Solar Net Metering being challenged in CA
If you have solar in CA and are connected to the grid via NEM (Net Energy Metering), be advised that the utilities are doing their best to significantly limit the duration of the grand fathering of this policy. The CPUC (California Public Utilities Commission) will be deciding next week on this very important subject. You can let the CPUC know that CA should stick to its promise and keep those of us that have already gone solar with our original NEM agreements. The petition will be presented to the CPUC on Wednesday, so important to sign by Tuesday Feb 4th.
Solar Customers Call for Fair Treatment
Letter to PUC Urges Net Metering Contracts to Be Honored for Thirty YearsBrad Heavner, CALSEIA Policy Director January 13, 2014
San Francisco—School districts, ranchers, business associations and others sent a letter today to Public Utilities Commission President Michael Peevey and Governor Jerry Brown urging them to honor existing agreements with solar customers.
At issue is net metering, the program that allows a solar customer’s meter to run backward at times when solar panels are producing electricity that is not being consumed in the building. The customer is only billed for net electricity usage. The program has been a fundamental component in the decision to go solar for most solar customers.
“The state has stood behind Net Energy Metering for over a decade as a way to encourage our investments in clean energy,” the parties stated in the letter, adding, “We would feel wronged if the state changed the rules we agreed to.”
The letter was signed by the Los Angeles Business Council, the California Cattleman’s Association, the California Association of School Business Officials, and other businesses, organizations and districts.
Last year, the California Legislature passed a bill to revamp the state’s net metering program. The first decision by the PUC in implementing that bill is determining when the current net metering agreements will be transferred over to a new agreement that has not yet been defined. Gov. Brown has supported fair treatment for current net metering customers, but the PUC has not issued a ruling.
“A deal is a deal,” said Brad Heavner, Policy Director of the California Solar Energy Industries Association. “People went solar when the state encouraged them to do so, and the state needs to hold up its end of the bargain.”
What changes are they thinking of making to net metering in CA?
Certainly for homeowners like me who took on the risk of installing a solar PV grid tied system, net metering seems very fair, and without it I could not justify the investment.
Here in Maine one of my local state legislaters is pushing for further incentives such as compensating homeowners for excess generation, if any, instead of letting unused credits after the period of 12 months go free to the utility.
Sounds like a desperation move to grab any revenue source they can see. Hopefully In Texas or Maine we will not have the same solvency issues as on the left coast.
My local coop has actually changed the structure to compensate PV home generators more fairly, and will buy back anything we produce over and above our personal consumption at the wholesale rate. It used to be that if we exceeded our consumption we gave it to the coop with no compensation.
Here are some of the issues that Gail Tverberg sees with net metering, from her her piece Ten Reasons Intermittent Renewables (Wind and Solar PV) are a Problem
7. There is a danger that wind and solar PV will make the electric grid less long-lived, rather than more long-lived. This tends to happen because current laws overcompensate owners of intermittent renewables relative to the value they provide to the grid.
One point of confusion is what wind and solar PV really replace. Do they replace electricity, or do they replace the fuel that makes electricity? There is a huge difference, in terms of when an intermittent renewable achieves “grid-parity” in costs. Fuel costs are typically only a small share of retail electricity costs, so reaching grid parity is extremely difficult if intermittent renewables only replace fuel costs. In the US fuel costs average about 3 cents per kWh. For residential users, the retail price averages about 12 cents per kWh, or four times as much as the fuel cost.
What we are interested in is the value of intermittent electricity to the companies that make and sell electricity–utilities or similar companies. In my view, the typical value of intermittent electricity is the value of the fuel the intermittent electricity replaces–in other words, the cost of coal, natural gas, or uranium replaced. This is the case because using intermittent electricity doesn’t generally reduce any costs for an electric utility, other than its fuel costs. It still needs to provide backup power around the clock to customers with solar panels. Because of the variability in production, it still needs pretty much the same capacity as in the past, and it needs the same staffing for each of the units, even though some of them might be operating for a smaller percentage of time.
The value of the intermittent electricity to the utility may be greater or less than the first estimate of the fuel savings. In some instances, particularly if there is a lot of solar PV in a part of the world where maximum energy use is during the summer, peak capacity needs may be reduced a bit. This would be a savings above fuel costs. Offsetting such savings would be increased costs for new transmission lines to try to even out spikes in electricity production and to bring wind from sources where it is strongest to locations where its energy is truly needed.
The problem that occurs is the fact that most plans reimburse users of wind and solar PV at a far higher rate than the cost of the fuel they replace. Often “net metering’ is used, so the user is in effect given credit for the full retail price of electricity for the electricity generated by solar panels. This higher reimbursements leaves a revenue shortfall for the companies involved in producing electricity for the grid. The danger is that some companies will go bankrupt, or will leave the system, endangering the ability of the electric grid to provide a stable electric supply for consumers. This is a potentially much more dangerous problem than any benefit that intermittent renewables provide.
Also, funding for the additional electric transmission lines is likely to become a problem, because neither the electricity companies nor governments have sufficient revenue to fund them. The reason the electric companies cannot afford them should be clear–they are being asked to subsidize the costs through overly high reimbursement of the value of the intermittent renewables. I discuss the reason for the government lack of funds in (8), below.