Regulators won’t let utilities slash payments to
solar-equipped customers. But there are changes coming for rooftop systems.
California regulators have proposed a future net metering
regime that will preserve retail payments for residential rooftop PV.
However, the proposal would add new interconnection costs
and non-bypassable charges to distributed solar systems, while also imposing
new minimum bill requirements and time-of-use rates that could complicate the
solar value proposition.
Tuesday’s proposed decision from the California Public Utilities
Commission comes after years of debate and uncertainty over the state’s
solar future. A 2013 state law, AB 327, ordered the CPUC to create a successor
program to the existing net-metering program, which is close to expiring as the
state’s big investor-owned utilities approach their 5 percent caps.
AB 327 also required the CPUC to come up with new ways to
value the costs and benefits of net-metered solar. That includes figuring out
the costs of maintaining the grid when so many distributed solar systems are
connected.
The biggest dispute has been over what rate to pay
net-metered customers. Today, they’re paid at retail rates. Many solar
advocates think it's a simple and fair form of compensation that shouldn't be
changed.
But utilities Pacific Gas & Electric, Southern
California Edison and San Diego Gas & Electric asked
the CPUC for big cuts, with proposals ranging from roughly half the going
retail rate, to as low as a few cents per kilowatt-hour.
Tuesday’s proposed decision, however, specifically declines
to “impose any demand charges, grid access charges, installed capacity fees,
standby fees, or similar fixed charges on NEM residential customers,” while the
commission continues to evaluate the need for them. That’s a big victory for
the solar industry, which has fought
hard for keeping the retail rate.
Utilities reacted negatively to the CPUC proposal, which is
open for public comments until Jan. 7, and could be voted on by the full
commission as early as Jan. 28.
In a prepared statement, SDG&E said the decision
"fails to recognize what consumer advocates and the utilities have already
confirmed: we need to continue to support the growth of solar energy AND new
rooftop solar rules that don’t require non-solar customers to pay over $160
million additional per year."
PG&E's noted that existing incentives for rooftop solar
will increase bills for non-solar customers by $45 monthly by 2025, if left in
place. "Under these dated rules, rooftop solar users can effectively pay
nothing for their use of the grid to both buy and sell electricity," the
utility stated.
But solar industry groups applauded the decision. “Governor
Brown’s PUC is standing up for clean power and for customers by proposing to
reject the utilities’ attempts to make solar out of reach for customers,” said
Bernadette Del Chiaro, executive director of state solar industry association
CalSEIA, in a Tuesday statement.
On the down side for solar, the CPUC is proposing some new
charges for net-metered customers -- and asking them to pay the same charges
other customers pay:
● One-time interconnection fee (likely
to be approximately $75-$150). This fee, which represents the costs for a
utility to review and ensure that a NEM system interconnects safely to the
grid, has historically been borne by all utility customers, including non-NEM
customers. The proposed decision finds that these interconnection costs can be
paid by NEM successor customers themselves without jeopardizing the economics
of the NEM installation.
● Non-bypassable charges that all
utility customers pay. Non-bypassable charges are used to fund
low-income and efficiency programs. They are the equivalent of approximately
2-3 cents per kilowatt-hour of energy consumed. Historically, NEM customers
have only paid for non-bypassable charges if, over the course of a year, they
consumed more electricity from the grid than their installation produced. The
proposed decision finds that NEM successor customers should pay for
non-bypassable charges on all energy they consume from the grid, regardless of
the amount of energy they have exported to the grid.
Solar industry groups such as the Solar Energy Industries
Association, CalSEIA and The Alliance for Solar Choice have argued against
these charges. But the CPUC determined that they’re reasonable steps to ensure
fair cost-sharing between net-metered customers and everyone else.
“The PD [proposed decision] represents a balancing of the
requirements to ensure sustainable growth with ensuring that customers pay
their appropriate share of costs,” said Shannon O’Rourke, a lead analyst at
CPUC’s customer generation program, in a Tuesday interview.
In practical terms, $150 is a small -- but not insignificant
-- increase to installation costs. Subtracting 2 to 3 cents from each
kilowatt-hour of net-metered solar will have a direct impact on payback for
rooftop PV owners and aggregators.
That could encourage new net-metered systems to focus more
on maximizing the amount of power they self-generate, rather than on exporting
grid energy, since “you don’t pay non-bypassable charges for anything you
self-provide,” said O’Rourke.
Minimum monthly bills, which are part of the residential
rate reform packagethe CPUC passed earlier this year, will also hurt the
bottom line for net-metered solar, since they represent costs that can’t be
spun backwards.
The biggest unknown, however, comes with the stipulation
that all new net-metered customers will be signed up for time-of-use (TOU)
rates starting in 2018. In the past, TOU rates have focused on charging more
for power during hot summer weekday afternoons.
But the rise of solar power is causing disruptions in these
predictable peaks and troughs, which will require flexibility for the state’s
new TOU rates. That, in turn, could be a potential upside for solar systems
that are linked to batteries, smart thermostats, or other behind-the-meter
resources that can manage demand as well as supply, O’Rourke said.
In other highlights, big solar systems also get a chance at
net metering, with eligibility extended to projects bigger than 1 megawatt, as
long as they can pay the commensurate interconnection and upgrade fees. And the
CPUC plans to develop an alternative tariff to support disadvantaged
communities and low-income customers, including a neighborhood “virtual” net
metering program.
Finally, the CPUC has proposed revisiting its policies in
2019, with an eye on incorporating data on two big distributed energy
proceedings it has underway -- its distribution
resources plan and integrated
distributed energy resources proceedings.
“What the PD really acknowledges is, we have a good idea of
what the costs are, but we don’t have a good idea of all the benefits it could
provide,” O’Rourke said.
Those two proceedings will help fill in that blank, which
could allow for significant changes later this decade.
No comments:
Post a Comment