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

[HuntersCrackpipe]

This is SUPER helpful, thanks!

It sure would be GREAT if this was clearly spelled-out / written somewhere official that customers could review and reference!

So, it's pretty clear that going from NEM 1 to NEM 2 (especially extending for another 20 years) is ideal when compared to NEM 3?

100%, even with incurring the non bypassable charges of NEM 2. NEM 3 will make solar worthless unless you have $30k in batteries added to your system

 

[fafrd]

100%, even with incurring the non bypassable charges of NEM 2. NEM 3 will make solar worthless unless you have $30k in batteries added to your system

I’m sorry, that is just not a true statement.

You need a battery sized to offset overnight loads.

For my modest house, I consume 8-8.5kWh overnight most nights, meaning I need a 10kWh battery if I don’t want to stress it cycling beyond 80%.

A 5.12kWh battery currently cost $1450: https://signaturesolar.com/eg4-lifepower4-lithium-battery-48v-100ah/

So 10.25kWh can be had for under $3000, 10% of the $30K you are talking about.

Obviously if you consume 80kWh overnight instead of 8kWk like me, you’ll need $30K’s-worth of batteries, but when you scale that cost by your annual electrical savings, it’s still a worthwhile value proposition.

I’m not trying to argue that NEM2.0 is not more favorable than NEM3.0, merely that NEM 3.0 pencils out to at least as solid of a value proposition as NEM 1.0 penciled out to in the ‘early days’ when solar panel were much more expensive than they are now.

 

[Calvin98]

So for NEM 1 the strategy was to produce as much power as you could durning peak times and use it at off-peak times, so for every kwh you put in the grid from noon to 6pm you got $0.32 credit which you could use at night at $0.085. So for every 1 kwh you put in at peak, you could take out 3 1/2 off peak and be even. The net would accumulate and be calculated at the end of the year. It also meant you could have a much smaller PV system and have a net of 0 at the end of the year.

So from what little I know of NEM 3, you basically don't get anything for putting power into the grid, which means you need to use as much power while you generate it and store any excess in a battery for use at night for use the same day. Also, you have to generate and store enough power for your worst (i.e. hottest day) and forget about any NET over the year? i.e. no winter credits for extra summer use? This also means you need a much bigger pv and battery system than a NEM 2 system, one that can take care of the "worst" (hottest=most power used) day?

A 10 or 20 kwh battery should be doable for most that have pv now. 100kwh is getting up there. Plus, if batteries go like panel and inverter prices, they will hopefully get better and cheaper in the future. I never considered that a 20 year panel warranty would be made useless by panels that are 2x as efficient that cost a fraction of what they once did. Throw them away (recycle) after 10-15 years and get new ones. Or put them to some other use and get new ones.

 

[Hedges]

merely that NEM 3.0 pencils out to at least as solid of a value proposition

How does NEM 3.0 pencil out as anything? What value does it give you?

(You could set up PV, batteries, zero export. How is NEM 3.0 any better?)

I never considered that a 20 year panel warranty would be made useless by panels that are 2x as efficient that cost a fraction of what they once did. Throw them away (recycle) after 10-15 years and get new ones. Or put them to some other use and get new ones.

Nothing wrong with the 20 year old panels, still do what they were bought for.
But you can replace with the new model to get 1.5x, maybe approaching 2.0x as much in the same space.

Reasons to do that:
1) You consume more than before
2) NEM 3.0 is a worse deal, resulting in you either getting a fraction of the credit (low feed-in tariff) or nothing for surplus (zero export), therefore over-panel to reduce how often you buy power.

 

[fafrd]

So for NEM 1 the strategy was to produce as much power as you could durning peak times and use it at off-peak times, so for every kwh you put in the grid from noon to 6pm you got $0.32 credit which you could use at night at $0.085. So for every 1 kwh you put in at peak, you could take out 3 1/2 off peak and be even. The net would accumulate and be calculated at the end of the year. It also meant you could have a much smaller PV system and have a net of 0 at the end of the year.

So from what little I know of NEM 3, you basically don't get anything for putting power into the grid, which means you need to use as much power while you generate it and store any excess in a battery for use at night for use the same day. Also, you have to generate and store enough power for your worst (i.e. hottest day) and forget about any NET over the year? i.e. no winter credits for extra summer use? This also means you need a much bigger pv and battery system than a NEM 2 system, one that can take care of the "worst" (hottest=most power used) day?

A 10 or 20 kwh battery should be doable for most that have pv now. 100kwh is getting up there. Plus, if batteries go like panel and inverter prices, they will hopefully get better and cheaper in the future. I never considered that a 20 year panel warranty would be made useless by panels that are 2x as efficient that cost a fraction of what they once did. Throw them away (recycle) after 10-15 years and get new ones. Or put them to some other use and get new ones.

Mostly correct but you are missing a few nuances.

You don’t get $0.00 for excess export, you get $0.025, which is 13.16% of off-peak rates of $0.29:



Secondly, while NEM 1.0 and NEM 2.0 limited you up sn array sized to offset annual consumption, NEM 3.0 explicitly authorizes arrays sized to generate 150% of annual consumption.

Given the much higher power per panel coupled with the much lower cost per W of solar panels, this translates to 1.5 times the power for much less cost and roof real-estate that was the case for early NEM 1.0 customers.

So let’s now do the math with an assumption of flat consumption and a typical 100%, 150% 100%, 50% quarterly split of seasonal generation as a % of (flat) quarterly consumption for March-May, June-August, September-November, and December-February.

An array sized at 100% of annual consumption will approximately offset 100% of consumption from March through May (as well as from September through November).

Scaled to to an array sized at 150% of annual consumption means you will export +50% of consumption from March through May (and another +50% from September through November).

Over the June-August months, the 100% array would export +50% meaning the 150% array will export +75% on consumption.

So over those 9 months you’ll generate more than enough power daily to offset 24-hour consumption and will export a total of +50% + +60% + +75% of 3-month consumption, meaning a total of +175%.

But that +175% of consumption is only valued at 13.16% of wintertime consumption rates, meaning they are only valued as enough credit to offset 10% of winter months consumption.

A 100%-sized array would only offset 50% of consumption from December through February, meaning a 150%-sized array will offset 75%.

The 10% export credit generated from March through November covers 2/5ths of that gap, but the remaining 15% of wintertime consumption will need to be paid for.

The 15$/month minimum charge translates to $180 for the year or enough to cover 621kWh of consumption annually.

So as long as your monthly consumption is less than 207kWh / 15% = 1092kWh, you won’t owe anything more than the Minimum Delivery Charges you’ve already paid.

Of course if you consume much more per month over winter months versus non-winter months, that will change the math and things may not work out as well for you.

But overall, the larger array sized authorized under NEM 3.0 will translate to offsetting most of your winter consumption charges (beyond MDCs).

 

[fafrd]

How does NEM 3.0 pencil out as anything? What value does it give you?

(You could set up PV, batteries, zero export. How is NEM 3.0 any better?)

You’d need an array sized to ~200% of annual consumption to offset all charges off-grid.

Because NEM 3.0 retained annual trueup, you can pretty much offset all annual consumption charges beyond MDCs with an array sized at only 150% of annual consumption (3/4 the size).

Nothing wrong with the 20 year old panels, still do what they were bought for.
But you can replace with the new model to get 1.5x, maybe approaching 2.0x as much in the same space.

Reasons to do that:
1) You consume more than before
2) NEM 3.0 is a worse deal, resulting in you either getting a fraction of the credit (low feed-in tariff) or nothing for surplus (zero export), therefore over-panel to reduce how often you buy power.

 

[Hedges]

You don’t get $0.00 for excess export, you get $0.025, which is 13.16% of off-peak rates of $0.29:

You’d need an array sized to ~200% of annual consumption to offset all charges off-grid.

Because NEM 3.0 retained annual trueup, you can pretty much offset all annual consumption charges beyond MDCs with an array sized at only 150% of annual consumption (3/4 the size).

So you're considering how may kWh I can use immediately and with battery storage, and estimating I'll only have to buy 6.58% of annual consumption, then that with 50% extra PV getting credited at 0.1316 of retail pays for it.

Seems like that depends on summer vs. winter consumption, "your mileage may vary."

How much extra do we have to pay PG&E, for the privilege of giving them 87% of that 50% surplus so we can get 13% of it back?
If that costs us actual dollars, we might be better off just paying them retail for the 6.58% of consumption we aren't able to produce for ourselves.

(in my case, go back to burning natural gas like I did before.)

Will those who invest in batteries, as encouraged, later be charged a "departing customer" fee because they reduced grid usage 93.4% (including the corresponding non-bypassable charges), thereby saddling the poor with cost of supporting the grid?

 

[Hedges]

Oh, considering that you have to deliver 7.5kW export for every 1.0kW of import you get in return,
and DIY GT PV costs $0.025 to $0.030/kWh while turnkey installation costs $0.07 to $0.10/kWh (amortized over 20 years)

Seems to me NEM 3.0 is around break-even for DIY (ignoring any monthly extra charges), and clearly a losing proposition if you pay for panels installed. As compared to just buying the same power from the utility.

So zero-export and batteries is the thing to do?

Or, do we oversize (to avoid buying more power on bad days) and break even or lose less for surplus if we do have net metering?

@fafrd ?

 

[Calvin98]

Lots of good info to consider.

Filing for NEM 2 now and having 20 years of certainty might be better than staying in NEM 1 and finding PGE changes the rules a few months or years down the line and says you're in NEM 3 all of the sudden.

Any NEM1 people out there at over 20 years? They got put in NEM 2 or still have NEM 1 like our neighbors at 23+ years?

What are the NEM 2 rules now? Same as NEM 1 but you have to pay something like $0.10/kwh to put power into the grid? So it is still best to use as much as you can when you produce it and minimize what you put into the grid? and a battery for overnight storage use is still a good idea also to minimze that $$0.10 fee? (although battereies probably cost more than that.) For NEM 1, we don't have to pay anything to put power into the grid. We can put 1 kwh in in the winter and take 1 kwh out in the summer (more or less). Grid is the battery where you can store power for a year.

 

[Ampster]

Rule 21 =? Seem like it is a 300 page doc. Any way to condense it? What changed with NEM 2?

Rule 21 has been in effect for several years. Any inverter built to UL1741SA will likely be Rule 21compliant. It was not changed by NEM 2.0 or NEM 3.0.

 

[Ampster]

What are the NEM 2 rules now? Same as NEM 1 but you have to pay something like $0.10/kwh to put power into the grid?

NEM 2.0 added Non Bypassable Charges which amount to $0.025/kWh for power you use. There is no charge for exporting.

 

[Ampster]

NEM 3 will make solar worthless unless you have $30k in batteries added to your system

Solar will be worth less not worthless with NEM 3.0. Also the cost of batteries varies based on usage and $30k is an exaggeration.

 

[Hedges]

I think NEM 3.0 will make cost of power produced by PV, exported to grid, and reimported, more expensive than just buying from grid.
(more or less depending on DIY vs. turnkey, and off-peak vs. peak time.)

So I think NEM 3.0 makes PV worthless, except to the extent you use or store without exporting.
Alternatively, NEM 3.0 is worthless; just build an off-grid or zero-export system and use the grid for power in excess of PV/battery.
It's only value is you don't have to get zero-export hardware.

 

[Calvin98]

From PGE web site:
https://www.pge.com/en_US/residenti...ing/net-energy-metering-and-tracking-faq.page

Not great.

"Customers will remain on the NEM2 tariff for 20 years from the year of the original approval from PG&E to interconnect and operate their system. Any customer that switches from the existing NEM1 tariff to the NEM2 tariff will be able to use the NEM2 tariff until the expiration of 20 years from the original year of the approval from PG&E to interconnect and operate their system."

This sounds to me that if you got solar 19 years ago, NEM2 will go right into NEM 3 after 1 year.

"WHAT HAPPENS TO MY EXISTING NEM1 SYSTEM?​

Current eligible participants in the NEM1 program are “grandfathered” as follows: Customers may remain on their current NEM1 program from the date of the issuance of the “Permission to Operate” (PTO) letter from PG&E until the date of the customer’s first Energy True-Up in the twenty first (21st) year. For example, if a customer had a NEM1 PTO date in July of 2010, they would be eligible to stay on their current NEM1 program through their annual True-up in 2031."

Practical experience with neighbors at 23 years NEM 1 makes it look like they did not change it for them for some reason.

"WHAT IF I MAKE MODIFICATIONS TO MY NEM1 SYSTEM?​

The separately metered system is eligible to be grandfathered under the NEM2 program for the full 20 years. However, if the entire system takes service under the NEM2 program, it will be grandfathered under the NEM2 program beginning from the date of the issuance of the NEM1 PTO."

This sounds like if you have NEM1 and go to NEM2 you still only get 20 years from the original NEM 1 start. Say you got NEM 1 19 years ago, now you do a new NEM 2 system, you will only get NEM 2 for 1 year. Then what, you get put in NEM 3 in year 21 after the first installation of your solar? If this is right, no point in doing anything now if you have NEM1.

All way too complicated.
If this is correct, the only reason to do something is if you don't have solar yet. Get it now to lock in NEM2 for 20 years. If you already have solar, no point in doing anything (except maybe add batteries).

 

[Hedges]

Options, to be completed within the next 6 weeks:

1) Install a separately metered EV charger. Once you have agreement number and meter number, reserve NEM 2.0 for it.

-or-

2) Apply for a PV permit from your city. Install Rule-21 compliant inverter (if not already there). Try to get it signed off. Make additional updates if required, try to get it signed off.
If you are able to make your system pass inspection (or if you have high confidence you can do so reasonably), shut it down and terminate existing net metering agreement with PG&E. Then reserve NEM 2.0

If you decide you are unable to meet current code or it is just to expensive, let permit expire and stick with existing system rolled onto NEM 3.0
Shift loads to times of good generation. Try to set up "minimum export, minimum import" control of loads. That could include an electronic "light dimmer" for resistive heating loads. You might have to fabricate/program something, but it is a cheap triac driver controlled by a watt meter. Another could be variable speed pool pump, again controlled by watt meter.

Consider slapping on an AC coupled battery, configured to minimize export/import, especially import at peak rates.
There are a few commercially available. Some systems will provide battery backup, maybe AC couple to existing GT PV.

 

[Hedges]

I think EV rate plan used to be dirt cheap, but not any more.

PG&E:
$0.25/kWh off peak Midnight to 7:00 AM
$0.37/kWh part-peak
$0.61/kWh on peak 2:00 to 9:00 PM

Electric Vehicles

With the number of electric vehicles in California growing every day, PG&E is committed to low electric vehicle rates, and home charging for electric cars in California.

www.pge.com

PV backfeeds grid, typically 9:00 AM to 5:00 PM, earning credits around $0.50/kWh average.
F150 Lightning charges from grid between Midnight and 7:00 AM.
240V cord from F150's worksite inverter feeds "generator" input of your house's transfer switch.
You sit back and laugh at regulated monopolies.

 

[fafrd]

I think NEM 3.0 will make cost of power produced by PV, exported to grid, and reimported, more expensive than just buying from grid.
(more or less depending on DIY vs. turnkey, and off-peak vs. peak time.)

So I think NEM 3.0 makes PV worthless, except to the extent you use or store without exporting.
Alternatively, NEM 3.0 is worthless; just build an off-grid or zero-export system and use the grid for power in excess of PV/battery.
It's only value is you don't have to get zero-export hardware.

I’m not understanding your logic here.

Let’s say you put in an off-grid system sized to offset 24-hour consumption on peak summer months.

You didn’t need to purchase any power in summer but your only covering 67% of consumption in Spring and Fall and only ~33% in winter, so your paying full retail electricity rates for 33% of your annual consumption. You’ll be paying the Minumum Monthly Charge over those summer months in any case, so factor another $45 in charges to your total annual bill whether you have an export agreement or not. Bottom line: you invested a lot to only cut your annual electrical bill by 2/3 and you are still exposed to whatever rate increases the utility may apply to that consumption going forward (as well as the Minimum Monthly Charge over summer months).

So let’s let’s increase the size of the system to offset 24-hour consumption in Spring and Fall. That larger system should offset 150% of summer-months consumption but you can’t export that excess energy so it gets wasted. Now wintertime consumption is offset by 50%, so you are only paying full retail for half of your wintertime consumption, or ~12.5% of annual consumption, but you’ve also got to factor in 9 months of minimum monthly charges ($135).

You could export that 50% excess generation over summer for 13.16% credit to generate enough credit to offset 6.58% of wintertime consumption. So instead of costing you 50% overwinter you are only charged 43.42%, meaning your are paying for 10.86% of your annual consumption instead of 12.5%.

Getting that paltry credit did not cost you anything more, so how is that ‘worthless’???

There is a point at which investing in a larger array makes no sense because there is no benefit, I agree.

But when we are comparing against off-grid arrays sized to offset anywhere between 100% and 150% of annual consumption, which require batteries and inverters at least as powerful and expensive as those required to take advantage of NEM 3.0, it costs you nothing in addition to sign up for NEM 3.0 (since you’ll be paying Minimum Monthly Charges anyway) and the (paltry) credits you get for export still reduce your wintertime bills by something.

Of course, if you are talking about truly severing all relationship with the Grid to avoid Minimum Monthly Charges, that’s a different story, but not for the Faint of Heart…

 

[Hedges]

Paltry credit is better than no credit (e.g. zero export).
Oversize for summer to reduce import on bad days makes sense.

How much money do you have to pay PG&E to be on NEM 3.0 and receive the paltry credit? Is that still a net savings, or a net loss?
(Include any difference in rate schedule.)

I observed that your cost to generate power is about same as the paltry credit, more or less.
And of course much less than your import cost, which is why some oversize to reduce import makes sense. That's where paltry credit gives you some back.

Whether TOU (mandatory for NEM) or tiered is preferable will depend on when and how much power you use.

https://www.pge.com/pge_global/common/pdfs/rate-plans/how-rates-work/Residential-Rates-Plan-Pricing.pdf

As for "oversize", consider "overpanel", which costs a bit less. Inverter meets peak need, PV panels perhaps 2x, to still meets need in less-optimal conditions.
Plan for alternate heat in winter, since when grid fails, NEM won't help. Your battery can carry smaller loads, including furnace fan.

 

[Ampster]

I think EV rate plan used to be dirt cheap, but not any more.

I have been on an EV rate for years. I just did the math based on my usage and production last year and I think the TOU-C rate is better for me. The PG&E rate analyzer does not agree but I am going to make the switch at the end of the month. I will most likely be a Net consumer but also have a dollar credit. It is all about leveraging solar, batteries and load shifting.

 

[MisterSandals]

I think the TOU-C rate is better for me. The PG&E rate analyzer does not agree

Can you elaborate a little on this discrepancy?
I did the math when plunked into TOU recently and recall disagreeing with the PG&E analyzer too. I assumed that i was missing something or was making a wrong assumption. Making assumptions is necessary as they obfuscate a lot of the details, on purpose i am sure. for this reason.