I don't know much about this so I am posting this more as a question. Based on the above Bloomberg article I posted, I get the sense that that TOU rates in the middle of the day will drop to zero in CA, effectively homeowners getting no credit at all for any excess energy shipped to the grid. But homeowners will be charged what ever prevailing rates in the evening hours when they rely on the grid. So essentially all solar systems will become more or less useless unless backed by batteries. So now Solarcity and others will need to include the cost of the battery in their solar system costs in an attempt to beat the non-solar utility bill, which could make this challenging. Am I on right track on this?
Also there is no grandfathering of anyone in this, correct? TOU rates apply to ALL consumers it appears, old solar, new solar, non solar.
TOU is not the same thing as wholesale prices. TOU is retail, and it is the same buying and selling. So it is highly unlikely that any TOU would go to zero. Why? That would motivate huge demand for home batteries not to mention EVs to harvest free electricity. And here I am not talking about just solar owners. All ratepayers would benefit from harvesting free electricity. Dry your closthes, heat your water, defrost your fridge, etc. The only time that zero TOU makes economic sense is when wholesale prices are negative. Then the utility can make money providing load. But the utility still needs to make 7c or so to cover transmission and distribution costs.
So once you recognize that TOU is the price at which retail power is sold, it becomes clear that the utilities do not have an incentive to underprice it. It is far different with a feed-in tariff, which only applis to buying power from customers not selling. A utility does have an incentive to underprice a FiT, but not a TOU. So with a TOU, you get demand response across the customer base which serves to level out demand net of supply throughout the day.
Much hand wringing has been done over the so called duck curve. I fail to see it as something that is bad. Rather it is an opportunity to set up intelligent rate plans that allow consumers to benefit from lower prices and avoid higher prices. So why should consumers run their closthes dry or charge their car in the duck's? That's the sort of stupidity that flat rate plans encourage. But in a TOU plan I can save 5c or whatever over the flat rate just by charging my car in the early morning or maybe midday. That to me is a terrific opportunity.
There has been this question about how solar benefits nonsolar ratepayers. Well if I get to save a few cents per kWh charging my car at midday because of an abundance of solar, I'm happy about that. That's a solar benefit to me. If I own solar and generate a little more than I need, I'm happy if some other retail rate payer gets to benefit from saving a few cents off my surplus power. Moreover, it is not a total loss. I may not be at home on certain days so that I charge my car, but somebody else is. Then on a day when I am home, I get to charge my car for cheap too. So over the course of the week I get the same benefit. So maybe I'm charging at 20 kW but my solar system only provides 4 or 5 kW, so in one day of charging, I'm getting the benefit of 4 or 5 days of solar production all at the same cost. So if I'm withdrawing power at the same time of day as I'm generating power, there is no net cost of power. I'm just time shifting over the days of the month. But even if I am not netting out in this way, if I am conscientious about making the most of TOU rates I have lots of opportunities to benefit from low rates and avoid high rates. If SolarCity is helping me integrate solar, batteries, smart theromstat, and a smart water heater, then I am well on my way to optimizing my power bill. I just need Tesla to program my car for smart charging too.
This is also an opportunity for SolarCity. They are diversifying their product line. There are opportunities for repeat sales with existing customers to add batteries and smart devices. If SolarCity is going to install hot water heaters, what about refrigerators and other appliances? How about HVAC systems? The key thing is making sure it all integrates flawlessly. This was a huge selling point for Apple. Home energy services are not even limited to solar customers. TOU plans that can be exploited by smart devices create a home energy market even among homes that cannot install solar. In this market, service and integrated products are key. So I'm not saying that SolarCity shouldgo in all these directions. They need to explore what makes most sense. But I do think that home energy services could be a very good theme around which to innovate and build a franchise.
