Electricity and how it is produced depends on a number of rapidly changing sources: water behind dams, workers in China, the sun and clouds, and now the Public Utilities Commission's (CPUC) new billing rules for solar rooftops. last week. Although the measure was intended to help California meet its goal of reducing greenhouse gas emissions from fossil fuel energy sources, the decision was criticized from all sides, with the solar industry arguing that fewer incentives would mean more few families choose expensive solar panels. Consumer groups say existing subsidies for solar rooftops are still unfair.
Judge Kelly Himes, who wrote the lengthy CPUC decision, believes solar costs are falling. In fact, he estimates, prices are falling so fast that five years will be enough for the solar industry and customers who need fewer subsidies. The details are as complex as buying electricity in the futures market, but here they apply to new residential solar installations after April 2023. The cost of existing residential solar will not change, Judge Himes wrote.
A fact sheet compiled by the CPUC says the new net billing rates will save up to $100 in average monthly electricity and up to $136 when batteries are installed. To estimate what consumers will receive for each kilowatt-hour of power exported, the CPUC uses something called the "Avoided Cost Calculator" (ACC), which is based on grid or wholesale electricity prices, which vary by time of day and time of day. . the season. But even Himes admits that ACC could be a surprise for the solar industry, with so much money coming in over the next five years. It is assumed that this amount will pay off the facility after nine years. (The non-residential solar rates were set by the ACC only because the CPUC said the rates would be paid off in nine years or less.)
This is a significant change from the previous clean energy metering plan, known as NEM 2.0, which paid 90 percent of the retail price of exported electricity. Ron Gales of SoCal Edison explains that retail prices include costs that are not included in wholesale prices, such as power lines and employee wages or company overhead. For utilities, this is important because they cannot fully cover the costs of maintaining and increasing line kilometers. As the sun goes down, energy imported or sold to customers is sold at full retail price.
Steven Honickman works in the solar industry and grew up in a solar-powered home in Galeta. It will also apply for permission to install panels on its own roof to incorporate NEM 2.0 pricing, as it is doubtful that hard costs will continue to fall. He also believes the price of NEM 2.0 is better than the new tariffs the CPUC will implement in April.
"The biggest difference in avoided cost is that instead of paying the retail price for the energy you export, you get the price the utility charges you in the wholesale market," says Honickman. He further explained that companies pre-purchase the best prices in large bulk parcels and calculate their future needs. "The amounts to be paid are bulk fees or amounts that companies do not have to pay. This is no longer a loan at retail prices."
Another challenging part of the energy argument is whether the dollars solar owners save on energy exports will be repaid by those without rooftop solar. In his ruling, Judge Himes said NEM 2.0 was unfair, but also said greening energy networks would ultimately benefit society as a whole. To level the playing field a bit, more cents per kilowatt hour will be added to the Avoided Cost Calculator Plus or ACC Plus "aggregator" for households in the CARE and FERA payment assistance programs. Interestingly, ACC Plus and its "aggregator" are only for SoCal Edison and PG&E customers. San Diego Gas & Electric, California's third-largest electricity producer, already pays high rates for electricity exported by solar homeowners and doesn't need additional subsidies, Himes wrote.
Additionally, the California Legislature passed and Governor Newsom signed Assembly Bill 290 in September, which adds $900 million to the 2022-2023 budget for solar installations and batteries: 70 percent, or $630 million, for design-build customers. low income. create justice. The decisions review the new rules after three and five years to see if they provide fairness or affordability. In addition, ACC Plus is reduced by 20 percent each year for a total of five years.
If you do the math, a $100 or $136 discount off your monthly electric bill could cover the cost of solar and batteries — about $15,000 and $10,000, respectively — when you add in federal incentives. The Biden administration's Inflation Reduction Act (IRA) extended through 2032 the 30 percent tax break for homeowners for solar installations. Under the IRA, nonprofits and municipalities can convert tax credits to cash, although the details have not been released by the IRS.
Honickman notes that for those living inland, the credit likely won't cover summer's large electricity needs for air conditioning and heating the rest of the year. Licensing and location issues can also significantly change the cost and production of electricity.
Senator Monique Lemon is also concerned about the big picture. “Given that California needs more clean energy sources, and soon, I wonder if the right balance is being struck. "Rooftop solar panels must remain part of our climate goals," he said. “Last year, the California Energy Commission predicted that by 2025 we would have a deficit of 1,800 megawatts. power projects start online and extend the life of other power plants. made great strides in its expansion".
Last summer's extreme heat underscored California's dependence on electricity, and the new rules emphasize incentives for battery storage. When the wholesale price of electricity rose to $2,000 per megawatt-hour in September, Independent System Operator asked Californians to keep their thermostats at 78 degrees. Electricity consumption regularly increases between 16:00 and 21:00 when the solar panels stop working. For comparison, note that on a crisp winter morning, wholesale prices this week hover between $200-$300.
The city of Santa Barbara was one of the first cities to adopt municipal solar panels and create its own electricity purchase system, led by Director of Sustainability and Sustainability Alelia Parenta. Last night, he agreed batteries were essential to close the gap. "There is a need to find a balance between the promotion of renewable energy sources and the equitable distribution of the costs of the electricity distribution system," said Parenteau. “A lot of care goes into deciding whether to combine solar and battery, so even if batteries are installed, they're still affordable. We agree that this is a big step".
"We're used to a 24/7 network," says Stephen Honickman. "This is a great system that is a socialized investment." "We all need our power at night," he said as the sun set on California's solar panels.
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