they started. Rates went up of course from 8.5 cents off-peak and 32 cents on peak 30/32 cents or so. They don't have to pay for any power fed back to the grid. Did some people get "grandfathered" in way back in this time period? Some of us many stay in "E-NET" or NEM" forever?

Trying to figure out what all this new stuff is going to mean for us. We also have Sunny Islands with a fork lift battery (17yrs old and still going) and Sunny Boys. Wondering if we have to go completely off grid in the near future to avoid that inverter fee. Looking at lithium server rack batteries but seeing lot of issues with BMS and SI communication. Can handle the wiring, but writing code is beyond me.

Did the war maybe change anyone's ideas in CA about solar power? Last I read the whole NEM 3 thing got kicked down the road to end of this year maybe. This was also all back in FEB and its June now. The world has changed. Even we placed an order for a Tesla that we plan on charging from our solar during the day. We have also changed our loads to run pool pumps, irrigation pumps, AC, etc. all during the day instead of like we used to - run things at night - to minimize what we feed back into the grid if batteries become necessary. Even considering of going all electric and doing away with propane entirely. Never would have guessed.

By the way, the PGE bills say we are enrolled in "NEM."

 

[time2roll]

Far easier to react to any new rules vs spending to avoid the unknown. I will pay the fee, if it ever happens, for at least six months to formulate a plan.

 

[Hedges]

You are supposed to get pushed onto NEM 2.0 after 20 years. (just don't have to pay a connect fee.)
NEM 3.0 was going to shorten that to 15 years and put you on NEM 3.0

The real question for all of us is whether 3.0 will actually tax us on total PV/inverter capacity, even if it is zero (or limited) export, or an off-grid system. Obviously, a $0.05/kWh server rack battery looks mighty attractive compared to a $0.05/kWh photon tax and 4:1 spread between buy/sell of grid power.

 

[Calvin98]

I don't think they did. From what I can tell, they don't pay any extra. Nothing changed on their bill and they are at 21+ years.

Do new PGE bills say "NEM2"?

So if you are in NEM 1 now, you go to NEM 2 or straight to 3 (if and when that is set)?

Right. If inverters are taxed at $8/kw, then it looks like this:

5kw inverter = $480/year tax (fee)
15kw inverters = $1,440/year tax (fee)
20kw inverters = $1,920/year tax (fee)

1st year of tax can pay for 1 server rack battery (5.12kwh) if you have 20kw inverters, say 5x 5,000 watt Sunny Boys.

Neighbors are all at 10-15-20kw by the way.

5.12kwh 48v EGL or SOK battery is $1,700 - $1,900 now.

2nd year tax pays for another battery.

If you have 20ks inverters, by the 5th year the tax will have cost the same as 5 server rack batteries and you could have had 25kwh storage for free after that. Regardless of what you have, battery seems to be the way to go if the tax comes into effect.

Seems it would be better to get the batteries and turn PGE off and go OFF GRID entirely. Good for you, not good for anyone else in California. All the extra power you could make during the day gets throttled by the SI so you only produce what YOU need. That could be a lot if you size your system to provide power for the hottest day in Ca.

What is the KWH of power worth that you can make, but don't?

Would it not be a good idea for PGE to add the batteries so that people with pv can store power into that anyone can use at other times?

If you follow a "use it or loose it plan" (run big loads when the sun is out), 25kwh of batteries can probably get you through the night.

It seems that there will always be a way for you to get tricked. Better mouse traps lead to better mice.

With the price of fossil fuel going up so much and the cost of PV so low, there should be a better solution.

This whole new Tesla Power Wall $2/kwh fee paid to the customer would be great if it applied to other battery systems also.

 

[GXMnow]

I would be very happy to just get paid $0.50 per KWH I export from my battery. $2.00 per KWH would be wonderful. Since I am using and exporting so little, I am in the "baseline credit", which is a negative charge per kilowatt hour used, until you exceed the baseline allotment. But here is the kicker. I am exporting at that point, so the negative gets multiplied by negative power, so my baseline credit is then a positive amount being charged. I think that is really shady. It really only shows up when I have entire days that are negative, but that was happening a lot in spring.

 

[nifty-stuff.com]

Great thread!

Looks like NEM 3.0 got passed earlier this month.

I'm still a little confused by the info I've read (here and other places).

QUESTIONS:

1. I got solar in 2010, and I believe I'm still on NEM 1.0. What's the easiest way to verify this? I don't see it anywhere on my PG&E bill or on my account when I login.
2. Are NEM 1.0 and 2.0 customers grandfathered in for 20 years from the date of installation or from when NEM 3.0 goes into effect in a few months?

THANK YOU!

 

[Ampster]

re NEM 1.0 and 2.0 customers grandfathered in for 20 years from the date of installation or from when NEM 3.0 goes into effect in a few months?

Everything I have read suggests the grandfathering is 20 years from original installation.