California Utilities Balk as Home Solar Producers Near 5 Percent Limit

[jpak]

http://cleantechnica.com/2012/05/02/california-utilities-balk-as-home-solar-producers-near-5-percent-limit/

California solar produced on rooftops is about to breach the next limit of 5 percent of aggregate customer peak demand. The effect could be to sunset the incredible growth of distributed solar rooftop power in the state, as utility payments are ended for future rooftop solar production.

Why is there a limt? Because utilities in California must pay homeowners who generate clean power for the grid. “Net metering” gives solar customers fair credit on their utility bills for the power they generate. There is a five percent cap on the amount of net metering that utilities must make available to customers. That limit was already raised once a couple of years ago, from about half that amount.

The state regulators at the CPUC have proposed closing that loophole and requiring utilities to calculate net metering participation in a way that permits more participation by more customers. Once there is more than five percent provided there’s no guarantee that utilities will continue to credit new solar customers for their contribution to cleaning the grid with their rooftop solar.

Most solar in California – like most urban states – is on grid: that is, the grid is the battery. Everyone who puts solar on their roof contributes to the grid, and is credited for their contribution, and takes from the grid, for example, at night, and is debited for that. It’s like rollover minutes for solar.

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[BlueToTheBone]

1. What is their objection?

They have to get the power from somewhere...do they want dirty energy? Their friends are in the oil business?

[jpak]

2. Competition

n/t

[kristopher]

31. With a distributed renewable grid...

The utilities eventually become minor players compared to the position they enjoy today.

jpak nailed it: competition.

[ProgressiveProfessor]

3. Over simplified puff piece

I am a solar producer here in California. I make well in excess of my usage, and make money on it.

The utilities are mandated to have a certain percentage of the power they supply from renewable source. To get credit for what homeowners were contributing, they had to start paying us for over production. However, the utilities have also invested heavily in renewable sources and are now making their benchmarks. They no longer have any reason to support additional homeowner solar systems which are more expensive for them than their commercial installations.

Nothing stops homeowners from adding new grid tie systems, all they lose is payment for over production. Overproduction is fairly rare, especially at my level. Even the author undersized her system so as not to over produce.

The state rebates were a declining program based on the # of Gigawatts installed. I am not sure where it is today.

The utilities are following the laws and regulations that give them the best ROI. I cannot blame them for that. We need to change the regulations so it provides a better ROI to use homeowner power. Note that will result in overall rates increasing (slightly) for those unwilling or unable to have their own PV installation.

[kristopher]

4. The issue is a public policy vote by the California Public Utilities Commission

The shift to a renewable distributed grid is going to hurt the utilities - there is no question of that. So thank you for representing the interests of the utilities, but the article is accurate and valuable. Perhaps your defense of the utility could focus more on WHY they want to limit solar rather than simply declaring that they are pursuing profits and that is just fine with you.
From my perspective I think that the customers are getting screwed even with the net metering law. They are trading peak power (the most expensive electricity the utility has to buy) for offpeak backup power from the utility's baseload fleet (power that the utility almost gives away for nothing).

What they need is a Feed In Tariff where the full value of the peak electricity is paid to the solar plant owners.

We want more rooftop solar, not less

A game-changing solar vote is happening at the California Public Utilities Commission. They're deciding how much customer-owned solar energy is allowed to get the bill saving benefits of net metering. This statewide clean energy credit program has empowered over 100,000 solar energy systems to be installed on homes, businesses, schools, libraries and other buildings around the state. The Commission has proposed allowing more Californians to get the benefits of net metering, and some utilities are trying their best to cut that number by half.

Can you send the Commission a note, and tell them Californians want more solar, not less?

http://votesolar.org/initiatives/

CPUC net metering decision would give more Californians a fair shake at going solar
April 12th, 2012

Today we’re celebrating an interim win for California rooftop solar along with our partners at SEIA, IREC and the Sierra Club. Together we have been working to encourage the utility regulators at the California Public Utilities Commission (PUC) to clarify the methodology being used to calculate the cap on the state’s net metering program, that billing arrangement that allows solar power customers’ meters to spin backwards and generate savings on their electricity bills. Well PUC Chairmain Peevey has just issued a proposed decision on the cap methodology that, if approved by the full Commission, will help boost solar use by homeowners, businesses, and public agencies in a big way.

Here’s how: Net metering works like “rollover minutes,” with customers receiving credits on their bills for the excess power they generate that is put back on the grid. There is a cap on the amount of net metering that must be made available to customers – beyond that cap, there’s no guarantee that utilities continue to allow new solar customers to net meter. California’s law sets the cap at “5 percent of aggregate customer peak demand,” but does not specify how utilities should calculate that number. Consequently, utilities are using a more restrictive methodology that results in almost 50 percent less net metered solar and renewable energy than would otherwise be allowed. Chairman Peevey’s proposed decision clarifies that utilities should use the cap calculation methodology that results in more Californians having access to the energy bill saving benefits of net metering. Hooray!

Take action to support this proposed decision. Remember the full Commission still has to approve it! TAKE ACTION HERE.

Here’s what our allies and partners had to say:
“When we crafted California’s original net metering law, the goal was maximize the amount of clean distributed energy on the grid,” said former Assemblyman Fred Keeley, author of California’s net metering law “By proposing this methodology, the CPUC is complying with the original legislative intent and helping California lead the way toward a clean energy economy.”
“The PUC’s proposed decision...

http://votesolar.org/2012/04/6914/

[ProgressiveProfessor]

5. Actually I am explaining the facts as they exists today in California

That is neither attacking or defending the utilities. The puff piece failed to discuss some of the relevant facts and history.

The current approach offsets KWH for KWH over a one year period. It accounts for seasonal variances, allowing homeowners to use overproduction during the summer to cover short falls in the winter, daytime overproduction to cover night usage. System owners receive monthly statements and settle up at the end of the year.

With improvements to the current generation of smart meters, It would be technologically possible to do the kind of rate adjustment by time of day for all customers, including those supplying power to the grid via PV systems or other forms of private energy generation. I have not seen any studies that show what the impacts would be on various customers, though I expect it would speed the payback for those with the financial means to install PV systems and be more costly for others.

Personally I would profit handsomely should the PUC go to the construct you advocate. However, until we understand the impact to all customers, I am not sure it is the right answer.

[kristopher]

6. The article is in no sense a "puff piece"

And your "facts" had/have absolutely nothing to do with whether the discussion related to executing the program as originally envisioned vs as interpreted by the utilities is a "puff piece" since they fail totally to address the conflict that is highlighted in the OP. Your position belittling the article is clearly a defense of the utility, an attempt to divert attention from the fact that the utility is fighting expansion of grid-tied rooftop solar done in a fair manner.

Of course, we're aware that this is your standard schtick.

[ProgressiveProfessor]

7. Your usual retreat to ad hominems...

There are serious questions about what constitutes "fair". Despite all the industry press releases you and others tout, PV is still expensive and not available to everyone. Utilities paying a much higher infeed rate could result in those who cannot afford PV or other private/renewable generation to have much higher bills to cover the remaining costs for the utility. There are clearly social issues associated with what you advocate that you are ignoring in your zeal.

I would have a significantly higher income if what you advocate comes true, its not clear that it would be the best social policy.

[kristopher]

8. Bullshit.

It isn't calling you names to point out that your posts are neither progressive nor supportive of solar, that they are, indeed, consistently designed to discourage development of solar.

Explain how paying solar producers the same as they pay other peak power producers is unfair to the ratepayer base that must purchase that power no matter what?

I'll save you the trouble - it isn't. The glaringly unfair practice is trading solar producers 1:1 for cheap offpeak baseload power. It is a policy designed specifically by utilities to both line their own pockets and to discourage competition from distributed generation that ultimately will make the utilities minor players in our energy supply system.

[ProgressiveProfessor]

9. The only bullshit here is from your sacred cows...

Being concerned about the social impacts of rate changes that favor one group over another isn't progressive? What about your own recent post about Duke Energy?

I tend to debunk the hyperbole and marketing crap that you and others push here. As someone hands on with solar (not a marketeer or someone with their head in the clouds claiming to be planning for the future) I feel that realism needs to be injected into some of the fantasies you are so enthralled with. Solar is a great thing, but the market and online forums are full of BS artists over promising what it can do on a practical level today. Most solar home owners I know feel it was oversold to them. I won't apologize for bringing realism into the discussion, especially since some of the schemes you push for would hurt the poor and those on fixed incomes.

Eventually we will have a distributed energy supply system, though there will be a great deal of expense and a lot of time needed to get there. It will still need infrastructure and maintenance. The companies that do that are the power utilities, and not all are privately owned. Those companies will change over time and it will be a good thing. However, in the process I am not willing to see people/consumers/users hurt. In your zealotry, you seem quite willing to throw them under the bus.

Explain this if you can:

If PV solar providers are paid at peak usage rates, where would the extra funds to cover the added costs come from? Remember that in the vast majority of cases, additional costs get passed on to the consumers and are not absorbed by the utilities.

Why are you so intent on enriching me?

[kristopher]

10. Your diversion is noted but I'm still waiting...

I asked the question first:
"Explain how paying solar producers the same as they pay other peak power producers is unfair to the ratepayer base that must purchase that power no matter what?"

The least expensive *wholesale* average for any region's peaking power is $0.30/kwh and the national average is probably above $0.50/kwh. Yet you, the "Progressive Professor" think that it is fair to those who invest in grid tied solar power to be compensated at the cost of off-peak baseload, which is most likely in the range of $0.04-0.06/KWH at MOST.

[ProgressiveProfessor]

13. I answered your questions, how about answering mine

I will repeat my answer in more detail...

Self generation approaches today are basically for the well to do. Any private installation that has surplus power (taken over a year) is not going to be small or low cost. They are mostly for those with money based on price alone.

Generally the current consumer billings are based on total monthly usage, regardless of time of day. Those with local generation capability trade KWH for KWH, regardless of when it was generated or used with an annual balancing of the books.

Your contention that PV generated power at peak times is always traded against off peak power is also an overly broad assumption. Assuming a typical usage profile, KWH generated during the summer are often "used" during peak times in the winter under the current approach. I admit it is not perfect, but it is a step forward and compatible with the rest of the billing approaches authorized by the PUC

Some current smart meters can break down usage to TOD, but they are not widely installed. In fact the CA PUC just approved a scheme so those who really want the old analog style meters can retain them (for a price). A utility could install meters that tracked usage vs TOD and consumers could be billed on that basis. However, those without private generation capacity would scream at the cost.

If the PUC adopts the scheme you champion, the well to do would most likely pay even less for power and the rest of the utilities customers would have to pay more. Somehow taking money from the rest of us to pay the well off does not seem real progressive to me and that will be the effect of what you champion. I believe the social cost of such a scheme needs to be looked at broadly, and hopefully the CA PUC will do that.

That answers your question (for the second or third time)


Now to my questions:

Why are you not considering the broader social implication while pushing a rate scheme that benefits the rich over the broader population?

Why are you so set on adding to my pocketbook?

[kristopher]

14. Bullshit, that isn't an answer any more than your earlier comments addressed the OP.

By its nature solar is a peaking resource for the grid. You attempt to pretend it isn't fails totally.

The thrust of your "question" is implicitly refuted by the policy under discussion - if solar is paid the correct value (as established by the value of all other electricity produced during the peaking period) then it automatically enables nearly anyone to obtain the needed financing to buy rooftop solar and would reduce the payback time to a fraction of what it is now. By denying the legitimate revenue stream owners and potential owners are entitled to it is the utility that is placing its profits above the welfare of the public group you are pretending to speak for while actually hawking the corporate line.

[ProgressiveProfessor]

19. You sacred cow is gored...I think it needs another injection of hyperbole...

Yes its a peaking resource, not just by time of day, but by season. Something you blithely ignore.

If you are so sure of your numbers, surely some urban planner/huckster/marketeer has something that looks like a study that would support it. Done today it would undeniably be paying the rich from the poor.

Depending on what the long term costs for other sources become, you could be right that accelerated payback could mean more installations. You sure seem willing to gamble with the pocketbooks of others.

Looking at the social implications in the short and long term and understanding them (no might, could, maybe) is a good thing. I suggest you try it.

[kristopher]

24. Poor "Progressive Professor"...

No, I didn't ignore (blithely or otherwise) seasonal variation. I used annual average day ahead prices in my example.

For the rest, see post 20.

[backwoodsbob]

29. dude just stop

you are getting your ass handed to you.Don't dig a deeper hole

[kristopher]

30. feel free to explain in detail how that is so...

http://www.democraticunderground.com/112713819#post20

[XemaSab]

28. .

[Yo_Mama]

11. How can you call a person who went solar anti-solar?

The prof's points are good.

The issue is how we make it work all together for everyone.

[kristopher]

12. No, the "Professor's" points are not good.

As to being "a person who went solar" that is an unsubstantiated claim. On an anonymous forum such claims carry no weight when evaluating the content of the remarks made. I do not judge the posts by the trappings of the digital persona but by the content of the digital remarks. And there is absolutely no doubt that the "Professor's" remarks are consistently negative about solar.

The issue isn't "how we make it work all together for everyone". We already "make it work" for everyone. The question is an equitable price for the electricity being produced by those who invest in solar. The owners of coal generators are paid for the quality of the power they produce, the owners of natural gas generators are paid for the quality of the power they produce, and those who own nuclear are paid for the quality of the power they produce. Yet somehow the "Professor" and you seem to think that solar producers do not deserve the same treatment.

[ProgressiveProfessor]

15. Actually they are excellent

On the internet, you can indeed claim to be anyone, even an urban planner.

My solar experience is practical and hands on. I don't surf websites looking for more marketing hype to post, I run about as large a solar plant out there short of a commercial operation...literally all the power the lines can handle.

You vision of an equitable price is actually giving to the well off from the rest of the people. Your fixation on higher pricing without considering the impact across the rest the user base is willful blindness. It certainly is not progressive.

If you get your way, I will make more money...I just think the total social cost needs to be considered

[kristopher]

16. Horsehocky - you are standing directly in corporate utility's shoes.

It is simple, the utility is stealing the value of rooftop solar plants from individuals when the utility "buys" it with offpeak power.

The value of the electricity the utility is buying from the solar plants AVERAGES 10X plus what they could otherwise sell the offpeak power for.

IF the rooftop solar plant owners were paid what the electricity they produce is worth, then any number of financial possibilities emerge that expand ownership down the income ladder. Solar becomes a profitable investment affordable by virtually every homeowner with a south facing roof or room for pole mounted panels.

You are proving just how much that idea scares the utilities.

[Ikonoklast]

17. Take some pics of your set-up and post them.

Id like to see it.

[kristopher]

23. This is the internet.

Would you like me to post some pictures of a PV array down the road? Would you be able to tell if it were mine or not if I said it was?

That's why attempts to establish a position of respect by using screen names with "professor" or "progressive" in your screen name or by claiming to have a solar PV system must, of necessity, carry little to no weight.

The only basis for judging the arguments being made are the arguments themselves. That is how you isolate what a person's perspective actually is. For an example that is unrelated let's say you are a vegan and animal rights activist. You have a dialog with someone named "polarbearcub" that claims to be a vegan but who spends all of their time between posting vegan recipes explaining how necessary factory farming is.

The person might be exactly what they claim or they may be a complete fake on the line of that British guy who was posing as a fay woman from Lebanon. You really can never know just from what is provided on a message board.

That means the best thing to to is confine your observations to the content of the discussions themselves. It is inappropriate to claim you know the person works for a factory farm, but it is entirely appropriate to point out that their argument only makes sense when it is seen through the values of the person operating a factory farm. The person might, after all, be e vegan for health reasons only and sincerely believe that such farming, if done "humanely" (in the traditional sense of the word) does not violate animal "rights" at all.

The message is what matters, not claims of who we are.

[Ikonoklast]

26. I have a pretty good idea as to where that poster is coming from.

I won't hold my breath waiting to see any validation to back up his claims.

After all, everyone is a rocket surgeon in cyberspace.

[kristopher]

27. That's a lot more efficient way of making the same point.

Yes.

[XemaSab]

25. Sort of like your solar setup is totally unsubstantiated?

[ProgressiveProfessor]

18. Because I do not toe his line WRT to renewal energy and offer instead a more rational approach

I am pro solar and other renewable energy sources, but in a reasonable and honest way. The hype in the renewable energy area is tremendous, even among those who claim to be professional municipal planners. We need to look at what can be done reasonably and practically. That is what I advocate and at times it infuriates the true believers. Not a week goes by without some new PR release being breathlessly posted here without critical review or thought. Someone has to stand up for what is rational.

kristopher has raised the question: Why are not household generation systems paid at the same rate that commerical plants are for power during peak hours. The knee jerk answer is that they should. The thoughtful answer is probably not.

Those with small independent PV installations with surplus power are generally well off enough to afford a substantive upfront investment. The rate scheme he advocates would pay them more in the aggregate than they get today. That money would have to come from those without PV systems, i.e.: those less well off or otherwise unable to do PV.

Furthermore such a scheme to be fair would have to bill all users at peak/off peak rates. That would require enhancements to the meters beyond those currently being installed, another cost passed on to everyone.

Oddly enough, he and I share the same long term vision. The centralized system will change over time to be more distributed based more and more on renewables. The argument is timeline and requirements.

Some background on my solar plant: I live out in the Socal desert in prime solar country. I am out on acreage, and the place came with a small array that I have expanded. By watching the secondary market for used hardware, I have maxed out my installation to what utility will allow due to line size.

Moving to renewable power is critical. However it has to be done in a way that does not disrupt availability nor unduly burden those who cannot afford to have their own generation capacity. It will take time to be done responsibly and when we get there, things will be dramatically different than what they are today.

[kristopher]

20. More horsehocky.

Those with small independent PV installations with surplus power are generally well off enough to afford a substantive upfront investment. The rate scheme he advocates would pay them more in the aggregate than they get today. That money would have to come from those without PV systems, i.e.: those less well off or otherwise unable to do PV.

The amount of power the utility has to purchase is the same no matter whether it is coming from a home PV plant or a 150MW natural gas plant. All of the plants sell power on a market that sets the value for their power.

All of them except the small PV plants that is. Because the PV system is, shall we say, encroaching on an established set of players it is subject to being discriminated against in both access to the grid and access to the market that determines pricing. That is precisely the situation we have now.

The "Progressive Professor" would have you believe that paying the home PV owner for the real value of their power would take money from the pockets of the poor and line the pockets of the rich. That is a piece of corporate propaganda that stands the truth on its head.

In fact, as is perfectly obvious to anyone with a sliver of sense is that if there were no PV systems the utility would be buying the same set amount of electricity to meet its needs and paying fair market rates for all of it.

That is not and cannot be in dispute.

What the "Progressive Professor" seems to be trying to say is that the utility is saving money by stealing the electricity from the PV owners. He is trying to paint the PV owners as greedy rich people and saying essentially that they deserve to not be paid for the power they produce in order to keep costs low for the ratepayers. It is justice, the "Progressive Professor" says, to underpay this particular power plant alone among all other producers of peak power.

Wow.

It takes a very odd set of values to form that logical construct. Especially given two additional factors. First is the fact (and it is an established fact no matter what the "Professor" says) that the records of PV installations by zip code show that most are installed in middle class neighborhoods, not "rich" neighborhoods. The people may be comfortable, but they are hardly the 1% the "Progressive Professor" is trying to make them out to be.

Second is a fact already mentioned in a couple of other posts - by denying the owners of PV systems access to the same cash streams that all other power producers are receiving, two things are being accomplished; 1) the utility is enhancing its profits and 2) the utility is discouraging competition from distributed PV.

Let's say you could put in a solar array for payments lasting seven years. Further say that those payments are paid in full by the electricity you sell to the utility. After the system is paid off and for the next 20+ years you will then pocket that same cash stream which was going to pay the payments for your system.

Would you buy a home solar system?

[NickB79]

21. It does illustrate the level of ridiculousness that has blighted DU lately, no?

[kristopher]

22. Really?

Perhaps you can read post 20 and explain how that logic works from any perspective except that of the utility.

[kristopher]

32. If you are in California you might want to sign their petition

CPUC net metering decision would give more Californians a fair shake at going solar
April 12th, 2012

Today we’re celebrating an interim win for California rooftop solar along with our partners at SEIA, IREC and the Sierra Club. Together we have been working to encourage the utility regulators at the California Public Utilities Commission (PUC) to clarify the methodology being used to calculate the cap on the state’s net metering program, that billing arrangement that allows solar power customers’ meters to spin backwards and generate savings on their electricity bills. Well PUC Chairmain Peevey has just issued a proposed decision on the cap methodology that, if approved by the full Commission, will help boost solar use by homeowners, businesses, and public agencies in a big way.

Here’s how:

Net metering works like “rollover minutes,” with customers receiving credits on their bills for the excess power they generate that is put back on the grid. There is a cap on the amount of net metering that must be made available to customers – beyond that cap, there’s no guarantee that utilities continue to allow new solar customers to net meter. California’s law sets the cap at “5 percent of aggregate customer peak demand,” but does not specify how utilities should calculate that number. Consequently, utilities are using a more restrictive methodology that results in almost 50 percent less net metered solar and renewable energy than would otherwise be allowed. Chairman Peevey’s proposed decision clarifies that utilities should use the cap calculation methodology that results in more Californians having access to the energy bill saving benefits of net metering. Hooray!

Take action to support this proposed decision. Remember the full Commission still has to approve it! TAKE ACTION HERE.

Here’s what our allies and partners had to say:

“When we crafted California’s original net metering law, the goal was maximize the amount of clean distributed energy on the grid,” said former Assemblyman Fred Keeley, author of California’s net metering law “By proposing this methodology, the CPUC is complying with the original legislative intent and helping California lead the way toward a clean energy economy.”
“The PUC’s proposed decision...

http://votesolar.org/2012/04/6914/