Your Neighbor's Solar Panels Are Secretly Saving You Money

We are, admittedly, geeks; Popular Mechanics is cool. Therein, an article this month engages the value of solar, beyond the obvious utility savings. Thesis:

There’s a persistent myth that says houses with solar panels could raise energy costs for their neighbors. But a new analysis puts that notion to bed, showing that solar panels actually drop the cost of power, even for nearby houses.

How’s that? Scientists say solar panels lower peak demand on stressed traditional grids and have reduced the amount of infrastructure dollars that energy utilities must invest. By hooking your solar panels to the grid, you’re sneakily a hands-on investor in your local utilities.

The perpetual tug-of-war between the solar industry and utilities (and their regulators) sees and saws on the cost (or, positively, value) of residential solar systems. The Popular Mechanics piece references a study cited in the March issue of Renewable and Sustainable Energy Reviews. Instead of solar panels increasing the cost of electricity for homes without solar, the reverse is true (through the financial lens of utilities): Homes with solar panels greatly subsidize local electrical grids.

The researchers broke down the “value of solar,” assessing variables (i.e., avoided costs to utilities) like plant O&M [operation & management] fixed and variable; fuel; generation capacity, reserve capacity, transmission capacity, distribution capacity, and environmental and health liability. The results:

… grid-tied utility customers are being grossly under-compensated in most of the U.S. as the value of solar eclipses the net metering rate as well as two-tiered rates.

One additional thought: A community’s energy resilience improves as its distributed generation network (grid-connected solar systems) grows. In simple terms, communities in Yolo County are less dependent on the grid given the abundance of local solar systems. When demand for electricity peaks — think of August/September last year — we have a vast array of homes producing their own power (including nearly one-in-three in Davis). Hence, we are less susceptible to brown outs, and we make PG&E’s job easier (and less expensive).

Let Yolo shine.

PG&E's EV rate with solar: No bueno

In October 2019, PG&E disseminated a rosy communique to homeowners who were enrolled in their “EV-A” electric vehicle rate schedule. The letter trumpeted the benefits of their new (“EV-2”) rate schedule: Extended off-peak period, lower peak rates, the world’s now a better place … all thanks to Pacific Gas & Electric Co.

Approximately one-third of homeowners Repower has helped go solar own, or plan to acquire, an electric vehicle. And, why not? If your amortized cost to generate solar electricity is ~8 cents/kWh and you garner four miles of range per kWh, driving via sunshine (trite!) is beyond cheap, let alone ecologically awesome.

Background: In February 2019 we encapsulated and quantified the benefits of PG&E’s “EV-A” rate schedule in a blog post, specifically for homeowners who enjoyed solar and drove electric vehicles. In short, under EV-A there was a good degree of arbitrage for solar+EV owners: If you played the game, your solar system only needed to generate ~75% of the electricity you consumed to, at annual net-metering true-up, zero out your bill. This was accomplished by shifting your electrical loads — charging your car, doing laundry, running your pool pump — to off-peak periods, when electricity was valued at ~13 cents/kWh. Conversely, if your solar generation exceeded your household electricity use during peak period (2-9 p.m., Monday-Friday), you racked up credits at 45-50 cents/kWh. Simple and viable.

Today, PG&E’s electric vehicle rate schedule (EV-2) is not viable. (Side note: EV owners who enrolled in the original, EV-A, rate schedule prior to October 2019 were grandfathered in for five years, commencing the date you enrolled; such homeowners will be transitioned to EV-2 after five years.)

The net-metering calcs are stark, when contrasting three PGE time-of-use rate schedules: EV-A, EV-2 and TOU-C (PGE’s de-facto time-of-use rate schedule, whether you do or do not own an EV). The below examples are actual net-metering data from a Repower homeowner who purchased an EV (after going solar). At annual true-up, they consumed 2,157 kWh more than their solar system generated. They charged their car and did laundry at night, and programmed their pool pump to run during off-peak periods too.

First, annual metrics for a solar + EV homeowner under the original EV-A rate schedule:

Next, here’s the same homeowner under EV-2:

And, here are the results if the homeowner enrolled in TOU-C:

Same electricity use pattern, same solar generation profile, three different annual financial results: 

- EV-A: $211

- EV-2: $959

- TOU-C: $623

Hence, since EV-A is not available, this electric vehicle-owning homeowner should enroll in TOU-C (and, thereby, save $336/year versus EV-2). If the homeowner had been enrolled in EV-A and was then switched, automatically by PG&E, to EV-2, their annual electricity costs would have increased $748. Ouch.

PG&E can be a pain in the posterior, particularly if you endeavor to keep up with their always changing rate schedules, time-of-use periods, and rates. If you are considering solar — and own or are contemplating an EV — feel free to contact us to receive a no-cost analysis of your net-metering options.

PG&E burns, solar rises

It goes without saying — but, here we say it — that last week was a really bad week for PG&E. Surprising? No, it was a runaway train wreck apt to happen, particularly as PG&E’s liabilities for the San Bruno gas line explosions and wildfires over the past two years amplified. A few months ago — pre-PGE bankruptcy — California PUC Chairman Michael Picker opined, “PG&E is too big to succeed.”

What’s next for PG&E? Myriad opinions have been tendered over the past week. While there’s no consensus, one thing is clear: PG&E’s rates are going to increase; we, the ratepayers, will bear part of the burden.

There’s also consensus that those of us who have solar (300,000+ net-metering customers in PG&E territory) are safe. PG&E cannot arbitrarily change current net-metering rules, as established by the PUC. Furthermore, solar/distributed generation is part of the solution, not an element of the problem. When property owners generate electricity via solar panels, energy use is centralized and the burden on the grid is mitigated. Solar is safe and secure.

Over the past week, we’ve chatted with a dozen or so prospective solar homeowners. Why solar, why now? we ask. Almost verbatim responses: Now that PG&E is going into bankruptcy and rates are destined to rise, the time seems right. (Secondarily, several homeowners have shared they view solar as a sage investment vis-a-vis volatile financial markets; solar generates a ~15% annual yield.)

While PG&E’s future is unknown, solar provides certainty for homeowners. Today, PG&E’s baseline (“Tier 1”) electricity rate is 22 cents per kWh. For Repower homeowners, the amortized cost to generate solar electricity is ~8 cents per kWh. With PG&E, you are at risk of (and have no control over) future rate increases. When you go solar, you lock in your price of electricity for 25 years.

And, the sun always rises :)

Valley Clean Energy is here: Choice is good for solar homeowners

Change can be a good thing. Or, it can be bad. Or, somewhere in between.

Choice, however, is good. If you had one option — for anything you do or buy — you’re stuck. You have no choice and must opt for the sole solution.

Choice enables consumers to make a decision, to weigh options and decide what’s in their best interest. Choice makes markets healthy and efficient, thus benefiting consumers.

For the past few generations, Yolo County residents have not had a choice regarding their electricity: PG&E, the de facto monopoly, was it. That ceased in June with the debut of Valley Clean Energy (VCE). Though nothing changed with our electricity delivery, customer service and billing, VCE was a change that confused some. This is understandable: Consumers now had a choice.

As we’ve shared in prior posts (here, here and here), if you do not have solar panels, VCE is a no brainer: Participate and you’ll save a few bucks each month while reducing your carbon footprint. Or, stick with PG&E and pay more to an investor-owned utility for dirtier energy. Case closed.

Furthermore, if you have solar or are considering going solar, VCE is a viable option. It provides solar homeowners with a choice for how to net-meter their electricity.

When VCE commenced its solar net-metering program in June, we identified and shared a few (in our opinion) flaws to their accounting methodology. In short order, VCE staff absorbed our input, consulted the public, and amended their solar program. This efficient, transparent and productive process evidences the virtue of a publicly-controlled program. (Imagine trying to get PG&E to modify their solar program … no chance.)

Effective January 1, 2019, VCE’s new net-metering program will take effect and homeowners with solar will have a choice. Here’s a quick summary:

• If you installed solar before June 1, 2018 you will stick with your annual true-up date (that you currently employ with PG&E) and you will be enrolled in VCE’s program at your true-up.

• If you went solar after June 1, 2018, your annual true-up date will be in March.

• In both cases, your net-metering accounting will occur every month (versus once/year with PG&E). At the end of your 12-month solar accounting calendar, your true up ($) will be the same, except …

• … with VCE, if your solar system generates more electricity than you use in a given month, you will receive an additional one-cent per kWh credit.

Importantly, when you go solar, you receive “permission to operate” from PG&E and you are grandfathered in for 20 years under the prevailing (California Public Utilities Commission mandated) net-metering program. Participating in VCE’s net-metering program does not impact your 20-year utility agreement. (This is critical; we received written acknowledgement from PG&E.)

So, congratulations, you now have a choice. Options are good and, for solar homeowners, VCE will put a few extra dollars in your pocket without harming your solar interconnection agreement.

Feel free to stop by our workspace or contact us with questions. Viva community choice!

YoloShines: NAMI-Yolo

There are a lot of rewarding and fun virtues of doing what we do: Helping friends and neighbors achieve energy independence (while slashing their carbon footprint and saving thousands of dollars) is extremely gratifying. At the top (of the Repower fun/rewarding list) may be when we ask homeowners to select a local nonprofit for our YoloShines program.

And, this time we have a new twist. Repower homeowners John and Alice Provost asked if we could split our $500 donation among two organizations. Of course.

John and Alice selected the Davis School Arts Foundation (read more about our prior support of DSAF here) and Yolo-NAMI, a new organization in our basket of beneficiaries. Here's what John and Alice had to say about Yolo-NAMI:

The National Alliance for the Mentally Ill is a national organization with local chapters throughout the country, including one in Yolo County. Yolo NAMI works with cities and counties in Yolo County as well as private organizations that provide services to residents of Yolo County who suffer from some type of mental illness. This is a population that is greatly underserved and often suffers in isolation due to the nature of their illnesses. Yolo NAMI provides much needed assistance to these individuals and is a very worthy organization to support.

Thank you, John and Alice, for making our community a better place.