Solar Customers are Subsidizing Electricity in CA
- pastoretony
- Mar 27, 2018
- 3 min read
Updated: Mar 28, 2018
Solar brings numerous "values" to the utility customer and to the utility grid.
Solar is the fastest and most immediate way to reduce green house gas emissions and to control energy costs... anywhere.
Solar is under attack from the utilities in California. The vary foundation of Net Energy Metering is threatened
Why are the utilities attempting to levy per kWh charges masked as NBCs ("Non-bypassable charges") on solar customers?!
I understand it may sound counterintuitive at first. However, there are two exhaustive studies on the issue (both cited below): one prepared by the California Public Utilities Commission (CPUC), and another prepared by Crossborder Energy for VoteSolar. Both clearly demonstrate that solar customers are already subsidizing non-solar customers. So why do the utilities propose charging solar customers additional fees known as "non-bypassable charges"? . . . As if these charges are somehow sacrosanct and "non-bypassable"?
On an already uneven playing field, solar "pencils". This is evidenced by the mass proliferation of systems across the state, the billions of dollars injected into our economy, thousands of jobs, etc etc. Another result of this solar revolution is that revenue is dropping for the utilities. "Customers" are becoming "Customer-Generators". The utility business model is changing underneath their feet.
How the utilities, the CPUC, and the various industries and citizens groups (all the stakeholders) effect new policy is paramount to a fair, and carbon friendly, future for us all. Deployment of solar energy systems is the fastest, cheapest, and most effective way to reduce carbon emissions while maintaining basic societal norms. In essence, we need solar to mitigate climate change. Solar is simultaneously fueling a massive economic engine... with far fewer emissions.
The utilities are proposing a radical change to the Net Energy Metering (NEM) rules (minted here in California) that have made solar successful across the United States. What are Non-Bypassable Charges (NBCs)? NBCs are a fee the utilities propose charging to solarcustomers for every kilowatt-hour (kWh) consumed from the grid. What? Net Energy Metering means, in essence, if you make a kWh and put it into the grid, you can take one kWh out. One for one. "Net" metering. This is the gold standard for solar policy nation wide. NBCs, under the utility proposal, will charge solar customers for every kWh consumed. At the end of the month, even if the "net" is excess solar generation, the solar customer will be billed for every kWh consumed. As far as I know, no one has completed analysis to verify the economics of this radical departure from net energy metering. If someone has, please let me know. This appears to be a slippery slope . . . and not a powdery ski run, nor a glassy wave to be surfed . . . but a greasy ramp into a pit of fire.
I'm wide open to being better informed myself and I welcome a dialogue and/or input.
Two extensive reports clearly demonstrate solar (Distributed Generation aka DG) customers are already subsidizing non-solar customers. Numerous tables in each report are invaluable. I suggest you read the reports to be better informed:
p. 5 of the Crossborder report states:
Our results show that the challenge in the C&I [commercial and industrial solar] market is to adopt rate designs that do not result in solar customers subsidizing other ratepayers. Such cross-subsidies will slow progress toward reaching solar program goals or will require incentives such as tax credits or CSI direct incentives to remain in effect for longer. Policymakers should continue to support rate designs for solar customers that reduce demand charges, such as PG&E’s A-6 rate with zero demand charges or the SCE Option R rates and SDG&E’s DG-R tariff that feature reduced demand charges. Such innovations are important means to ensure that such cross-subsidies do not occur, and that non-participating ratepayers are indifferent to NEM in the C&I market.
Page 10 of the E3 report states:
After the installation of NEM generation, the aggregate gap between bills and the full cost of service shrinks dramatically. Whereas total annual bills were $175 million in excess of the full cost of service before DG, the difference is only $23 million after DG. The relative changes to bills and full cost of service, however, are not uniform across all utilities and customer sectors. Table 5 shows that, with renewable DG, NEM residential customers pay 88% of their full cost of service compared to 154% before DG, and non-residential NEM customers pay 113%, compared to 122% before DG. Overall, based on limited information for a single year, the NEM accounts appear to be paying slightly more than their full cost of service.
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