Excess solar generation worth only 4 cents/kwh?

After nearly 2 years of regulatory studies and hearings the Public Utility Commission ruled yesterday that solar system owners who produce more kWh than they consume will be paid about 4 cents/kWh for their "excess generation." Full details are in this article by SFGate writer David Baker.

This is a very disappointing result.

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!