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Comparing customer value of solar-plus-storage under net energy metering versus net energy billing – pv magazine USA


The essential distinction between the 2 regimes is that web power metering takes the power produced from power consumption and costs the ensuing “web power” on the retail price whereas web power billing fees power imports from to the grid under the retail price and pays exports from the patron to the grid at a decrease price, which is usually interpreted because the wholesale market price.

What’s the distinction in fee durations between the 2 regimes: the one at present in place that depends on web power metering, NEM 2.0, and the one that may start within the spring of 2023, based mostly on the unanimous resolution of the CPUC final December 15 to cancel web power metering and exchange it with web power billing?

The reply is determined by who you ask. The difficulty has change into so politicized that I do not know who to belief. To reply the query, I made a decision to do a thought experiment utilizing stylized information from my solar-plus-storage system which is the kind the fee needs to advertise.

I put in solar-plus-storage in December 2019 and was given permission to function the system after a month. Earlier, in June 2019, I purchased a Tesla Mannequin 3.

<i> Image Ahmad Faruqui <i>

I put in an 8 kWdc system and paired it with a battery that may retailer 9.8 kWh of power. The system was designed to seize my power utilization for the yr, which within the final twelve months was 10,000 kWh. After discussions with my native utility about my finest price, I made a decision to change to the EV2-A price.

<i> Image Ahmad Faruqui <i>

Payback for the system is estimated to be 9 years, utilizing (a) an estimate of $200 a month for the 12 months previous to my EV buy and the set up of the pre-solar-plus- storage invoice and (b) the estimated financial savings from the system after its set up. The massive unknown is the magnitude of the invoice financial savings, which is determined by many components, together with the climate, the quantity of shade from any giant timber, the orientation of the roof, the effectivity of the panels, and others. This evaluation doesn’t embrace a projected change in future charges, so it’s considerably conservative given the historical past of PG&E charges.

This calendar yr, from January to November, my True-Up invoice underneath NEM 2.0 and PG&E’s EV2-A price got here to $42 per 30 days. That is based mostly on the numbers within the desk under (including $309.90 to the 5th column to $149.02 at 8th yields $458.92, then dividing by 11 yields $41.72).

I am guessing by the point the information from December is added, the month-to-month common invoice will come to $50 a month.

Now let’s have interaction in a thought experiment. Think about if I did not make my funding again in 2019, however plan to do it within the coming yr with the brand new web power billing guidelines. I’ll change to the E-ELEC price and pay an extra mounted cost of $15 per 30 days. See the comparability of charges under.

My power charges throughout peak and part-peak durations could also be barely decrease on the E-ELEC schedule however the off-peak price, which has the most important variety of hours, is larger. Let’s assume that the impact of the switch of payments will probably be canceled, in order that there will probably be no additional impact on my invoice.

Underneath web power billing, export fees will drop by 80% inside 5 years after which stay the identical. My pre-solar invoice was $200 per 30 days. Underneath NEM 2.0, the post-solar-plus-storage invoice is $50 a month, representing a financial savings of $150 a month. Utilizing a rule of thumb, I estimate that 60% of the month-to-month invoice financial savings (or ) from my solar-plus-storage system comes from diminished utilization and 40% from exporting (or ). About 80% of the export financial savings ($48) will disappear, leaving me with solely $12 in financial savings from exports.

I solely save $102 a month versus $150 a month, a drop of just about a 3rd. Clearly, that may lengthen the payback interval from 9 years. I simply do not see how the fee interval might be shortened, as acknowledged within the December 15 resolution.

The purported goal of the choice is to advertise self-consumption. Shoppers ought to reap the benefits of the next choices underneath the brand new guidelines:

  1. Set up the identical dimension system they may set up underneath NEM 2.0 however pair it with two batteries. In my instance, set up an 8 kW system that produces 10,000 kWh to web out my annual utilization however set up one other 9.8 kWh battery to soak up extra technology within the afternoon.
  2. Their PV programs are sufficiently small to forestall exports from occurring and find yourself with an annual deficit. In my case, meaning I’ll solely set up a 4 kWh system and have an annual deficit of 5,000 kWh. I’ll pay PG&E instantly for the distinction in charges anticipated to extend by not less than one other 30% by 2026.
  3. Lower their consumption in half. That’s by no means simple to do, regardless of how a lot one invests in power effectivity. I made an enormous funding in power effectivity in February 2016, by way of the Power Improve Program. I additionally give 8 individuals spa. My payments simply dropped 20%. None of those three choices will appeal to clients.
  4. “Lower the twine” and construct their very own microgrid with a bi-directional EV charger and set up a small backup generator that runs a complete of fifty hours per yr. In fact, this route carries its personal dangers and for the foreseeable future, will solely curiosity the very wealthy.

The choice to finish web power metering has many penalties. Rooftop photo voltaic installations are outdated as a result of most individuals do not need to pair them with batteries. Battery installations are uncommon as a result of they’re costly. I personally know two dozen individuals who have put in photo voltaic panels. Of this quantity, solely three have put in batteries.

Solely rich clients who do not care about fee durations, who earn one million {dollars} a yr and better, could make that funding. I definitely would not have made that funding if I hadn’t already performed it. Nor are low-income clients whose welfare is the acknowledged goal of the choice.

The one factor I can consider that may show that assertion is that rooftop photo voltaic installations, whether or not with or with out batteries, will lower and thus scale back the so-called price shift from the poor to the wealthy. Possibly that is the true intention of the unanimous resolution. However what may even scale back is California’s pursuit of web zero carbon emissions.

Telling customers that huge photo voltaic is barely price 4 cents/kWh rings hole when they’re paying 30 cents/kWh. Within the coming decade, electrical energy payments will proceed to rise by billions of {dollars}, in accordance with utilities. They can’t blame NEM for the speed hike. Nonetheless, an choice that customers now have for decreasing payments whereas staying related will probably be faraway from this unanimous resolution.

This may even characterize a setback for the state’s electrification objectives. What’s the principal motive that warmth pump installations are uncommon in California? The excessive price of electrical energy talked about above. Warmth pumps might be price efficient if clients set up photo voltaic panels on the roof. The identical might be mentioned for EVs.

Shoppers will ask why they can not get electrical energy at 4 cents/kWh when utilities proceed to insist that extra renewables are the cost-effective resolution. Utilities are undermining their very own skill to insist on ignoring clients’ views on the economics of electrical energy purchases.

The views and opinions expressed on this article are these of the writer, and don’t essentially mirror these held by pv journal.

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