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

[Zwy]

Here in Iowa, the local electric coops in rural areas had been paying $0.10 per Kwh on excess production exported whether wind or solar. My brother had purchased a used 5Kw windcharger and decided to finally install it. He had to carry insurance for it and have it fully inspected plus all wired by a state licensed electrician, which he was lucky as we have a cousin that is licensed.

After about 3 years, the local electric coop was able to eliminate those export contracts by merging with an out of state coop in Minnesota. Only net metering was allowed, my thoughts are this will end soon enough too as more solar comes online. He currently locks down his windcharger once he hits his net meter total for the month to prevent wear and cut down on maintenance which he wouldn't get paid for.

With the CA ban on fossil fuel gensets, how will this all end? Basically it is a move by utilities to grab more power with the utility monopoly.

 

[Hedges]

I’ve not seen any proposal that $/kW consumed will be higher for solar customers than non-solar.

Even though you are already paying that yourself, today?

Only that the credit we get for exported energy will be gutted to ~25% of cost per kWh consumed.

So you’ll need to export 4 times more kWh per day to stay even with where you are today in terms of export credits.

I was OK at 3 times (off-peak vs. peak rates). Now it will probably 3 x 4 = 12 times.

This is the showstopper for me. If this monthly solar generation ‘tax’ gets imposed only on NEM customers, I will be decommissioning my NEM system and going back to being a non-NEM customer.

Note that this will be a charge on production capacity, not on consumption. Not clear it is on export.
Wanna bet they will still charge same fee for any zero-export capacity?

"We find the name “Grid Participation Charge” sends a clear message to the customer that they are paying to use the grid. The charge will be a fixed monthly charge based on the number of kilowatts installed in a residential customer’s system."

3/ 75% reduction in Export Credit. This will pretty much force solar customers to add a battery holding at least a full night’s worth of energy and a hybrid inverter that can use that stored energy to offset nighttime consumption. Small advantage to being a NEM customer despite this change because you do not need to be concerned with avoiding export during daylight hours and 25% credit is better than 0%.

Even with credit for export 25% of rate for buying power, batteries don't save you money, at least not much.
When I considered my 3:1 price difference between peak and off-peak, I said PV panels cost $0.025/kWh amortized over 10 years, an LiFePO4 cells cost $0.05/kWh over their cycle life which is about 10 years. Balance of system costs vary, but so to useful life. If 4:1 price difference in the future you might eke out a small savings, but not worth it.

If you can put in 4x the panels, just do that and use net metering as your "battery". (assuming you do NOT also get hit with the $8/kW/month penalty. Which you do.)
If you can't add panels, then batteries are worthwhile to avoid paying $0.50/kWh.

Let's look again at what $8/kW/month means:
I say you can buy all hardware for a grid-tie system for $1/watt, e.g. $5000 for a 5kW system.
5 kW x $8/kW/month x 12 months/year x 10 years = $4800

The tax is as much as the system hardware!!
(over 10 years).
Useful life ~ 20 years, or more. Expect inverter to need replacement at 15 years give or take, system lasts 30 years)

Over 20 years, the tax is 2x what system costs. Over 30 years, tax is 3x.

I wonder how this impacts new homes that have required solar installed.

<--- PUC and PG&E


I just read/searched/skimmed through the PUC document.
As they say about sausages and laws ...

 

[Hedges]

My system is around 17 years old now. Expected to be put on NEM 2.0 in a couple years, looks like I'm past due for NEM 3.0, they'll probably backdate my transition two years.

 

[fafrd]

Here in Iowa, the local electric coops in rural areas had been paying $0.10 per Kwh on excess production exported whether wind or solar. My brother had purchased a used 5Kw windcharger and decided to finally install it. He had to carry insurance for it and have it fully inspected plus all wired by a state licensed electrician, which he was lucky as we have a cousin that is licensed.

After about 3 years, the local electric coop was able to eliminate those export contracts by merging with an out of state coop in Minnesota. Only net metering was allowed, my thoughts are this will end soon enough too as more solar comes online. He currently locks down his windcharger once he hits his net meter total for the month to prevent wear and cut down on maintenance which he wouldn't get paid for.

With the CA ban on fossil fuel gensets, how will this all end? Basically it is a move by utilities to grab more power with the utility monopoly.

There are a few moving parts here, but the one I was most concerned about was an abrupt change in the terms/economics for the ~1 million of us who have already bought into solar based on the understanding we were ‘locking-in’ our rates/terms for 20-years.

That being reduced to 15 years isn’t good, but it’s far less of a disaster than it could have been.

I have another 10 years, and about the only thing I am certain about 10 years from now is that cost/kW for solar and cost/kWh of energy storage will both be much cheaper than they are now.

Also, since today’s CPUC ‘decision’ was really only a preliminary ruling on the final rules they expect to approve next month, I see it as a worst case and figure it can only improve from here.

As far as what the successor means, it means the value of grid export has dropped dramatically and you’d be better off to invest in a battery to store and use your own solar generation rather than exporting to grid (in which case you don’t need any agreement with the utility).

I’ve been looking at this already and from my analysis, if you own an EV with V2L capability, it will cost you less to offset as much consumption as possible with a zero-export hybrid inverter and a modest amount of battery capacity than to enter into an export agreement under the new terms that are being proposed.

The only benefit of NEM was that it allowed you to size your array to cover annual consumption rather than sizing it to convert consumption during worst-case generation months of December/January.

So yeah, you’ll need to invest in a bigger array and a modest-size battery, but with where price trends are headed, that’ll be far preferable to using the grid as a ‘battery’ but at a cost/tax of ~50% of what you were paying before you had solar…

 

[fafrd]

Even though you are already paying that yourself, today?

Don’t understand - what do you mean? From what I’ve understood, all PG&E customers will be transitioned to 4-9pm peak TOU plan by 2022…

I was OK at 3 times (off-peak vs. peak rates). Now it will probably 3 x 4 = 12 times.

I’m on E6 where peak is $0.45/kWh and off-peak is $0.20/kWh (so 2.25x).

If they dropped export credit to $0.05/kWh, it would be 4x export versus off-peak import (I’m covering peak consumption using my battery & GTIL inverters),

Note that this will be a charge on production capacity, not on consumption. Not clear it is on export.

Not sure which charge you are talking about - the ‘grid benefits charge’ is a tax on potential production capacity ($/kW of array).

The export credit is going to be dramatically reduced within the successor tarrif. Not clear exactly how much and according to what rules, but the ‘Avoided Cost Calculator’ is certain to translate to much lower credit/kWh exported to the grid…

Wanna bet they will still charge same fee for any zero-export capacity?

You can install solar panels, a hybrid inverter and a battery without informing the utility. How will they know you are reducing consumption through use of solar generation (as opposed to just being extremely miserly with electricity consumption?).

The worst I’m expecting is a minimum charge per month for ANY customer connected to the grid (which I have no problem with).

"We find the name “Grid Participation Charge” sends a clear message to the customer that they are paying to use the grid. The charge will be a fixed monthly charge based on the number of kilowatts installed in a residential customer’s system."

Yes, which is why when 10 years have passed and my NEM1.0 terms are ending, I’ll be informing PG&E that I’ve decided to decommission my solar system and want to return to being a plain ol’ non-solar customer…

Even with credit for export 25% of rate for buying power, batteries don't save you money, at least not much.

I’m my case, the ‘Grid Benefits Charge’ adds up to 50% of my annual electricity bill before I added solar.

So with a battery such as an EV to store up excess AC solar energy without exporting it and then using that stored energy to offset consumption after the sun has gone down, I’ll be saving that ~$384/year (or at least down to whatever minimum monthly bill PG&E imposes on all customers).

When I considered my 3:1 price difference between peak and off-peak, I said PV panels cost $0.025/kWh amortized over 10 years, an LiFePO4 cells cost $0.05/kWh over their cycle life which is about 10 years. Balance of system costs vary, but so to useful life. If 4:1 price difference in the future you might eke out a small savings, but not worth it.

If you can put in 4x the panels, just do that and use net metering as your "battery". (assuming you do NOT also get hit with the $8/kW/month penalty. Which you do.)
If you can't add panels, then batteries are worthwhile to avoid paying $0.50/kWh.

That is the point. The $8/kWh/month ‘tax’ is a huge incentive to get storage and rely on the grid only to cover peak power demand and power during overcast spells.

Cover your average consumption with a battery and some panels, ‘use’ the grid only for backup when you need it, have as little to do with your utility as possible, and you’ll be doing as well as you can (at lowest capital costs possible).

Let's look again at what $8/kW/month means:
I say you can buy all hardware for a grid-tie system for $1/watt, e.g. $5000 for a 5kW system.
5 kW x $8/kW/month x 12 months/year x 10 years = $4800

The tax is as much as the system hardware!!
(over 10 years).
Useful life ~ 20 years, or more. Expect inverter to need replacement at 15 years give or take, system lasts 30 years)

Over 20 years, the tax is 2x what system costs. Over 30 years, tax is 3x.

That’s the point I’ve been trying to make - that monthly ‘fee’ per kW of solar panels is a showstopper. It kills the value of NEM. They state that they want to incentivize more solar customers to add storage and that’s exactly what they are going to get (without export agreements).

<--- PUC and PG&E


I just read/searched/skimmed through the PUC document.
As they say about sausages and laws ...

Don’t know what they say about sausages and laws.

What I know is that this is a clear signal to us legacy customers that we need to start preparing for a ‘grid-assist’ future…

I’ve been planning to get an EV in the next couple years anyway, and when I plug that big mobile battery into the equation (with the V2L capability that is just now starting to reach the mainsteam of the EV market), I’m actually pretty excited about what the future holds (without any role for PG&E other than selling me backup power when I need it).

 

[fafrd]

My system is around 17 years old now. Expected to be put on NEM 2.0 in a couple years, looks like I'm past due for NEM 3.0, they'll probably backdate my transition two years.

You’ll be on the forefront, for sure.

If you are already past 15 years from your original activation date, you’re probably going to get moved to the successor tariff as soon as they have their ducks in a row.

I believe you consume a great deal more than me (air conditioners, right?) but have you thought about ways to capture enough energy to power yourself through the night?

What % of your annual consumption (at off-peak rates) would that $8/kW/month tax translate to in an annual basis (close to 50% in my case…).

Do you own an EV?

 

[Hedges]

Don’t know what they say about sausages and laws.

Laws are Like Sausages. Better Not to See Them Being Made – Quote Investigator®

quoteinvestigator.com

I read as much as I could stand of that tortured PUC document.

 

[Hedges]

I don't even know how much I consume. Occasionally at the end of the day I'll glance at production numbers on the PV inverters and add them together in my head.

Switching to zero export could be an option. That will mean buying whatever power I don't produce at the moment I need it. Once I see how much that is and what it costs me I could do the math on storage. My present AGM batteries are only for backup; at $0.50/kWh not cost effective for shifting when power goes through the meter or banking self-generated power. My biggest use of net metering was burning off surplus electricity for heat, instead of natural gas. I'll just flip that switch back. I'll consider finding a way to use electric heat as an alternative to curtailing PV production.

Air conditioners I tend to run with power as I produce it. If there's no sun I don't need it. Heat, on the other hand, I like in the evening but avoid if possible due to rates. Pool pump I used to run overnight when least demand on the grid, now I'll run as long as I produce.

The whole thing about producing surplus electricity during the day and charging EV with the credits at night just got thrown out the window. With NEM 3.0 you have to give them 4 kWh during middle of the day to get 1 kWh at night, and just with the feed in credit being 25% of retail that is break-even, no savings. Add the other charges and it is a money-losing proposition.

Wonder if San Jose gets to claim all the benefits of these rule changes, since they are the local utility now? Buy power for $0.25 on the dollar, sell it to your neighbor for a fat markup.
Adjacent parcels can aggregate. Wonder if I can make a deal with my neighbor where if I produce a kW and he consumes a kW, it never gets 75% skimmed off the top by the utility? It would work if we were the same person, now just need it to be a co-op. Keep the money for us instead of giving it to San Jose or PG&E.


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.

 

[fafrd]

I don't even know how much I consume. Occasionally at the end of the day I'll glance at production numbers on the PV inverters and add them together in my head.

Switching to zero export could be an option. That will mean buying whatever power I don't produce at the moment I need it. Once I see how much that is and what it costs me I could do the math on storage. My present AGM batteries are only for backup; at $0.50/kWh not cost effective for shifting when power goes through the meter or banking self-generated power. My biggest use of net metering was burning off surplus electricity for heat, instead of natural gas. I'll just flip that switch back. I'll consider finding a way to use electric heat as an alternative to curtailing PV production.

Air conditioners I tend to run with power as I produce it. If there's no sun I don't need it. Heat, on the other hand, I like in the evening but avoid if possible due to rates. Pool pump I used to run overnight when least demand on the grid, now I'll run as long as I produce.

The whole thing about producing surplus electricity during the day and charging EV with the credits at night just got thrown out the window. With NEM 3.0 you have to give them 4 kWh during middle of the day to get 1 kWh at night, and just with the feed in credit being 25% of retail that is break-even, no savings. Add the other charges and it is a money-losing proposition.

Wonder if San Jose gets to claim all the benefits of these rule changes, since they are the local utility now? Buy power for $0.25 on the dollar, sell it to your neighbor for a fat markup.
Adjacent parcels can aggregate. Wonder if I can make a deal with my neighbor where if I produce a kW and he consumes a kW, it never gets 75% skimmed off the top by the utility? It would work if we were the same person, now just need it to be a co-op. Keep the money for us instead of giving it to San Jose or PG&E.


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.

Believe me, it all starts to pencil out a lot more favorably when you add a V2L-capable EV into the equation…

I’ll be interested to see what you decide to do since I believe you’ll be on the bleeding-edge (what with you 17-year legacy and all…).

 

[Ampster]

So the laws mandating solar in new homes require that it be grid-tied?

My understanding is the law says new homes need to be Net Zero. I am not clear how that is caculated or whether it requires a grid tied system. I just got a PTO a few months ago so I will have 14 years on NEM 2.0.
I am contemplating adding more solar but limiting my export to the amount in my PTO.

 

[fafrd]

My understanding is the law says new homes need to be Net Zero. I am not clear how that is caculated or whether it requires a grid tied system. I just got a PTO a few months ago so I will have 14 years on NEM 2.0.
I am contemplating adding more solar but limiting my export to the amount in my PTO.

Welcome to the club!

The solar/battery world is going to be so different when your grandfathering lapses…

 

[Ampster]

Believe me, it all starts to pencil out a lot more favorably when you add a V2L-capable EV into the equation…

It will depend on the incremental cost of the V2G option compared to a hybrid inverter and batteries. I already have a hybrid inverter and batteries so incrementally adding batteries and more non GT solar is going to be my plan.

 

[Ampster]

Welcome to the club!

Haha. It is my fifth solar installation in 11 years. I sold the the homes under three of them and one is still on NEM 1.0 and the tenants get free electricity.

 

[wholybee]

A million homes with solar, if you can mobilize them, is pretty powerful. A million letters to the legislature, a ballot initiative, an anti PG&E media campaign.

On your side is that California wants to support green energy. If it became widely known that PG&E was killing solar energy, by what is essentially the same as if Comcast could charge people for the privilege to subscribe to Netflix, i think this proposal would die.

I would even consider a class action suit to challenge the constitutionality of the deal. It is absurd at face value that a company can charge a customer for not using their product.

 

[houseofancients]

i forsee his happening globally...
this is why i opted for a grid-assisted setup when i rebuild my new house...

the power companies do need to make a profit ; this won happen just by transporting energy, they need the generation part too...

now it may not happen in the next 5 years, but eventually grid-tie will get you screwed ( excuse my french)

 

[Ampster]

A million homes with solar, if you can mobilize them, is pretty powerful. A million letters to the legislature, a ballot initiative, an anti PG&E media

This was a California Public Utilities preliminary decision. The three Investor Owned Utilities did a very good job to make this seem like an economic justice issue. I wrote letters as did many of my friends. I don't know if a million letters were written.

I would even consider a class action suit to challenge the constitutionality of the deal. It is absurd at face value

This is not a constitutional issue. It was a decision by a public utility governing body. I agree it is absurb.

 

[Ampster]

power companies do need to make a profit ; this won happen just by transporting energy, they need the generation part too...

now it may not happen in the next 5 years, but eventually grid-tie will get

Twenty years ago they were deregulated and currently the IOUs own very little generation. They buy power in the open market. They are only allowed to apply overhead to the generation portion of the bill.
I agree this will encourage batteries and behind the meter solar as presumably you have done.

 

[houseofancients]

Twenty years ago they were deregulated and currently the IOUs own very little generation. They buy power in the open market. They are only allowed to apply overhead to the generation portion of the bill.
I agree this will encourage batteries and behind the meter solar as presumably you have done.

you are correct....

they may have been deregulated ( mistake 1 ) and do very little generation...
both generation and transport are fully supported by the same lobbists.. there for i consider them ( wrongly perhaps) one...

 

[Ampster]

The solar/battery world is going to be so different when your grandfathering lapses…

It has already evolved in the eleven years that I have been messing with solar. There has been significan erosion of benefits to a straight Grid Tie arrangement. That is the reason I have 42kWh of batteries powering a behind the meter hybrid inverter.

 

[Hedges]

$8/kW installed PV
5.5 effective sun hours per day (my San Jose location) x 365 days/year = 2008 sun hours per year
$0.05 tax per kWh produced.

Although unpleasant, we could live with it (here, where grid electricity costs $0.20 to $0.50/kWh. Not at all acceptable somewhere that electricity costs $0.05/kWh)

Problem is, if we don't use the electricity during the 15 minute interval over which meter will combine production and consumption, it only earns a credit 25% of retail. We have to deliver 4 kWh during intervals with net generation to get back 1 kWh during intervals when we are a net consumer.

The tax on the 4 kWh we deliver is 4 x $0.05/kWh = $0.20/kWh
In addition we have cost to produce power, which I put at $0.05/kWh (hardware cost amortized over 10 years), could be $0.15 to $0.20 if you paid $3 to $4/W for complete system including installation labor.

Cost of tax + PV system comes to $0.25 to $0.40/kWh, as an alternative to paying $0.20 for utility delivered power.
If you produce power at Noon and need power at 6:00 PM for air conditioning, the 4 kWh you delivered won't get you 1kWh back. You would need to deliver 10 kWh at $0.05/kWh credit (25% of off-peak retail) to receive 1 kWh at $0.50/kWh (peak retail)
That means paying $2.50 to $4.00/kWh (peak hours) for self-generated power with net metering, instead of just buying it at $0.50/kWh
All brands of batteries just became cost-effective. (top brands cost $0.50/kWh of cycle life)

My understanding is the law says new homes need to be Net Zero. I am not clear how that is caculated or whether it requires a grid tied system.

They're gonna love it.
You will be required to install enough PV capacity to produce all the kwh you consume.
You will be taxed $8/kW capacity which is $0.05/kWh produced.
Your system will mostly deliver power middle of the day when you aren't home to use it. You get a credit of $0.05/kWh produced
(Assuming $2/W installed, producing power costs you $0.10/kWh amortized over 10 years + $0.05/kWh tax, total $0.15/kWh)
After losing a net $0.10/kWh produced during the day, you get to pay $0.50, $0.35, $0.20/kWh for power consumed depending on time of day.

PG&E becomes net zero. They get the power from us and sell it to us. We over-pay for capital equipment of PV production capacity (it is half the price or less at industrial scale compared to residential rooftop.)