Solar tax credit extended; What’s next for PG&E net-metering?

This is a bit of a paste-eating (read: boring to most all but we the solar geeks) blog post, but we feel it’s valuable to share a few important updates for property owners who are considering going solar.

Federal Investment Tax Credit (ITC)

In late December, as part of the $900B Covid-19 relief package, the 26% Federal Investment Tax Credit for solar systems was extended through 2022. (It was slated to drop to 22% this year.) Even through the lens of a rah-rah solar practitioner, it’s difficult to see the relationship of our industry to the pandemic … but, we’ll take it (and, it’s a benefit that accrues to homeowners who invest in solar). Good news.

PG&E Net-Energy Metering

In August 2020, the California Public Utilities Commission (CPUC) commenced deliberations for Net-Metering 3.0. (Background: “Net-Metering” is the accounting mechanism by which PG&E, as mandated by the CPUC, is required to compensate property owners for their solar generation. From 2005 through late 2016 [Net-Metering 1.0], property owners were compensated at the full retail rate [the same price PG&E charges for electricity] for their excess solar generation. Under the current program, Net-Metering 2.0, solar owners receive full retail compensation with two changes: a nominal “non-bypassable” charge, essentially a tax or toll, that totals ~$100/year; and, a requirement to enroll in a time-of-use rate plan.)

We were recently briefed by sages at the California Solar + Storage Association regarding the timing and key, to-be-negotiated levers of what’s next (Net-Metering 3.0). Important tenets:

- It’s anticipated the sausage-making process (CPUC deliberations) will continue through 2021, with a formulated program finalized in early 2022. Thereafter, it will take three-to-six months to initiate the program. Any prospective solar owner who has submitted Phase 1 of their PG&E Net-Metering application (by that date) will be grandfathered in to the current (Net-Metering 2.0) rules. Good news.

- Reprise: Anyone who has gone solar or goes solar prior to commencement of the new program is safe (i.e., you’re enrolled in Net-Metering 1.0 or 2.0); PG&E cannot retroactively change the rules or accounting treatment.

- It is likely solar-tied storage (batteries) will be part of the new program … again, details TBD. Could be good, could be penal.

- There are three key imperatives, or consumer protections, our industry is keenly focused on: Do not touch behind-the-meter (solar generation less consumption) electricity; no solar-specific fixed charges (ala SMUD and other utilities); and, any change/new program must be gradually implemented.

One note: There is no urgency, through our lens, to go solar. Unfortunately, several homeowners each week relay they were told (by one or more solar companies) that they had to go solar by (insert a fictitious date) for (insert an erroneous reason). Don’t buy it; take your time, do your due diligence.

As always, feel free to contact us if you’d like to learn more about the above and/or if you’d like us to help you evaluate whether solar makes sense.

The power is out. I want a battery. (Or, do I?) 2021 thoughts on solar-tied storage.

[Photo courtesy of the great Owen Yancher @davisenterprise.com]

This is a bit of a reprise from last year, wherein we shared thoughts about the pros and cons of purchasing a solar-tied battery. Then and now, our position is constant: We do not believe it makes economic sense. But, we do do it (install batteries).

Since the two-week-ago storm, we’ve fielded several dozen calls from local homeowners, all seeking the peace-of-mind of reliable electricity. Completely understood: My wife and I lost our power, in Willowbank, for about 36 hours, and my partner’s power was out for five days. No bueno.

It was an extraordinary storm, and our collective response, rightfully so, was extraordinary.

Pragmatically, we continue to dissuade homeowners from investing in batteries: They’re expensive (about $13,000, pre-tax credit, for a 10 kW battery that will power a handful of low voltage circuits during an outage) and the net-metering arbitrage is insulting ($50-100/year in benefit).

But, if energy security and resiliency is important, batteries are worthy of consideration. They work, they’re proven, and they are getting better. Here’s an email we received from a Repower client (for whom we installed an LG solar and battery system, in concert with SolarEdge’s kick ass Energy Hub inverter and power optimizers):

I thought I'd write you a brief note about our system. As you all are probably aware, there have been a few outages in Yolo county the past 2-3 days and we were not spared in it. Our power went out at 4pm on 1/28 and restarted at 9pm that night. Our batteries kicked in 2 seconds after the outage started and continued until the outage was over. We were able to keep our internet access until about 7pm when ATT broadband went down, but we had cellular service. It was eerie in how dark and quiet our neighborhood was, yet our place was lit up like a cheap Las Vegas casino.

Since this was our first real outage and we were skeptical as to PGE's estimated restoration time, (in addition to standing out like a sore thumb amongst our neighbors), we turned off unnecessary lights and tried to conserve. By the time the grid was back up, we had 88% battery capacity left and everything worked as planned.

This morning I've been fielding a few inquiries from our neighbors who want to know more about our batteries! Our batteries are recharged back to 100% and things are humming along.

Thanks again for everything that you've done to make this possible.

We are very pleased with the outcome!

We cannot quantify nor arbiter the value of security. Of course, if given the choice, nary a homeowner would opt to live in the dark. But, if the trade off is investing $10-20k versus enduring a power outage (or, employing the analog: a generator), we believe it’s worthy of considering the pros and cons.

An anecdote: We’ve had several prospective Repower clients share that solar companies told them they would “throw in a battery” to their solar system purchase. Nothing is thrown in; homeowners pay for it. Don’t fall for the sales ploy.

As we opined in July 2020, solar + storage is the future: "Homeowners no longer take their electricity security for granted. They are increasingly anxious about maintaining normalcy as supply uncertainty increases.”

Storms are one thing. PG&E brownouts — when peak demand exceeds electricity supply — are another. Fortunately, residents in suburban Yolo County are fairly immune from PG&E’s shut downs: We are surrounded by a (wonderful) agricultural buffer, and more than 25% of homes in our community have solar PV systems, thus lessening our reliance on the grid. We are a resilient community, sans storms.

Then and now, we’re happy to help homeowners evaluate whether batteries (and solar, of course) make sense. We commit to maintaining our objectivity and will endeavor to be less pessimistic, opening our minds to the subjective rationale of adding storage to a solar system.

Please contact us if you’d like to learn more. Until then, our best to you and yours … we will get through this pandemic, stronger and more resilient on the other side.

Solar + Battery Storage: Are we there (yet)?

The future of clean energy generation, security and resiliency is the combination of solar and energy storage (batteries). Though the grid acts as a de-facto battery via net-metering – from an accounting perspective – when the grid goes down, so too do solar systems. 

Enter batteries. And, the ever-evolving question of, “Are solar-tied batteries ready for prime time?”

Today we look at solar + batteries through two lenses: Property owners and solar companies.

How homeowners view backup power

Here’s a recent conversation with a Yolo County homeowner that reflects the sentiment of many Repower current and prospective clients:

Losing power to my house makes me uneasy. As my home has become a second workspace, a new play area and the only restaurant in town always taking my reservation, a power interruption can stop my life entirely. Such a possibility raises my anxiety. And I’m not alone. Eliminating my absolute reliance on PG&E lowers my anxiety and is an increasingly large interest for a number of us (homeowners).

 While some view batteries as an insurance policy against loss, others simply want the security (and peace of mind) to live uninterrupted. Hence, homeowners can often be split into two groups: those willing to back-up a limited number of critical circuits (electrical loads) and those seeking uninterruptible power for everything they need. 

For the first group, the approach is straightforward and currently, the least expensive: identify the circuits critically needed, place those circuit breakers in a separate subpanel and power them with a battery. This approach works with any backup system and promises the battery does not drain too quickly. These batteries can support low power appliances, such as lights, the house fan, modems/routers and the fridge and freezer. The microwave may work, but it uses more power than the other items and drains the battery faster. For this first group, air conditioning is out of the question: too much power required.

The second group requires multiple batteries to reduce the likelihood of running out of energy or not providing enough power. Supplying all the energy needed may also require installing more solar panels (and/or a generator) to ensure that the battery system gets recharged fully in the depths of winter. Most homeowners find this is not a sage investment; we agree.

Many homeowners are considering generators as an alternative to batteries. On the surface, this approach makes a lot of sense. Like batteries, the generator needs to be sized for either a critical group of circuits or for the entire house. Unlike a battery solution, generators require maintenance and should be tested monthly. Also, relying on the natural gas to power the generator works well if a power outage does not impact gas supply. 

In summary: Homeowners no longer take their electricity security for granted. They are increasingly anxious about maintaining normalcy as supply uncertainty increases.

How solar companies view backup power

Where does power go when it has nowhere to go? As a solar company, we are often asked what happens to the power generated from the photovoltaic panels during a power outage. National building codes require the systems to shut down, which makes sense when the excess power has nowhere else to go. Batteries solve this problem. 

Batteries allow homeowners to use their solar system to supply power to the parts of their home they want to keep running – or to keep power flowing to the entire house. 

For solar companies, batteries (and the enabling smart controls) provide the final puzzle piece to energy resilience. We value being able to offer another solution to Yolo County property owners that allows their lives to continue uninterrupted. Batteries augment the product and service we offer as a solar company and allow us to meet the growing concerns of our community.

Adding residential batteries to the solar business offerings can be complicated, relative to simple solar installations. Over-simplifying these issues may lead to unmet expectations. Sizing a battery system requires matching a homeowner’s needs with their budget. In many cases, the appetite homeowners express for backup power does not match their budget. (Knowing that backup power is rarely used makes it easier for vendors to sell it since it’s difficult for homeowners to gauge whether their expectations are met.)

One final challenge faces the solar industry: Selecting the best battery system for the homeowner. We are in the Model T days of residential batteries, and system capabilities are changing rapidly. Early adopters often accept the bumps in the road that come with new product offers, but when pairing with dependable solar panels, the early stage battery system may fail to clear the high bar homeowners have come to expect.

Battery systems are often sold to meet two different objectives: provide backup power when the grid fails and provide power to the home or grid during the most expensive time periods during the day. Clearly, meeting one objective could result in missing the mark on the other. For example, the backup battery could feed back power at the end of the day but deplete the stored energy for that night’s unexpected power outage. 

As batteries become a more common offering from solar companies, clearly outlining tradeoffs of different solutions is key to meeting homeowners’ energy security needs.

Feel free to contact us if you’d like to learn more about our energy storage calculus and conclusions and receive a no-cost assessment tailored to your home and energy resiliency needs.