Monday, April 19, 2010

One Slice of Bread

Today I got a letter from PG&E telling me that they had decided how much they will pay me for the extra power my solar PV system generates, above what I use, starting next year. A couple months ago they sent a letter saying that they would start paying their net metering customers in 2011 at the annual true-up date. Up until this year, our solar PV system has been generating between $30-$134 more in credit than our house consumes. We kind of viewed at as our contribution to greening the planet since it hasn't been all that much.

The house isn't carbon neutral, though, we use around 1000 kwh/year more power from the grid than we generate. The difference is that we generate more power during the summer in the afternoon and evening than we do during the winter and in the morning. Due to time of day metering, PG&E pays us around $0.30/kwh for summer solar-generated peak power but only charges us around $0.09 for offpeak and winter power. It's a pretty good deal for us all things considered, though it wouldn't be if we had to use air conditioning during week days in the summer. We get the favorable rate because the folks in the Central Valley need to have their air conditioners on all day. So they use more power during the peak.

In their letter, PG&E proposes to pay its net metering customers $0.08/kwh for credit they incur above what they use. They claim this is consistent with the California Public Utilities Commission mandate in AB 920 (the law that requires net metering customers to be compensated for unused credit they incur) requiring the compensation to "set the rate for generation, including renewable characteristics, without shifting costs to other customers". I have a bit of trouble seeing how their math works out. If the power is worth $0.30/kwh to them in the summer, then how does it suddenly become worth only $0.08/kwh when they need to pay me hard money for it instead of trade? It's not like they don't have the information in their billing systems about when I generate the power, they could easily prorate the reimbursement based on time of use metering, just like they do with the cost.

The larger issue here of course is that such measly reimbursement rates aren't likely to encourage homeowners or businesses to install more solar. But this has been consistent with PG&E's position all along. The reimbursement rates quoted in their tenders for renewable energy systems over 1 mw a few years ago were similarly unattractive for investors, and they were fixed for 20 years. Contrast this with Germany and Spain, where feed-in tariffs for renewable power 3-4x fossil-generated power, set for 30 years have seen an explosion of investment in renewable systems. The net metering reimbursements are a kind of feed-in tariff, but not a particularly attractive one for individual investors, such as myself, who would like to maximize our solar generating potential but also earn some money on it. PG&E has been happy to provide net metering in trade, but when it comes to paying real money for distributed, small-scale power generation, well, that's another story.

I probably shouldn't complain, since the credit is actually just a mathematical construct due to PG&E's tariff structure. In the spirit of "half a loaf is better than none", I guess I'll take this slice of bread they're offering with gratitude, and hope the State Legislature and PG&E figures out some other way to encourage more solar.

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