Notice to California Solar-Power Owners about AB-327...

Notice to California Solar-Power Owners about AB-327...

Well, it looks like if you own a solar-power-system (like myself), we will soon be at the mercy of California Public Utility Commission to decide our fate.

Assembly Bill AB 327 could have a negative effect on solar-power customers, and increase rates for those of us trying to reduce greenhouse gasses, save energy, and help provide power for the weakened and overburdened California power grid. Unfortunately, no one is really sure how it will effect current solar-power customers at this point, as rates are not part of the bill's language. However, it appears if you currently are getting a rebate via net-metering, you will now have to at least pay a per month fee to help maintain the grid. Otherwise, the primary purpose of the bill sounds very much like another 'Nanny-State' law that forces those who choose to use less energy, to subsidize those who waste a LOT!
It will furthermore help subsidize residents and businesses who 'chose' to live further away from the coast and waste energy, (and who paid far less for their homes and businesses), by inturn charging higher rates for those who paid FAR MORE to live near the coast, and conserve energy. Thus, if there was any reason left in this state to conserve, be wise, work hard, and be conscientious about our planet/environment, it looks like there isn't anymore. ;-(

Governor Brown hasn't signed the bill yet, however, the chances look slim that he won't.

firerock | September 11, 2013

Thanks for the news. The State will always find ways to squeeze money from us.

mdemetri | September 11, 2013

Yes, this is a travesty. The bill allows the California utilities to charge solar homes $10 per month to "maintain the grid" as well as potentially allow the utilities to unilaterally alter the net metering agreements that solar producers have already signed. What a joke. Meanwhile, we provide energy at peak time with the highest cost per kwh, yet are paid at the lowest overnight cost per kwh for excess generation (ie ~0.038 per kwh versus upto 0.47 per kwh at peak time). Unbelievable.

Rooftop solar is a disruptive technology that kills the old business model of the investor/profit driven California utilities. The politicians are simply trying to keep their profits at the expense of those who are using renewables. The utilities are afraid of the free market forces created by individual solar generators.

If I have to pay for upkeep of the grid, then I should be able to sell my excess electricity at market rates during peak time, not some ridiculous overnight price of ~0.038 per kwh. Let the free market work.

I suggest that we all write Jerry Brown and demand that he not sign the bill. The bill should be encouraging solar, not inhibiting adoption.

If he signs the bill, I may just have to buy a battery (from Tesla?), store my solar energy to use as needed and cut myself off of the grid. This would be far more expensive, but at least i would not feel that I am lining the pockets of the utilities.,0,786...

TikiMan | September 11, 2013


No doubt! When power deregulation happened a decade ago, I was completely against it. After years of price gouging, fraud, ENRON, brown-outs, etc (all of which I predicted), now these crooks want to have their 'cake and eat-it-too' fake free-market monopoly!

As it is, where I live, residential solar-power has almost completely made up for the higher daytime loss of great debocal known as the San Onofre Nuclear Generating Station (SONGS), which has been plagued by poor quality control, and a half-billion dollar screw-up, which ended its fate. Now as a 'thank you' for saving Edison's pethetic sorry asses, we get this BS!

If anything, solar-power owners should have the right to sell their power back to the grid at double the price of the highest TIER rate, just as a bonus for saving the grid.

TikiMan | September 11, 2013

Go figure... almost a hunded years after their deaths, Edison is still screwing the public and Tesla!

Brian H | September 12, 2013

Moonbeam: "Those are my principles -- and if you don't like them, I have others!"

AmpedRealtor | September 12, 2013

This is similar to what APS is doing in Arizona. They claim solar users do not pay their fair share to maintain the grid, which is utter nonsense. I pay monthly meter connection and meter reading fees in addition to all kinds of taxes, now they want to add an additional surcharge on solar customers to help APS recoup lost revenue. That's all it is - a money grab. Having solar is saving me $1,200 over paying APS for 100% of my power, so now APS wants a piece of that back - they want a piece of something they are not entitled to.

In the case of APS and Arizona, current solar customers TOU plans and terms will be grandfathered into the new plan for a period of 20 years. So in that respect I'm happy, but future solar customers are going to get screwed and a lot of installers are going to either go out of business or lay off hard working people.

dtesla | September 12, 2013

First I have enough PV to cover my home and MS on an annual basis. I also consider myself pro solar (and MS). That being said....

Let us say everyone has enough PV to cover there home (and EV?). I would consider this to be a good thing. However, we all want power at night and/or cloudy days. This would mean we still need 90-100% of our current generating capability. So 100% of traditional power generation would be peak generation, which is expensive. You also want to be connected to the grid to get the power. Someone has to pay for all that... and that person is the consumer.

Batteries/storage doesn't eliminate this problem. When it snows I get 0 production for up to a week (I live in VA). Batteries/storage can only do so much.

This is one of the problems with intermittent renewable energy. It is a necessary evil in my opinion.

keichhor | September 12, 2013

Brings a tear to my eye! Just another benefit we get from living in the great state of California!

We are always blessed with more fees, more taxes, more costs....Just have to find the way around them...legally of course. If we have solar, can't we just go off grid and avoid any costs what so ever?

mdemetri | September 12, 2013

Tikiman: I agree, we should get a bonus for saving the state from brown outs that most certainly would have occurred because of the colossal mis-management at San Onofre Nuclear by the utilities.

dtesla: The problem here in California is that the electric companies want it both ways. Solar provides power to the grid at peak demand time here in Southern California, which just also happens to be the most expensive per kWh if bought on the open market from traditional producers. Yet, instead of paying the residential solar producer for his/her excess production at the same rate they buy from traditional producers during the day, they pay us the lower average overnight cost of only ~0.038 per kWh. So we are providing electricity to the grid at a huge mark down compared to the true daytime wholesale price. Thus, we are already greatly subsidizing the Grid. Yet they want more from us because their revenue has been reduced!!!!!

keichhor: You can go off grid but you will need a large battery and a large enough solar system to cover the cloudy days etc. Possible, but expensive.

Let the free market reign: let me sell my excess electricity at market rates during the daytime and then let me buy back my electricity at market rates during off peak.

AmpedRealtor | September 12, 2013

APS in Arizona credits you the same rate per kWh as they charge you. The time at which that kWh was generated will determine what retail rate APS will pay. The new APS plan will lower their net metering rates to reflect a wholesale rather than a retail buyback of your excess production.

SUN 2 DRV | September 12, 2013

Tiki: Thanks for the heads up.

I'm on the Net Energy Metering plan in PG&E territory in California, and I have enough PV to cover my yearly household usage. NEM is currently a very generous plan and does make PV very attractive. Unfortunately the current NEM plan is not scalable and just won't work as PV becomes more pervasive.

I'm glad that this bill EXPANDS the number customers who can take advantage of NEM and it also gives useful guidelines to the PUC to develop a fair and workable program.

Without this revision there was a cap on the number of customers on NEM and this bill raises this by about 5x. Very good news indeed.

mdemetri | September 12, 2013


That is partly true for Time of Use SCE plans provided you are not producing more than you use averaged over 1 year. But for any excess production over 1 year, they will only pay you 0.038 per kwh even though it was generated at peak time with much higher wholesale costs.

mdemetri | September 12, 2013


That is good news, but it still does not justify charging residential solar producers for "Maintenance of the Grid" when we are already subsidizing the grid immensely.

I am confused about why you say the current NEM plan is not scalable. It is only 'not scalable' for the utilities because it lowers their monopoly derived revenues/profits. Let the free market work: once enough solar is brought on board the daytime wholesale rates will fall and then all customers will benefit.

Rte66 | September 12, 2013

Who is getting the green credits for residential solar power?
The green credits are valuable. | September 12, 2013

As always, I am glad I have SMUD as my utility. I guess I am not opposed to some fixed fee for PV owners as long as it is reasonable. Its no different than EV owners paying an annual fee to cover the road maintenance revenue lost by not buying gas (yes, I know that may not be where the money actually goes).

Business models are changing and its gonna be bumpy ride while things sort themselves out.


jnb | September 12, 2013

I am no big fan of the power companies, but as others have said, when you use power at night, you are using the grid to do so. If you use the grid, why shouldn't you pay to use it? The solution to this problem is to cancel your Edison service and disconnect yourself from the grid. If that works from you then great, you won't have to pay.

More detail:

What most people don't understand is that the cost of the power itself is a pass through. The utilities don't technically make any extra money if they sell more or less power because they simply charge what they pay for the electricity itself.

what they are allowed to charge customers for is the costs that they incur building and maintaining the infrastructure that you use to bring power to your house. Those costs are built into the rate that everyone pays (based on a complicated formula that estimates the TOTAL usage of power across the whole system and tries to figure out what to charge so that these "capital costs" are recouped by the power company on a yearly basis). If you put power into the grid during the day and use it at night, you may end up with $0 is usage charges and therefore you are not paying to maintain the facilities that you use to bring power to your house at night.

So the "usage" fee is fair if you use the system to bring power to your house.

JimAlger | September 12, 2013

A few comments.

1) In many jurisdictions it is ILLEGAL to disconnect yourself from the grid.

2) Having a "base" charge for every resident regardless of usage should cover the cost of maintaining the grid. If I conserve energy I don't get slapped with a surcharge because I did so, but if I conserve energy by providing my own I do? That's insane.

This isnt the first time this nonsense has happened. LADWP has been screaming to conserve water... fining people for watering lawns on certain days etc. So, people conserved water. Then they RAISED THE RATES because of the lost revenue caused by conservation. Think those rates ever came back down? Of course not.

Utilities could easily set up a "minimum service charge" (some already do) that helps defray the cost of the grid, but penalizing solar users who are already being used and ripped off is insanity. Whats going to happen is people will simply put in batteries and not feed the power back to the grid, causing more problems.

On the flip side, 10 bucks isn't exactly a lot of money, but as I said, a minimum bill makes more sense.

soma | September 12, 2013

So, all of you don't use electricity from the grid at all? You could basically disconnect completely and be self-sufficient?

If you even use 1 minute of electricity during the day, someone has to pay to build all the wires to your house.

Not saying what they're charging is reasonable, but also I don't think that you can get away with paying nothing, if you use the grid at other times when you need it.

mdemetri | September 12, 2013

Some appear to be mis-understanding the issue. Solar providers are already greatly subsidizing the Grid by providing excess electricity at the cheapest prices possible during peak time, when the wholesale prices paid by the utilities are the highest. This difference is pure profit for the utilities. So why should solar providers subsidize the grid further?

If they want to charge a separate maintenance fee for the grid, then solar providers should be paid the market wholesale rate that the utilities are paying every other provider during peak time of the day.

negarholger | September 12, 2013

@mdemetri - the problem is that solar does NOT produce at peak usage times, there is a time shift of a couple of hours. That causes problems for the utility. SolarCity and others are starting to offer 8kWh batteries for home solar which are sufficient to buffer the solar peak production to the peak usage in the afternoon.

negarholger | September 12, 2013

@mdemetri - look at Germany - the larges solar power producer in the world... they just moved from solar incentives to battery incentives. I was wondering why Elon was saying Germany is the most important market for Tesla... Teslas main product is battery systems not cars.

mdemetri | September 12, 2013


Peak time is different in southern vs Northern California. Here in SoCal it is from 10am-6pm, the same peak time for solar generation.

I know about Germany and that's what I want to happen here. Let solar become so prevalent that daytime wholesale prices drop for everyone else. This is the market working, but here they are trying to pop up the old model of utilities and suppress reused entail solar with this bill.

SUN 2 DRV | September 12, 2013

Medemetri Yes there do seem to many inaccuracies, invalid assumptions and emotionally driven gaps in logic presented in this thread. I started to write up a detailed response but it became too long and probably too boring for most folks.

My opinion is that PG&E's NEM is an amazingly sweet deal for the residential consumer with PV. They get compensated at the full retail rate for energy they generate up to their yearly consumption. This is WAAAAY too generous, and needs to be scaled back and consumers should get paid only the wholesale value of the excess energy they generate.

Commercial customers also encounter a Demand charge which may seem very foreign to residential customers, but may be coming their way too. Demand charges are incurred based on the maximum level of power you consumed in typically the last 12 months. In addition to paying for the total kWh energy consumed, it's fair to think about the additional cost of customers that have high peak usage, and charge them for the infrastructure needed to supply their larger need.

Consider two homes, one with a Tesla and HPWC. Both have solar size to match their total yearly consumption. The home with theTesla has a larger PV system. Their total yearly bills would each be zero. The Tesla home would pull maybe 20kw more peak power when charging than the other home. And the PV system on the Tesla home would push more peak power into the grid, especially on sunny cool spring and fall days with low local AC loads.

So the Tesla home will need to have a larger transformer and other infrastructure to support the larger peak power flows, but the net yearly energy flow is zero for both houses.

Should the owner with the higher peak power infrastructure requirements have to pay more? (He had net zero energy usage just like the other guy, so it can't be fixed by playing with the kWh rates) If so how should that be recovered? The commercial world uses Demand Charges for this... seems like a fair thing to bring to the residential space.

Adding PV to the grid also adds complexity and thus cost to running the grid. Your PV sourced kWhs require adjustment of the grid distribution equipment to keep your neighbors from experiencing overvoltage scenarios when you're generating and undervoltage scenarios when you stop generating. So the kWh you buy from the utility is more valuable than the kWh you give back to the utility in that same ToU period because your kWhs are "swimming upstream" and can cause grid instability unless the distribution network compensates for your injected energy.

So being paid the full retail rate for your kWhs as NEM currently does is being very (extremely overly) generous. Even being paid the wholesale rate for the energy component alone would be generous since your kWhs come with additional distribution network management requirements to keep the grid stable.

So my advice is to be glad that we have a generous NEM program already, and hope that they don't change it too much going forward. Because the fair, scalable and right long term thing to do would be to lower the compensation rates from where they currently are. Once they do that then they may be likely to remove the generation cap on residential PV and raise the rate for excess annual generation that you're mostly complaining about.

mdemetri | September 12, 2013

Should be "prop up" and "residential solar"; damn autocorrect.

lbjack | September 12, 2013


Great insight! The car is the packaging. Just like a book is the packaging for the publisher's main product, paper.

negarholger | September 12, 2013

@mdemetri - the houses in southern cal must have paper thin walls. In norther cal it takes 2-3 hours until the outside heat crawls through the walls and makes the A/C work hardest. Not that we have many A/C days at all. If I look at my usage besides A/C it is cooking and TV between 5pm and 10pm. Otherwise we are on the same page.
@lbjack - cars are the lure for us to shell out the high prices for battery and create enough demand to get the battery prices down and create incentives for better batteries. Best of all you have better batteries for cars then the old production doesn't just have to stop you still have a market for stationary applications. And used car batteries are paid for, but still perfect for grid applications ( PG&E has an initative for used EV batteries for grid buffering ). The world car business is about one trillion $, the worlds electricity is a tens of trillons $ business. In contrast to gas which you can store in a bucket, electricity is use it or loose it. According to a Lawrence Livermore study we waste about 61% of our energy. As long it is cheaper to waste then to store we will waste. Solution: build cheap electron buckets. Elon said it was stupid to start a car company these days, only he didn't tell you he wasn't actually starting a car company. This year 20k cars degraded to 70% means he produces 1.2 GWh of electrical storages. Twice as much next year and multiply this by years and you know where we are headed - massive electrical buckets.

Tâm | September 12, 2013

When these laws are not made by consumer advocates, you need to wonder their validity.

One of the best kept trade secrets in the USA is, if you have extra money, and you want to install lots of solar panels to sell the surplus electricity back to utility company for a handsome profit then forget it!

Utility would audit your home and make sure you are NOT installing a solar farm for profit!

According to

Électricité de France pays homeowners for home-produced energy at a higher price than what is charged as consumers.

Germany homeowners sell their solar electricity from a separate meter that was several times the retail rate (now not as high but you can still make a profit off your solar.)

These US laws are an attack to home grown solar energy producers.

We are beneficial to the environment as well as also to Corporation's bottom line.

So don't treat us like leeches for their power grid!

If they don't want to pay $6.85 billion for a Southern Co. nuclear power plant

, then they need us to shift the initial capital cost to us.

It's a known technical reason that they cannot shut down their generators each night and all extra energy is wasted and they are calling us leeches?

Fair is fair. Even French and Germany utility companies make money by catering home solar. It is time that the US of A needs to catch up with Germany and stop scapegoating home solar panels.

Focus at the goal of green energy, not these ripoff laws!!!!

BVS Consult | September 13, 2013

One way to hedge this risk is to size your solar system to 80-90% of your actual usage. You then stay in the lowest "base" rate for PG&E (d/k about other utilities). You're going to pay network and distribution charges anyway and the generation rate is very low almost everywhere in the US. Said another way, targeting a $30-$40 monthly electricity bill gives you the best risk-managed return.

You have to do some pretty careful math to figure out your total usage, though, since it's dependent on how much you use your MS, etc...

Germany and France federally subsidize those higher rates paid to consumers for green energy, btw.

TikiMan | September 13, 2013


The bill (AB 327), in a nutshell, is going to ding you, if you conseve energy, and give you a break if you waste energy! That part is fairly evident. Thus, the complete oppisite of what is currently the rule now, would happen.

In other words... If you are currently at a Tier 1 rate (regardless if you produce power via solar, wind, etc or not), paying a lower per kWh fee because you have been responsable, you would no longer get a break for your conservation efforts, and would actually pay a higher rate than say someone who is currently at a Tier 5 rate.
Thus, consumers who have been of the mentality that buying LED lights, newer energy efficient appliances, and setting their thermostates at 78 during the summer months, would pay a HIGHER $$$ per kWh rate, than someone who still has old incondecent lights burning 24/7, old appliances, and sets their A/C at 68 degrees during the summer months.

The bill literally prases those who waste, and screws those who conserve! (about as backware thinking as you can get, during a time when our resources are literally depleteing at an astrominical rate, while our population and infrastructure grows even faster.

The bill is so completely ruthless and reckless in its mentality, it boggles the mind that anyone could remotely consider Gov Brown a liberal, enviromentalist, much less a Democrat, if he passes it. | September 13, 2013


That is what we did with SolarCity--we sized out PV to cove everything over Tier 1 usage. I am not sure what other companies do, but SC will look at your last 24 months of usage and then model a system based on that.


Based on the SFgate news story above, they addressed you concern so those who use more pay more.


BVS Consult | September 13, 2013

I completely agree the "indexing" aspect of the bill seems nuts.
We've had our MS since March and it consumes about 40% of our gross KwH. So simply by driving more or less we could put ourselves into either camp! We already do a little of this - towards the end of the billing period if we've had lots of fog (and thus reduced generation) we'll put more miles on the ICE cars to keep us in the lower tier. Then when the billing month rolls over we go back to normal.

I would still argue that if you size your solar to something that keeps you in the middle of the Tier 1 KwH "block" your risk is fairly low, simply because any under over would be at <$.10/KwH.

@omarsultan: how did SC estimate your MS consumption? Planned miles driven? Or did you already have the car? | September 13, 2013

@BVS We got the SC install pre-Tesla. Apparently I can get the system upgraded to cover the Tesla and I will eventually explore that, but for now, I am getting charging at a ToU rate of $0.06/kWh (dedicated EVSE meter). With the HPWC, getting a full charge on my S85 in the ToU window is not a problem, so its not an urgent priority for me right now.


SUN 2 DRV | September 13, 2013

Tiki, I'm not following how this new bill penalizes those who conserve over the high consumers, other than potentially adding a fixed charge to everyone's bill. The varying rates by climate zone have been in place a long time.

Can you clarify what part you think if unfair? Thanks...

bonaire | September 13, 2013

Solar peak is 10am to 2pm.

Demand peak is 6pm to 9pm.

Do you see the problem with why solar needs to be managed better than simply Net billed? They should pay the wholesale rate during mid day periods which are a daily, sliding scale bases on demand. Higher demand, higher wholesale hourly rate. Net metering via smart meters could or perhaps should eventually treat every generator roughly the same. Seems fair long term.

mdemetri | September 13, 2013


TOU peak for SCE is 10am-6pm, the same peak time for solar. I think you are quoting the peak time for PG&E. The difference is likely due to much higher AC use in SoCal and maybe more ??industry??

I agree with you about the wholesale prices.

TikiMan | September 13, 2013


"...With the State Legislature’s bill AB 327 – which appears headed for passage and the signature of Gov. Jerry Brown – energy rates for those in hotter locales, who consume more power to run air conditioning, will be lowered to where they are more even with rates by the breezy seacoast, where the need for fans and air conditioners is less..."
Why should those of us who paid FAR more for our tiny homes near the coast (and conserve power), subsidize those who paid pennies on the dollar for their inland palaces (many of which have masive swimming-pools, two to three central A/C units running 24/7, lighted tennis courts, etc)? They pay more on electrical power, because they saved hundreds of thousands on their desert masions!

The 'Tier Rate' system works, because it balances out those who choose to waste, over those who choose to conserve. | September 13, 2013


I am surprised they make brushes that big--have you ever visited the Central Valley? If you pick a town like Modesto, the median house is 1,800 sq ft, median household income is ~$42K and the average high is July is 95F.


RanjitC | September 13, 2013

The model S comes with a timer for charging. Most people charge their cars off peak as they are at work by day:). This helps the power companies as their solar panels are generating peak power and they are using super off peak power helping keep the voltage down.PG&E is doing the right thing by reimbursing you at peak rates.
@mdemetri if I am not mistaken peak for SCE is 12-6pm on tou

mdemetri | September 13, 2013


The peak time for the TOU-D-TEV (house + car) plan is 10am-6pm. This is my plan.

The peak time for the TOU-EV-1 (dedicated meter for car) plan is 12pm-9pm.

Not sure why they are different.

SUN 2 DRV | September 17, 2013


I totally love your Model S posts. And your Carbon Fiber nose cone treatment is very creative and an inspiration.

But I think AB-327 is a good outline for the future direction of NetMetering in California, although the devil will be in the details as the PUC drafts the actual new rates and NEM plans. So let's just say that we apparently have totally different perspectives on the net metering policies and leave it at that.

GeekEV | September 17, 2013

The discussion here seems WAY off kilter with what is actually being proposed. Has anyone RTFA? A flat $10/mo fee for ALL customers (not just solar) certainly sucks, but it's not unfairly targeting solar owners or anything like that. And if you DO have solar, what you save from your system should more than offset the new fee. If I were actually a net-producer with my solar (but I'm not), it only seems fair to pay some fee for the benefit of using the grid as if it were a giant "battery storage system". If you really don't like it, install your own battery backup system and go completely off-grid. Good luck!

mdemetri | September 17, 2013


Will other energy suppliers to the grid also be paying a fee to supply the grid with electrons? Seems non-sensical to me.

However, the more important point is that residential solar generators are already paying 'some fee for the benefit of using the grid as if it were a giant "battery storage system"; at least in Southern California. We are providing excess electricity during peak time to the benefit of the energy companies; this is a huge financial benefit to SCE as it provides them with cheap electrons during peak time/cost. Otherwise they would have to buy them on the wholesale market, where costs are high during peak time (especially with the San Onofre Nuclear plant off-line due to their own incompetence). They then give me the electrons back at off peak times when the cost to them is the lowest. This difference in cost accrues to SCE and therefore is already a major subsidy that residential solar generators provide for use of the grid. Note that this benefits SCE even if the residential solar owner is not net positive as most generate more electrons during peak time than they use in that time period.

I don't need net metering; just pay me market wholesale rates during the day when I am supplying the grid and charge me retail rates when I use electrons at off-peak times.

SUN 2 DRV | September 18, 2013


Currently you get full retail credit for the power you push back in to the grid. You can't get a better deal than that, it's hugely in your favor.

I'm not clear whether you're on a ToU rate or not, but in most parts of California that's certainly an option. In that case you get paid the much HIGHER on peak rate when you generate and pay the much lower off peak rate for what you use in the evening. Again a major win for the solar customer.

And you get that higher on peak ToU rate credit for all of the excess energy you create during the whole year (modulo summer/winter variance) whereas the utility only needs to go out for the really expensive power on the 6 or so Critical Peak Pricing days each year.

Trust me that you're already getting a great deal as a subsidized incentive to install solar. This new bill is an attempt to set guidelines and priorities to update the Net Energy Metering program so that it can rationally be extended to many more customers as solar becomes even more cost effective and main stream.

Frankly the old program was a VERY generous way to help the adoption of solar but it just wasn't scalable. Imagine a world where EVERY customer was as smart as you and installed solar sufficient to drive their costs to zero. Who do you think should pay to keep your lights on at night?

bt77057 | September 18, 2013

There are sooooo many misinterpretations of the facts here. This is an important issue.

There are quite a few of you that should recheck your statements and assuming them factual. Opinions are also not facts.

Important distinctions:
- credit = the actual electricity generated that is more than your consumption, based on the rate when it is generated
- payment = amount SCE pays for overproduction after reconciled for the year. This is based on wholesale prices, currently $0.035 / KWH, that's 3.5 cents.


One of the contentions of this bill is that the PUC may determine the rate when generating credits. If the credits are calculated based on WHOLESLE PRICES of 3.5 cents per KWH, this will END the ROI as we know it. Instead of 6.5 years for my system to pay for itself, it will take over 20 years. This has the potential to kill the financial benefits of rooftop solar and flip the industry on its lid.

That is a huge problem

Be careful when using the terms "pay" and "credit" as these are not interchangeable when discussing net metering and solar.

Happy arguing everyone

mdemetri | September 18, 2013

bt77057 +1

It is critical to understand that the wholesale rate that SCE 'pays' for excess annual electricity is the lowest off peak rate, not the highest rate during peak time when solar is generating. They are pocketing the difference and in this way, we are already substantially subsidizing the grid.

IMO, net metering and excess electricity should be 'payed' at the wholesale rate based on time of day. Currently, TOU is completely ignored at the time of annual reconciliation and excess is payed at the lowest possible wholesale rate.

bt77057 | September 18, 2013

Mdemetri, I'm not sure that annual payouts are paid with any regard to off peak rates, they are simply paid at wholesale rates. This is my understanding, I could be wrong, but are you absolutely sure about your statement?

zwjohnston7 | September 18, 2013

I realize many of you think this is awful, but you have to think from the point of view of the utility. You are still getting a pretty nice deal with net metering. If your solar is matched well, say exactly what your load is, you effectively have no bill and the utility is paying you full retail price for what you produced to offsett your bill to 0. You used 300kwh at .15/kwh, but you produced 300kwh and your bill is offsett at .15/kwh = 0 owed for example. Now if you have oversized your solar you should obviously be actually payed income for that so now you are basically your own tiny utility company. BUT, you own no transmission assets how do you sell it, and who do you sell it to? you don't employ any energy marketers either... Well right now you are using the utility's resources for that. And they basically take that into account somewhat when deciding how much to pay you for your power. You are selling it to them, but they are taking out their cost portions of it first. Which is perfectly fair. Therefore you get paid only 3.5 cents/kwh for your excess. The other thing the utility does for you is to make sure the capacity is still there to serve you if you solar goes out. That is wasted capacity of the utility's resources they can't use to sell power, and that costs money too.

Could this system be better, sure. You could be a real time part of the energy market in which high peak times you could sell for more $/kwh and such, but they equipment, manpower does not exist to do this. The way they are doing it now is much simpler and cheaper to implement across the system. The grid would need a lot of additional equipment, communications equipment, and more manpower to maintain and run it all in order to get a real-time pricing model to work for each individual residential customer. Maybe someday, who knows, but right now that is one heck of a lot of cost to implement, and isn't benificial enough to do so.

Hopefully this helps you to understand where the utility is coming from. You may not like it, but it really is pretty fair to you.

SUN 2 DRV | September 18, 2013


Yes, one does need to be careful and understand the details. There are actually three timescales to consider for Net Metering:

- Realtime Net kWh (Often aggregated to a 15 minute reporting interval)
- Monthly Net $
- Yearly Net kWh

In the US, and certainly in California, it is typical to have a single electric meter that measures your realtime net energy consumption. So in this way your solar production immediately and inherently offsets an equivalent amount of your concurrent consumption. So in this setup your electric meter is recording your NET energy usage, and you are effectively getting full retail credit for any and all production that offsets concurrent consumption.

Not all parts of the world have such generous net metering programs. Some localities use a separate meter to measure your solar production completely separately from your consumption meter. In these cases you get paid a wholesale rate for all of your generation but you pay the retail rate for ALL of your consumption. None of the consumption is offset at retail rates by your concurrent solar production.

So in the US using a single net meter ensures your solar production offsets any realtime concurrent consumption, and thus you're effectively credited (aka not billed) at the FULL RETAIL rate for that production. So the California NEM program is a big win in the realtime case. (mdemetri: Be careful about your wish to get credited at wholesale for your production but pay retail for your consumption, because that may not be what you really had in mind)

Secondly your monthly bill is tallied up on a DOLLAR basis, using retail rates for both consumption and production, and credits/charges are carried forward for the yearly true up period. You're getting credit at the full retail rate for excess energy you generate. Why?

Who would ever expect to take an item into a store that wasn't purchased there and assume they'd get a store credit for the full retail value of that item, and especially who would think that they should get that unbelievablely good deal for an unlimited number of returned items?

Macys, My brother Vinney can make sweaters just like the one I see on your rack there. I plan to drop his sweaters off whenever it's convenient for me (summer and winter) and I expect Macys to keep track of the sweaters year round and once a year pay me the full retail value for all of Vinney's sweaters. Huh???

But wouldn't you be amazed and pleasantly surprised if Macy's said, well since you're such a good customer we'll buy Vinney's sweaters from you at full retail price but only up to the amount of your normal yearly purchases from Macy's. But we'll give you a nominal amount even for the extra sweaters you've dropped off. Please plan accordingly and try not to drop off any more sweaters than it will take to offset your normal yearly bill. Can you think of ANY merchant who would even entertain such a sweet deal for the consumer?

Well that's exactly what Net Metering is asking of the utilities.

Getting full retail credit for ANY of your realtime net production is a huge gift. Logically you should be getting paid the wholesale rate for the energy (for similarly characterized intermittent, non-dispatchable energy). And instead of getting a credit for the distribution charge included in the retail rate you should logically be charged a FEE for use of the transformer and distribution system that you need to take your excess energy to market. Commercial customers pay Demand charges for their peak power flows irrespective of their energy use. The concept applies here too.

In California, NEM DOES...

- give you FULL retail credit for ALL solar production that offsets concurrent consumption, an unlimited amount.

- give you FULL retail and full ToU! DOLLAR credit to offset the dollars you owe for any of your excess consumption. This is a strong advantage to solar because you accumulate credits at the higher OnPeak ToU rates to pay for consumption during off-peak periods. (mdemetri: You can even offset your full yearly bill by producing fewer kWh than you consume. You ARE getting the higher ToU dollar credit for the time value of the energy you produce.)

- pay you a nominal (low) rate for excess energy you generate beyond what it takes to offset your yearly bill.

Finally, here's what VoteSolar (a solar advocacy group) has to say about AB-327:

"AB 327 (Perea) is a net metering and rate reform bill that clears the way for hundreds of thousands of homes, schools and businesses to go solar and lower their electricity bills. AB 327 ensures that one of California’s most important solar consumer rights, net metering, will stay in place until at least 2016 instead of being suspended as soon as next year. It also gives the California Public Utilities Commission authority to remove caps on participation in the program altogether for the first time in California history, charting the way forward toward long-term solar industry sustainability. All in all it’s a big win for solar; however, the bill does leave a few big unanswered questions that will need to be addressed by the Commission."