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nwdiver

NET METERING; Four reasons "Net-Metering" is no longer our friend...

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Fees not based on use

Despite the recent plunge in the cost of distributed generation sources such as solar PV, the utility grid is still critical to maintaining our quality of life. The cost to maintain and upgrade this infrastructure should be borne by those that use it the most. Net Metering policies run contrary to this approach. Imagine two solar homes… home A manages it’s use to sync with power available from their PV array, as such they import and export very little minimizing use of the grid. Home B does nothing and their grid use is significantly higher than home A. Both homes USE the same NET amount of electricity so their electric bills are identical but home B USED the grid significantly more than home A… shouldn’t home B have a higher bill to reflect its increased use of the grid?


Limited Deployment of Solar PV
While at first hailed as the first step toward making solar PV the dominant source of energy, Net Metering policies are now beginning to hinder this progress. I have yet to encounter a Net Metering policy that encourages the installation of solar beyond what the residence or business consumes on a yearly basis… most on just a monthly basis. The premise of Net Metering is in the name… any exports are simply subtracted from imports. Export what you import and you owe nothing other than perhaps a connection fee. But what if your exports exceed your imports… would the utility then pay you for the excess power? Sometimes… but this is beyond any net metering policy and if the utility pays anything it’s usually at wholesale rates which are often 75% less than retail. There are many places that simply can’t accommodate sufficient solar to offset their use. If we wish to make meaningful progress toward a carbon-free future we must encourage residences and businesses to install as much solar PV as they CAN not simply a sufficient amount to offset their own use.


Delayed development of Demand Response and Storage
With Net Metering, absent any TOU policies, there is no financial incentive to maximize “self-consumption”. Common quips against solar include weaknesses such as “not being available at night”; obviously using the energy when it’s available and storing it in batteries will solve this problem but solutions are unlikely to be developed and deployed without the incentive to do so.


Suppressed utility support
While it’s certainly possible that organizations opposed to renewables such as ALEC would fight solar no matter what policies are in place, Net-Metering gives them more ammunition. Somewhat in line with basing fees on use… Producing 1500kWh, exporting 1500kWh and importing 1500kWh for a connection fee of $7 may be sustainable when 1% of the customer base is self-generating but NOT if we hope to achieve much higher levels of distributed generation. Utilities are seizing on this fact and adding or attempting to add onerous fees. Arizona now charges $0.70/kW installed and Xcel in NM recently increased their fee for production from $0.026/kWh to $0.033/kWh… yes, NM charges a fee for self-generation. We need a policy that allows utilities to continue to be viable businesses. Eliminating the need to purchase and maintain a 40kWh+ battery by making a practically infinite “battery”… i.e. the grid, available is a very meaningful service and they should profit from it.


The grid is good… it improves efficiency… maintaining and upgrading the national grid will be much less expensive and more effective than collapsing into millions of nano-grids. How much we contribute to it’s maintenance should be commensurate to our use. If we want Solar PV to continue to grow net-metering should be replaced with a feed-in-tariff.


A final thought… some people think the solution is to go off-grid. Imagine if you could only have as much money as you could carry in your wallet… you couldn’t have a bank. Anything you earned that wasn't spent and couldn’t fit in your wallet was lost. That’s a little like what going off-grid means. It means if you go out of town for a fews days your solar panels sit idle instead of powering your neighbors house. It means installing a battery bank several times the size of the one you would otherwise need. It means that your peak use is limited by the size of your inverter… I like being able to charge my Model S from 0-100% in <4 hours when I need to and I think it would be foolish to buy a 20kW inverter just to use the extra capacity a couple times a month.

Updated 2014-06-23 at 10:22 AM by nwdiver

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Featured , Energy and Environment

Comments

  1. jimhall's Avatar
    Thanks for the info. Now I have a question about charging the Tesla. We have solar panels that provide virtually all of our electricity needs. Of course SDGE gets money from us nevertheless. The question is when it is most economical to charge my Tesla: at midnight when SDGE rates are lowest of midday when we are generating most solar power. Naturally we couldn't charge it midday when we're out but much of the time we're at home. So if anyone knows the answer I'd sure appreciate it. And I've just registered for this group so don't really know what I'm doing yet but hope that this is an appropriate place to pose my question. Jim Hall
  2. nwdiver's Avatar
    Depends on how much you get paid for EXPORTS... If EXPORTS > Off-peak then it makes more sense to charge at night...

    In TX the is no TOU, no net-metering; Exports get credited ~$0.075.kWh and Imports cost $0.12/kWh so "self-consuming" power to charge your car saves ~$0.045/kWh.
  3. CalDreamin's Avatar
    My combination of PG&E net metering and the TOU EV-A rate plan means I can end up with a $0 annual electric usage bill even if my solar PV system makes only about 75% of my home's usage. As I understand the plan, I would get paid nothing if I generate anything between ~75% and 100% of my annual usage, a zero ROI on any investment within that range. Generating beyond 100% of home usage is reimbursed at something like 3 or 4 cents per kWh.

    The system strikes me as odd, with a (probably too) generous 16-40 cents per kWh weekdays for my solar generation, but abruptly dropping to nothing beyond the point of zeroing out my annual bill. Since I'm close to being at the ~75% generation threshold, there is not only no marginal $ incentive for me to install more solar PV, but also no marginal $ incentive to invest in home efficiency improvements. At least that's the way I understand the program.

    I also pay a $4.44 monthly grid connect fee, which seems dirt cheap for letting me use the grid as a big "battery".

    Battery storage would lose money for me unless I could save my "partial peak" 6 am - 2 pm solar generation and send it back to the grid during the 2 pm - 9 pm "peak". I'm not sure if that's allowed. If I store my partial peak solar energy to charge my Model S at night, that's a money loser for me even if the battery was free.
  4. markb1's Avatar
    jimhall- Charge at night. The way EV-TOU2 works with net metering, you pay 44 cents for each kWh you consume from the grid at peak hours, and your bill is offset by the same amount if you put energy into the grid. So by charging during peak hours, your are either paying $0.44/kWh for taking energy from the grid, or you are losing $0.44/kWh for solar energy that you divert to charge your car. So it's effectively the same. Just go by the TOU rates, and don't consider the solar, when deciding when to charge.

    The one exception is if you generate more energy than you consume, on average. In this case, it doesn't really matter. SDG&E will pay you $0.04/kWh for excess generation at the end of your true-up period, and the TOU rates are effectively irrelevant. In fact, there's no point in switching to TOU if you're in this situation.

    Since you say you generate almost as much as you consume, you will probably find that the TOU period you use for charging only makes a small difference.
  5. ToddRLockwood's Avatar
    The solution to this dilemma could be quite simple: separate the cost of grid maintenance from the energy charges and list it as a separate line item on the electric bill. Do this on ALL electric bills, not just for net metering customers.
  6. nwdiver's Avatar
    Quote Originally Posted by ToddRLockwood
    The solution to this dilemma could be quite simple: separate the cost of grid maintenance from the energy charges and list it as a separate line item on the electric bill. Do this on ALL electric bills, not just for net metering customers.
    Most if not all utilities have a standard connection fee which ranges from $7-$30. There also needs to be a per kWh use fee to encourage storage and self-consumption.
  7. ToddRLockwood's Avatar
    Quote Originally Posted by nwdiver
    Most if not all utilities have a standard connection fee which ranges from $7-$30. There also needs to be a per kWh use fee to encourage storage and self-consumption.
    Green Mountain Power, Vermont's largest utility, accomplishes that "use fee" in the form of a 6-cent/kWh bonus paid to customers for solar-generated power. It's a matter of using the carrot rather than the stick. GMP is also devising a plan to allow apartment dwellers and others who live in non-PV-compatible structures to lease panels in one of GMP's community solar plants. The financial benefit is identical to having leased panels on your own roof, and even better because the panels "follow" you if you move to a new address.
    Updated 2014-07-04 at 02:37 PM by ToddRLockwood
  8. tezco's Avatar
    Our utility, Xcel, wants our feckless PUC to essentially get rid of net metering. (It's just so hard to deal with all of that solar energy coming into the grid.) Meanwhile, they are building Xcel-owned PV arrays like they are going out of style. You will be able to "buy" this really green energy from Xcel for a premium of something like 16 cents per kWh (as opposed to 11 cents per kWh for "dirty" electricity. (Of course, no problem dealing with company-owned solar electricity as it dumps onto the grid --wink wink.) Just another fast one, from your local utility who is doing everything to ensure that there is no further erosion of their monopoly.
  9. Robert.Boston's Avatar
    For those who think net metering is good, consider this: you drive east across a toll bridge, paying the toll. When you drive back west, do you expect to have the toll rebated? Of course not; you used the bridge, and therefore you should help pay for its cost.

    Whether you use the grid to buy power when you consumption exceeds your generation, or to sell power when the reverse occurs, you are "driving across the bridge" and should help pay for the costs. The monthly account fee for residential is NOT a grid fee; it covers costs such as your meter, reading your meter, sending you bills, and other general and administrative charges. The cost of the distribution and transmission networks are (in residential rates) entirely placed on a per-kWh charge.

    I agree with Todd: we should eliminate net metering and change the residential tariffs fundamentally. There should be three components:
    (a) net energy, a ¢/kWh charge set by the hourly wholesale price of power established by an independent clearinghouse*;
    (b) interconnection charge, with a fixed component and $/A charge for the service rating of your panel (which relates to your maximum potential draw on the grid, for which the local distribution network has to be planned); and
    (c) grid usage charge, based on your monthly peak energy draw from the grid, reflecting the cost of maintaining generation capacity reserves and transmission capacity on the system.

    This approach is essentially the same as is used for large commercial customers now (although very few customers see the real-time energy price, as they ought).

    * The clearinghouses already exist in most of the US, overseen by Regional Transmission Operators.
  10. CalDreamin's Avatar
    I agree that residential rates should be fundamentally restructured, something along the lines that Robert indicated.

    If I had a grid peak power usage charge, I'd modify how I charge my S 85. I've got it set to charge to 80% @ 10 kW (240V x 40A) starting at midnight, during off peak TOU rates. If I was charged for a peak usage draw, I would set my Tesla to charge at a lower kW rate.

    Here's how PG&E breaks down the monthly $4.44 fixed charges I have with net metering
    Distribution $3.70
    Public Purpose Programs $0.20
    Nuclear Decommissioning $0.01
    Generation $0.53

    I expect the fixed charges would be more than this if they fairly accounted for the fact that I use the grid as a big battery.
    Updated 2014-07-05 at 11:00 PM by CalDreamin
  11. tezco's Avatar
    Robert's bridge analogy is completely flawed. When I drive either way across the bridge I am a consumer, and expect to pay. When I draw electricity from the grid, I am also a consumer and expect to pay. On the other hand, when I send electricity to the grid, then I am become a merchant with a product to sell. It's up to our PUC to determine what my power is worth to other users. Our utility thinks my power is worth next to nothing, but in the same breath they want to charge consumers a premium for the power that they produce from their own PV arrays. If Xcel thinks my power is only worth $0.003 per kWh, (their latest argument for locally produced power going to the grid) then they shouldn't be allowed to charge more for their own PV power (Xcel thinks their green PV power is worth $0.16 per kWh) BTW, in Colorado, all users pay a separate monthly fee to Xcel for the grid infrastructure, also set by the PUC, so even someone who balances out on net metering pays the same infrastructure fee as did their next door neighbor.
  12. slipdrive's Avatar
    XCEL can get equity returns from investing in PV farms. You won't find any memos on that in the files... Nobody has mentioned much about grid benefits of especially west-facing residential PV, which can match residential usage much better. As long as residential systems are sized no more than average annual consumption, the grid impacts are minimal. "Virtual Net Metering" is a much different story. Grid is invoked at both ends. What the Edison Institute studied fro the utility members is the impact of "lost" revenue to pay dividends. IOU's have to keep feeding themselves. Owning and operating is the business model.... and business models can change.
  13. tezco's Avatar
    Yes, we're limited to 120% of annual, so with 1% degredation each year we will end up about break even. Of course, peak production is in the spring when the panels are cool, so we may not quite cover our August AC needs after 20 years of panel degredation. Net metering is such a vague entity -- here we never actually get paid for our electric production if we choose the solar bank option. But if we chose yearly payout we only make a few cents per kWh, and Xcel zeros out the account at the end of the year, just when solar production is at it's worst.
  14. nwdiver's Avatar
    Quote Originally Posted by tezco
    Robert's bridge analogy is completely flawed. When I drive either way across the bridge I am a consumer, and expect to pay. When I draw electricity from the grid, I am also a consumer and expect to pay. On the other hand, when I send electricity to the grid, then I am become a merchant with a product to sell. It's up to our PUC to determine what my power is worth to other users.
    Roberts bridge analogy is only applicable to Distributed Generation customers that ARE NOT net 'Positive'. If you Produce 1000kWh, Export 1000kWh and Import 1000kWh your bill should not be $0 + connection fee. I do agree that exported power is worth more than $0.003/kWh but it's not sustainable to credit distributed generation customers the same rate they are charged.

    If you want to have not have an electric bill you should be producing more power than you consume... ~25% more.
  15. tezco's Avatar
    Net metering at equal rates for incoming and outgoing power along with renewable energy credits are all leftovers from the days that high incentives were necessary in order to entice homeowners to shell out the big bucks to install solar. In our state, this was leveraged by state mandated targets for renewal energy. Now our utility wants to completely disincentivize customer installed solar since it has now become profitable to build their own solar farms, especially if they can convince our PUC to allow sale of this power at premium prices. They already have made a tidy profit on windpower using the same marketing ploys. Originally, windpower was marketed to consumers at cost, and in the beginning the rate was higher than "dirty" power. As windpower costs decreased, suddenly windpower customers were paying less for their electricity compared to non-windpower customers. Horrors of horrors, what to do? Run to the PUC and get that rate structure changed pronto! Suddenly windpower was "a premium power source" that required a huge rate increase "in order to properly reimburse the utility". Same fate awaits homeowner solar, even though grid costs are lower with distributed power compared to far away solar farms. It will be interesting to see whether Xcel's proposed rate structure for net metering will be applied to those of us that invested in solar when the costs were high. Since we're limited to 120% of our annual power needs, it won't be possible to increase the size of our arrays to generate that extra "25%".
    Updated 2014-07-07 at 09:24 PM by tezco
  16. nwdiver's Avatar
    It's important to remember that your PUC works for YOU; Your utility commissiononer works for YOU; Several attempts to levy fees in Solar generators have been successfully fought by public outcry. Please, Please, Please... attend public hearings; make your voices heard.
  17. omgwtfbyobbq's Avatar
    I think part of the problem is that some utilities, specifically those with summer/afternoon peaks in usage, have gotten something of a free ride from solar.

    We need 100% TOU pricing based on what the utility is paying other generators for. If I bias my energy use so I use a lot of inexpensive off-peak energy, and sell a lot of expensive on peak energy, then I should make a profit like any other generator.

    This is where it falls apart for some utilities. They don't want to pay small generators like they pay large generators. They want to keep owners who have solar panels classified as customers, which means charging them extra for having solar panels, on top of their normal grid interconnect fees, and not paying them what they're paying other generators at the same time of day by tossing everything in the same net metering bucket.

    This is pure profit driven BS IMO, and is both anti-capitalist and perpetuates inefficient and corrupt oligopolies. I think any utility that doesn't let owners of PV panels participate as generators is asking for what they get. Given where solar panel prices have gone, and where battery prices are going, it's only a matter of time before homeowners start disconnecting if utilities continue to treat them strictly as customers. Assuming of course there aren't laws that prevent them from doing so.

    http://www.collective-evolution.com/2014/03/09/florida-makes-off-grid-living-illegal-mandates-all-homes-must-be-connected-to-an-electricity-grid/

    With that said, it's far easier to move energy use into the daylight hours (in order to minimize storage/battery costs) if you don't have an EV, since most charging is done in the evening. Hopefully Tesla can break this dependency by expanding the supercharger network, and also providing energy storage that's less expensive once the giga-factory starts rolling.
  18. tezco's Avatar
    nwdiver: "It's important to remember that your PUC works for YOU; Your utility commissiononer works for YOU; Several attempts to levy fees in Solar generators have been successfully fought by public outcry. Please, Please, Please... attend public hearings; make your voices heard."

    In today's newspaper: "Tim Flanagan -- an attorney who has represented Xcel in the past...said the PUC tends to be sympathetic to industry concerns because it is staffed by people who come from industry backgrounds." (Boy, is that an understatement.)

    Also reported "Solar energy firm withdraws from Colorado -- Citing unfair market condition and blaming Xcel Energy and the Public Utilities Commission for placing enromous hurdles on the solar services industry, one Boulder company has elected to altogether bow out of the solar installation business in Colorado....According to the latest forecast, Xcel will install about 50 megawatts (roughly 250 acres) of solar panels this year. So far in 2014, Lighthouse and its competitors across the state have been able to bid for commercial contracts covering a total of 7 megawatts--the same amount Lighthouse alone installed in 2013."

    The article goes on to note that all Xcel customers must pay a 2% solar surcharge to fund the renewal energy incentives (monies which Xcel is now using to help fund their expansion of their monopoly into the solar field). Color me cynical, but....our PUC is a fox guarding the chicken coop.
  19. nwdiver's Avatar
    Quote Originally Posted by tezco
    Color me cynical, but....our PUC is a fox guarding the chicken coop.
    All the more reason why it's important to stay cognizant of what's going on in your community and attend public comment sessions. The utility commissioners are usually elected officials.
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