Ice-free Northwest Passage

Here's an image that depresses me. (Source: http://nsidc.org/arcticseaicenews/ )

As the Arctic warms, less ice remains throughout the summer. This year, it appears that the Northwest Passage may be completely ice free by mid-September. The fewer months of ice cover, the more solar energy the Arctic Ocean will absorb and the more likely it is that subsequent summers will be even more ice-free. This is just one of the positive (amplifying) feedback loops that makes climate change a serious threat to ecosystems in many parts of the world.

8 Cents/kWh for Extra Production

PG&E filed a document with the CPUC today that suggests it feels 8 cents/kWh is a fair price for "overproduction" by solar system owners. The final determination of the price utilities will pay will be made by the CPUC within the next 2-3 months.

Overproduction occurs when, over the course of a year, the solar system produces more kilowatt hours (kWh) than the home uses. This is not the same as simply driving the electricity bill below zero. For example, we are on a Time of Use rate plan and our bill is zero even though our PV system only produces about 70% as many kWh as we use. We produce a lot of high-value "on peak" kWh and use a lot of low-value "off-peak" kWh.

Up until now, PV system owners have received no compensation for overproduction. The energy, and its value, have been donated to the utility. (This is true in all utilities in CA that I am aware of, not just PG&E territory.)

The bill that caused this policy change is AB 920 "The California Solar Surplus Act" from the 2009 Legislative session. Thanks to Jared Huffman for introducing AB 920!

Solar is HOT in California

The residential and commercial solar markets are smoking hot in California this Spring. As you may know, State incentives decline whenever sales of solar PV systems reach certain trigger points. There are separate incentive programs for residential and non-residential systems purchased in each of the state's 3 investor-owned utility territories: PG&E, SDG&E and SCE.

Between March 26 and April 26 all six of these programs reached the end of an incentive step and lowered their rebates. This was caused by a huge surge of demand, most of which occurred the six weeks after Valentine's Day. The solar market usually pauses to catch its breath after rebate drops, but it also traditionally has its strongest selling season from June to August. I predict that the strength we've seen recently will continue and that at least 4 of the 6 programs will record another rebate drop by the end of 2010.

You can keep track of California rebate levels and reservation levels here: http://www.csi-trigger.com/

PG&E's Rate Reduction Request

In March, 2010, PG&E filed its General Rate Case with the California Public Utility Commission (CPUC). In it, it asked for significant reductions in its top residential rates on June 1. PG&E requested permission to merge Tiers 3, 4 and 5 into a single tier and charge $.298/kWh. The graph shows 4 years of history, including the proposed reduction (which the CPUC has not yet ruled on.

Update

The CPUC allowed PG&E to merge Tiers 4 and 5 and price them both at $.40/kWh. Tier 3 is priced at $.29/kWh.

There are many ways to look at this proposal, and I take a relatively optimistic view of the effect it would have on the solar industry if it were adopted. It's certainly true that the proposed rates would take a lot of financial pressure off homeowners with very large electric bills. The amount they could save by adding a PV system would fall dramatically. But, in my experience, it's not actually people with a $800/month electric bill who are driving the residential solar market. It's people with bills in the $200-$350 range, and the proposed rates would create a lot more ratepayers like this.

If you look back at 2001 when the 5 tier scheme was first adopted, the ratio between the highest priced kWh and the lowest was 3:1. Today it is 4.5:1. Under PG&E's proposal it would go 2.6:1. This is still a steeply tiered rate structure. I can't easily imagine people wasting electricity because it costs only $.30/kWh instead of $.50.

My top reason for feeling OK about the proposal is that the proposed rates are very similar to what is charged by San Diego Gas and Electric, and that part of the state has adopted solar at an even faster rate than PG&E customers over the last year.

The CPUC will probably rule on PG&E's request in very late May. When they do, I'll update this posting.

"Solar for All" is no more

In April 2009 I contacted my local Assemblyman, Paul Fong, and asked him to make it possible for renters, condo owners, and others to lease solar panels located on solar farms and offset all or part of their electric usage via remote net metering. Essentially, this would give every residential electric customer in the state the same access to leased solar that homeowners have enjoyed for the last 2 years.

In February, 2010 Mr. Fong introduced my bill (AB 1947). I had high hopes for the bill, but it was completely gutted and amended to serve an entirely different purpose. It is now a bill that will benefit only a few rate payers in the Sacramento Municipal Utility District area.

Thanks to everyone who supported Solar for All in its original form. It may be possible to reintroduce it in 2011 with a better outcome.

Cheers,
Bruce

PG&E Asks for 8.6% Rate Increase in 2011

My January PG&E Bill included an insert summarizing rate increases requested in the company's "2011 General Rate Case Application Filing A.09-12.020"

These inserts often go straight to the recycling bin unread, but I took the time to scan this one. PG&E is proposing an 8.6% rate increase on Jan. 1, 2011 for residential service. The increase will be smaller for low-usage customers and larger high-usage customers. As they put it:

"A typical ... residential customer using 550 kWh per month would increase $2.37 or 3.2%, from $74.13 to $76.50. The bill for a typical residential customer using 850 kWh per month would increase by $17.44, or 10.6%, from $164.15 to $181.59"

Proposed increases for commercial customers range from 5.8-7.6%.

Time to go solar!

Pacific Gas and Electric's Jan. 1 Rate Increase

PG&E raised its residential electric rates again on Jan. 1, 2010 by 3% for the most frugal users and 7% for heavy consumers. This was the 6th rate increase in the last 3 years. There have also been 4 rate decreases, but the increases tend to be large and the decreases are usually quite small.

Because rate increases have been tilted toward the ratepayers who use the most electricity, the compound average annual growth in rates over the last 3 years depends greatly on which of the 5 "tiers" you are in. Here are the average annual price increases by Tier from Jan. 1, 2007 to Jan. 1, 2010:

Tier 1 1.4%
Tier 2 1.3%
Tier 3 6.4%
Tier 4 8.1%
Tier 5 8.6%

Tier 5 energy now costs $.474 per kilowatt hour, significantly higher than the UNSUBSIDIZED cost of residential solar energy about double the cost after taking tax credits and the state rebate into account