Customers that have invested in solar under NEM 1.0 and 2.0 may be forced into a regulatory scheme that would threaten their return on investment, based on guidance from the California Public Advoc…
I mean, the existing scheme is economically-problematic, because it means that non-solar-generation users are subsidizing solar-generation-users grid connections.
The utilities have two separate set of costs, one from providing the grid connection, and the other from providing power over it.
Traditionally, because the two were linked for practical purposes, utilities just generated their revenue from charging a fee based on electricity use.
But they became decoupled when home solar power generation became more-common. That caused people who were doing solar power generation to not just not pay for electricity being provided – which is fine, they’re providing that – but also to not pay the costs of keeping the grid available, which is not. Under the traditional billing system, those grid maintenance costs were transferred to people – who statistically are poorer, another point of contention – weren’t doing home solar power generation.
Having a grid connection provides value to solar generation users. It means reliability, and ability to scale up use on demand. It costs something to provide that. And the folks who are incurring the cost and benefiting from it should pay those costs.
And yeah, I agree that it makes solar less-advantageous, and some rooftop solar users got sold a bill of goods by rooftop solar installers who promised that their rooftop solar would make more economic sense than it did, because they could exploit that billing inefficiency. But the point is, it was a bad policy, and rooftop solar installers had no ability to guarantee that it would continue.
If you’ve got rooftop solar, you can still avoid paying for the electricity that you’re generating rather than pulling from the grid. You just have to pay your share of the grid maintenance cost. Or, if you really don’t need that connectivity and you legitimately feel that you’re better off off-grid – which I suspect is probably not the case for most people – you can just cut off from the grid, rely entirely on your local generation capacity of whatever sort. The only thing you can’t do is have grid access and have non-solar-rooftop generation customers subsidize that grid access.
We already pay a grid connect fee and on top of that we purchased over 10k in hardware and we make it so their needs to be less grid upgrades and we provide our excess power for 8 cents a kw for NO hardware cost to them. Sounds like they are getting a nice deal. But of course that is not nice enough for PG&E they want it all.
Could easily just charge separate lines on the bill, just like they do for everything else.
1 - $0.0x c/KWh for line maintenance - this charges on both incoming and outgoing power.
2 - $0.xx c/KWh for power usage - this charges only on the incoming side.
3 - $xx flat fee every month for administration of your account.
Charge what things cost and it won’t matter how your use your energy.
I agree – that decoupling of fees is what’s happening and is what the article is complaining about.
EDIT: I’d also add I kind of feel like this pattern is turning into something of a chronic problem for California. The same sort of thing happened with EVs getting to ignore carpool rules.
California tells people that if they buy an EV, they can ignore carpool rules and use the carpool lane without carpooling. Advocates get this past voters by billing it as being “green”.
EV companies sell a relatively-costly product, implying that the policy will continue ad-infinitum. They can charge a premium because they’re giving special road access bundled with the vehicle. This is lucrative for EV manufacturers; they’re actually profiting by selling access to a state service that they aren’t paying for.
Well-to-do people do the math and figure out that while the car costs more, it’s a pretty cheap deal for your own road. They buy the car.
California announces that the policy is going to expire. People who paid more and had an expectation of never-ending special road access are angry.
There are over 400,000 drivers in California who currently have decals - many of them bought their clean air vehicle to speed up their commute so losing that privilege is a big deal.
A Tesla driver says, " It is frustrating. Like I said the main reason for the decision is driving in Bay Area traffic."
I’m in the Great Republic of Texistan, and that split billing is how it works here: I pay the power delivery people $x+($0.0xkwh), and then the power generator $0.0xkwh.
The screw-you happens because the power buy back from the power company is a percentage of what I pay the REP (power company). So I get something like 85% of half the cost of a KWH back for every KWH I put back on the grid, and pay full sticker price for anything I import.
Solar is a piss-poor worthless investment here, simply because power isn’t expensive enough, and the payback for surplus isn’t even a McDouble at this point. Average monthly credit tends to be under $20 on a ~$130 bill. Better than nothing but the solar generation + buyback won’t ever pay for the panels before they’re EOL. Nevermind if I had spent $15k on batteries to go with it.
It’d be a shame to see that happen in other places that have historically done much better simply because of unsustainable costs due to well, greed and incompetence.
That’s fair. In ONCOR territory, the buyback offers I had last time I renewed a plan were either a fraction of what you pay but no limits on how many kwh you can sell, or what you pay your REP but capped to a comically low number of kwh a month, or the wholesale rate at the time the kwh was put back on the grid.
Essentially the options are shit, probably shit, and almost certainly shit.
I did the math on the batteries, and the solar install would have been like four times the cost it was without batteries: ~$8000 for the panels, but nearly $20k more for enough batteries to provide peak load and sufficient storage along with the added installation costs for the batteries.
Problem was/is that even at $0.13/kwh to pull from the grid, the payback time was basically a decade longer than the batteries are going to last based on how much power I actually use, so shitty buy back or find some way to burn the extra power it is, then.
(Disclaimer: prices probably have changed in the past 3 years, but probably not enough to make the math wrong.)
If the carpool stickers had come with a 20 year guarantee then nobody could reasonably be upset about the rules changing later because “forever” turned out to be too good to be true. This would be like solar, except that they want to change the rules later anyway.
If they simply left the original EV carpool stickers grandfathered but stopped giving out new ones, people who missed their chance would be upset. But the program would have worked exactly as intended, to incentivize early adoption of EVs by giving out a priceless benefit. It should never have gone on as long as it did, but government reacts slowly.
The carpool lanes were very under utilized. Hybrids and later EVs were also slow to be adopted, and the state wanted this adoption accelerated due to air quality and just general environmental consciousness.
So the state decided to add the carpool benefit, which solved two problems.
Now that EVs are far more abundant, that policy is getting revisited. Which is fair, because the carpool lane can only support so many before it just gets clogged like the main road. And people don’t necessarily need the encouragement to get EVs anymore.
California announces that the policy is going to expire. People who paid more and had an expectation of never-ending special road access are angry.
This is the step where your comparison to solar (at least in California) breaks down. I’m not a California resident, but from what I understand under the NEM 1 and NEM 2 rules there is NO expectation the preferential net metering will last forever. Solar customers were specifically told that putting in solar during NEM 1 would guarantee those terms for 20 years from install date. Same thing for NEM 2, the rules would apply for 20 years from the install date. After the 20 year period, you’d be subject to whatever net meter would be offered to new customers, which could be none. source
What this proposition proposes is cutting that 20 years to 10 years from install date:
"Convert NEM 1.0 and 2.0 accounts to the NBT either upon sale of a home or after 10 years of interconnection. " source
So customers that took a large financial risk installing solar that are coming out ahead may now have the deal shifted out of their favor. How is that fair to the solar customers? Worse, the knock on effect will destroy the trust in state government incentives in the future. Why would any citizen risk a long term outlay based on policy if the state government may decide one day they don’t want to hold up their end of the deal anymore?
For pge the distribution fees are 5x the actual generation fees, because while you can get power from other companies, pge owns all the lines and milks them dry.
You’ve articulated well a lot of good points, but you’re missing a few key considerations. One elephant in the room is that the Investor Owned Utilities (which cover the vast majority of accounts in California) are abusing their monopoly powers as much as possible (including regulatory capture). That is sadly inextricably linked with the resentment felt by their solar customers, even as it is also felt by all of their non-solar customers.
You’re talking about the kind of tradeoffs that make sense in an ideal system, pricing things according to what they actually cost to provide. But the IOUs price things at “how much can we get the CPUC to allow us to charge?” And they love to stoke class warfare politically when it suits their business purposes. It’s just one more area where the actual problem is the billionaires (or just call it capitalism) against the 99% but they keep the water too muddy for most people to see it.
I believe it’s also still generally either illegal or at least infeasible to disconnect from the grid entirely in most of urban and suburban California, because it’s tied to occupancy permitting. I think the best hope of ending the madness does lie in that direction though. Solar customers tend to be much wealthier than non solar customers, which in aggregate means many of them will have the means to go full battery off grid as the pricing disparity continues to grow. This loss of legally-mandated captive market is the only chance to force monopolies to behave better.
Sounds good, but it essentially means you would then have to buy and maintain the method of power generation and delivery back to a company to sell it to someone else. I totally get remaining grid connected is important, but those grid connected systems are supplying a whole lot of power back to the grid. Perhaps if you generate more than you use, the power company should pay you to maintain your generators and infrastructure.
Transparent pricing and not itemized billing could help a lot (and allow for better application of fees based on use case).
I mean, the existing scheme is economically-problematic, because it means that non-solar-generation users are subsidizing solar-generation-users grid connections.
The utilities have two separate set of costs, one from providing the grid connection, and the other from providing power over it.
Traditionally, because the two were linked for practical purposes, utilities just generated their revenue from charging a fee based on electricity use.
But they became decoupled when home solar power generation became more-common. That caused people who were doing solar power generation to not just not pay for electricity being provided – which is fine, they’re providing that – but also to not pay the costs of keeping the grid available, which is not. Under the traditional billing system, those grid maintenance costs were transferred to people – who statistically are poorer, another point of contention – weren’t doing home solar power generation.
Having a grid connection provides value to solar generation users. It means reliability, and ability to scale up use on demand. It costs something to provide that. And the folks who are incurring the cost and benefiting from it should pay those costs.
And yeah, I agree that it makes solar less-advantageous, and some rooftop solar users got sold a bill of goods by rooftop solar installers who promised that their rooftop solar would make more economic sense than it did, because they could exploit that billing inefficiency. But the point is, it was a bad policy, and rooftop solar installers had no ability to guarantee that it would continue.
If you’ve got rooftop solar, you can still avoid paying for the electricity that you’re generating rather than pulling from the grid. You just have to pay your share of the grid maintenance cost. Or, if you really don’t need that connectivity and you legitimately feel that you’re better off off-grid – which I suspect is probably not the case for most people – you can just cut off from the grid, rely entirely on your local generation capacity of whatever sort. The only thing you can’t do is have grid access and have non-solar-rooftop generation customers subsidize that grid access.
We already pay a grid connect fee and on top of that we purchased over 10k in hardware and we make it so their needs to be less grid upgrades and we provide our excess power for 8 cents a kw for NO hardware cost to them. Sounds like they are getting a nice deal. But of course that is not nice enough for PG&E they want it all.
Could easily just charge separate lines on the bill, just like they do for everything else.
1 - $0.0x c/KWh for line maintenance - this charges on both incoming and outgoing power.
2 - $0.xx c/KWh for power usage - this charges only on the incoming side.
3 - $xx flat fee every month for administration of your account.
Charge what things cost and it won’t matter how your use your energy.
edit: formatting
I agree – that decoupling of fees is what’s happening and is what the article is complaining about.
EDIT: I’d also add I kind of feel like this pattern is turning into something of a chronic problem for California. The same sort of thing happened with EVs getting to ignore carpool rules.
California tells people that if they buy an EV, they can ignore carpool rules and use the carpool lane without carpooling. Advocates get this past voters by billing it as being “green”.
EV companies sell a relatively-costly product, implying that the policy will continue ad-infinitum. They can charge a premium because they’re giving special road access bundled with the vehicle. This is lucrative for EV manufacturers; they’re actually profiting by selling access to a state service that they aren’t paying for.
Well-to-do people do the math and figure out that while the car costs more, it’s a pretty cheap deal for your own road. They buy the car.
California announces that the policy is going to expire. People who paid more and had an expectation of never-ending special road access are angry.
https://abc7news.com/california-clean-air-vehicle-decals-for-carpool-lane-access-likely-expiring-2025/14604142/
And they 100% should.
I’m in the Great Republic of Texistan, and that split billing is how it works here: I pay the power delivery people $x+($0.0xkwh), and then the power generator $0.0xkwh.
The screw-you happens because the power buy back from the power company is a percentage of what I pay the REP (power company). So I get something like 85% of half the cost of a KWH back for every KWH I put back on the grid, and pay full sticker price for anything I import.
Solar is a piss-poor worthless investment here, simply because power isn’t expensive enough, and the payback for surplus isn’t even a McDouble at this point. Average monthly credit tends to be under $20 on a ~$130 bill. Better than nothing but the solar generation + buyback won’t ever pay for the panels before they’re EOL. Nevermind if I had spent $15k on batteries to go with it.
It’d be a shame to see that happen in other places that have historically done much better simply because of unsustainable costs due to well, greed and incompetence.
Depends on where you live in Texas. My solar panels cut my summer bill in half, and my winter bill is usually zero.
If my power company didn’t pay me a decent buyback amount, I’d invest in an enphase battery and offset the cost of running appliances at night.
That’s fair. In ONCOR territory, the buyback offers I had last time I renewed a plan were either a fraction of what you pay but no limits on how many kwh you can sell, or what you pay your REP but capped to a comically low number of kwh a month, or the wholesale rate at the time the kwh was put back on the grid.
Essentially the options are shit, probably shit, and almost certainly shit.
I did the math on the batteries, and the solar install would have been like four times the cost it was without batteries: ~$8000 for the panels, but nearly $20k more for enough batteries to provide peak load and sufficient storage along with the added installation costs for the batteries.
Problem was/is that even at $0.13/kwh to pull from the grid, the payback time was basically a decade longer than the batteries are going to last based on how much power I actually use, so shitty buy back or find some way to burn the extra power it is, then.
(Disclaimer: prices probably have changed in the past 3 years, but probably not enough to make the math wrong.)
If the carpool stickers had come with a 20 year guarantee then nobody could reasonably be upset about the rules changing later because “forever” turned out to be too good to be true. This would be like solar, except that they want to change the rules later anyway.
If they simply left the original EV carpool stickers grandfathered but stopped giving out new ones, people who missed their chance would be upset. But the program would have worked exactly as intended, to incentivize early adoption of EVs by giving out a priceless benefit. It should never have gone on as long as it did, but government reacts slowly.
That’s a pretty weird rant on EVs.
The carpool lanes were very under utilized. Hybrids and later EVs were also slow to be adopted, and the state wanted this adoption accelerated due to air quality and just general environmental consciousness.
So the state decided to add the carpool benefit, which solved two problems.
Now that EVs are far more abundant, that policy is getting revisited. Which is fair, because the carpool lane can only support so many before it just gets clogged like the main road. And people don’t necessarily need the encouragement to get EVs anymore.
Nothing is permanent.
This is the step where your comparison to solar (at least in California) breaks down. I’m not a California resident, but from what I understand under the NEM 1 and NEM 2 rules there is NO expectation the preferential net metering will last forever. Solar customers were specifically told that putting in solar during NEM 1 would guarantee those terms for 20 years from install date. Same thing for NEM 2, the rules would apply for 20 years from the install date. After the 20 year period, you’d be subject to whatever net meter would be offered to new customers, which could be none. source
What this proposition proposes is cutting that 20 years to 10 years from install date:
"Convert NEM 1.0 and 2.0 accounts to the NBT either upon sale of a home or after 10 years of interconnection. " source
So customers that took a large financial risk installing solar that are coming out ahead may now have the deal shifted out of their favor. How is that fair to the solar customers? Worse, the knock on effect will destroy the trust in state government incentives in the future. Why would any citizen risk a long term outlay based on policy if the state government may decide one day they don’t want to hold up their end of the deal anymore?
They do that now.
For pge the distribution fees are 5x the actual generation fees, because while you can get power from other companies, pge owns all the lines and milks them dry.
You’ve articulated well a lot of good points, but you’re missing a few key considerations. One elephant in the room is that the Investor Owned Utilities (which cover the vast majority of accounts in California) are abusing their monopoly powers as much as possible (including regulatory capture). That is sadly inextricably linked with the resentment felt by their solar customers, even as it is also felt by all of their non-solar customers.
You’re talking about the kind of tradeoffs that make sense in an ideal system, pricing things according to what they actually cost to provide. But the IOUs price things at “how much can we get the CPUC to allow us to charge?” And they love to stoke class warfare politically when it suits their business purposes. It’s just one more area where the actual problem is the billionaires (or just call it capitalism) against the 99% but they keep the water too muddy for most people to see it.
I believe it’s also still generally either illegal or at least infeasible to disconnect from the grid entirely in most of urban and suburban California, because it’s tied to occupancy permitting. I think the best hope of ending the madness does lie in that direction though. Solar customers tend to be much wealthier than non solar customers, which in aggregate means many of them will have the means to go full battery off grid as the pricing disparity continues to grow. This loss of legally-mandated captive market is the only chance to force monopolies to behave better.
Sounds good, but it essentially means you would then have to buy and maintain the method of power generation and delivery back to a company to sell it to someone else. I totally get remaining grid connected is important, but those grid connected systems are supplying a whole lot of power back to the grid. Perhaps if you generate more than you use, the power company should pay you to maintain your generators and infrastructure.
Transparent pricing and not itemized billing could help a lot (and allow for better application of fees based on use case).