Monday, May 29, 2006

Part II--The other shoe drops--the electricity corporation's hand in CA

Hey solarDwellers:

So, the other day I was complaining in a post because California Public Utilities Commission is going to get less generous with the amount of rebate money people who install solar pv will get next year. The example I used: a nice-sized, 2.5kW single-home system net price could go up from $15,800 this year to $17,000 next year because of a lower state rebate, unless of course your nice, neighborhood installer decides to keep the price toward the lower end to keep demand high, with the effect of lowering his/her own profit margin.

And if these possible state-level changes weren't dizzying enough for installers and consumers, PG&E (the other shoe, the California electricity corporation), decided to change its electricity rate structure beginning May 1 of this year(2006).

The biggest change was in their "Time of Use" rate, which is the type of rate which most solar owners have chosen historically and found most beneficial economically for the solar power they sell "back" to PG&E during "peak hours." Anyone can choose a "time of use" rate, which just means the utility will charge you more for power you use between 12-6pm(peak hours), and charge you less for all other hours and weekends(off-peak). Doesn't sound good if you use much power during those peak hours. But if you have some nice solar panels on your roof, and you don't use much power during those peak hours, you get to EXPORT that power to PG&E at the HIGHER peak-hour rates, while you pay PG&E LESS for off-peak power at night.

This was a great deal for solar, because on the old "time-of-use" schedule, called "E-7" in PG&E language, in the Summer PG&E would pay or credit the solar owner for their solar electricity at $.29/kWh between noon and 6pm, and only charge that owner around $.09/kWH to use the utility's electricity outside those peak hours. This large differential for the solar owner between the price to sell and buy, in effect, made it possible to buy a PV system that produced only 65% of their electricity usage but REDUCED the electric bill by 95%. In other words, a PV system producing 65% of your electricity needs could produce 95% of economic savings.

Now, the problem: solar owners can't get the old "E-7" rate with such a wide differential between peak and off-peak prices. Now you have to go with the "E-6" rate schedule. Instead of earning $.29/kWH peak and paying $.09/kWh off-peak in Summer, the new rates are $.21/kWh peak and $.095/kWh off-peak. They're paying you less for your solar during the day and charging you more at night for power!!! What a deal!!

So, what's it all mean!? Basically, the magic of a PV system producing only 65% of your electricity but reducing your bill by 95% is not so magic any more, because the utility is buying your solar for less between those prime noon-6pm hours when solar panels produce at their best. The reality now is that you need a bigger, more expensive PV system than you would have needed under the old rate to get that same 95% economic savings benefit.

All in all, future solarDwellers, it's been a pretty disappointing double whammy from the state(potential reduced rebates) and the corporation(reduced price for your solar exports) at the same time. Don't get me wrong! This is just a bump in the road in the rebirth of solar in California and nationwide.

Buying solar for your abode still is guaranteed to pay you back on your investment and guaranteed to reduce your carbon footprint A LOT!!!! You'll be glad to know if you put a 2.5kW system on your house, it's roughly the carbon equivalent of not driving your car 10 months out of each and every year that your solar panels are on your roof. So, stick with your current car and buy solar instead of a new car, or try not driving for the 10 months out of every year . . . .You gotta do what works for you.

--the solarDweller
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7 comments:

Robert Nanders said...

Guaranteed to pay back your investment? Can you show that with actual numbers? I'm very interested in using solar to try to do my part to help, but if it puts too big a dent in my pocketbook, I might not be able to do it at all!

Anonymous said...

Hi Jason,

A year and half ago we installed a ground mount 7.3 kw system on Long Island NY. We set the tilt at 35 degrees and just a couple of degrees off true south. We used Kyocera 130 w mods and 2 Xantrex 3.0 inverters, which are a little too small for full sun when they limit at about 3020 watts output. Our full year output is just under 10 meg. We decided on 35 deg. because it provided the highest yearly output on most calculators and generates the highest amount on summer afternoons when the grid needs it most. The only time we have shading in late afternoon from fall to spring.

Paz said...

More people should learn about this. Electric car technology is really becoming impressive, like the new Zap EV that does 0-60 mph in 4.8 seconds (source: zapworld.com) Electric is looking more and more like the way to go.

Paige Green said...

That's unfortunate that the system is more skewed now. At least the government is doing something...in Australia some state government's are only JUST beginning to offer feed in tariffs for solar sytems that feed energy into the grid.

info@dreamdesignbuilders.com said...

Solar Dweller, I like your perspective and engaging way of informing residents of the different rates. I work for a solar installer in San Diego and often spend much time explaining the different rates of electricity and the benefits solar can apply. Nice job on the blog!

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