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Arizona's largest utility, APS, surprises me...

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  • Arizona's largest utility, APS, surprises me...

    Not to be outdone by the smaller utilities, SRP and TEP, APS has applied for an additional fee on solar customers. This actually surprises me in several ways. First, it's far lower than I expected. I was thinking more around the $40-$50 that SRP got. Second, a fee based on system size is not as tied to one's use of the grid as say a demand charge would be. Third, it looks like APS customers will have a choice of either the fee or going on a demand rate. Finally, the cynic in me feels that a straight fee based on system size is far too transparent an additional cost: a demand charge makes it easier to obfuscate the true cost to solar customers and I'm sure that was motivating SRP in its decision. It's what I would have done had I been in APS' shoes.

    In any event, the article suggests that this is just a stopgap measure until a full rate case is taken up next year. Presumably, we will get a full accounting of the costs and benefits of rooftop solar at that time. Apparently, any rate changes won't take effect until 2017, at which point I expect to have fully paid off the upfront cost on my prepaid lease.

  • #2
    Originally posted by Ian S View Post
    Not to be outdone by the smaller utilities, SRP and TEP, APS has applied for an additional fee on solar customers. This actually surprises me in several ways. First, it's far lower than I expected. I was thinking more around the $40-$50 that SRP got. Second, a fee based on system size is not as tied to one's use of the grid as say a demand charge would be. Third, it looks like APS customers will have a choice of either the fee or going on a demand rate. Finally, the cynic in me feels that a straight fee based on system size is far too transparent an additional cost: a demand charge makes it easier to obfuscate the true cost to solar customers and I'm sure that was motivating SRP in its decision. It's what I would have done had I been in APS' shoes.

    In any event, the article suggests that this is just a stopgap measure until a full rate case is taken up next year. Presumably, we will get a full accounting of the costs and benefits of rooftop solar at that time. Apparently, any rate changes won't take effect until 2017, at which point I expect to have fully paid off the upfront cost on my prepaid lease.
    Howdy Ian,

    Good find, thanks for sharing it, cheers

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    • #3
      Ian: I'd go with the stopgap logic. The POCOs may not know much more than anyone else what the future holds and think this s the best way to keep the most options open. Just sayin'.

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      • #4
        Originally posted by Ian S View Post
        Third, it looks like APS customers will have a choice of either the fee or going on a demand rate.
        The interesting thing about this is that a demand rate substantially improves the economics of adding a modest-size battery pack to the solar installation, which in turn reduces homeowners' reliance on the grid by some incremental amount and gets them used to the idea of having a battery. If utilities are worried about a day in the future where it would be cheaper to go off-grid, this plan probably moves us ever so slightly closer to that day.

        I'm not sure if that was the effect APS intended.
        16x TenK 410W modules + 14x TenK 500W inverters

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        • #5
          I assume there won't be any APS public hearing until the next full rate case, so this newly proposed change will probably just slide through unopposed by the public?

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          • #6
            Originally posted by pleppik View Post
            The interesting thing about this is that a demand rate substantially improves the economics of adding a modest-size battery pack to the solar installation
            I think this may be the future of grid-tie installations. I looked back over some electric bills prior to my solar installation. At that time I was on a demand rate and during the summer, it was typical for my demand to be 7.5 kW. Currently, APS charges $13.50 per kW on its demand plan during the summer and with taxes, that comes up to about $15/kW. A battery pack that reduced that peak by say 3 kW would save about $45/month in the summer. Winter demand charge is only $9.30/ kW or maybe about $10 after taxes are added. Say between summer and winter you can save $30/month or $360/year. In ten years that's $3600. I suspect at some point we'll be able to buy a battery for that amount of money that would smooth the demand sufficiently for that $360/yr savings. Would a 10 kWh Li technology battery do it and work for at least 10 years? If so, how close are we to $360/kWh in battery pricing? I don't think this is pie in the sky anymore.

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            • #7
              Originally posted by Volusiano View Post
              I assume there won't be any APS public hearing until the next full rate case, so this newly proposed change will probably just slide through unopposed by the public?
              That's not how it worked before - there were well attended public meetings. So I expect the same now. But with holdovers on the Commission favoring ~$20 in the past and the new members funded by APS, I think approval is a slam dunk.

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              • #8
                Originally posted by Ian S View Post
                A battery pack that reduced that peak by say 3 kW would save about $45/month in the summer. Winter demand charge is only $9.30/ kW or maybe about $10 after taxes are added. Say between summer and winter you can save $30/month or $360/year. In ten years that's $3600. I suspect at some point we'll be able to buy a battery for that amount of money that would smooth the demand sufficiently for that $360/yr savings. Would a 10 kWh Li technology battery do it and work for at least 10 years? If so, how close are we to $360/kWh in battery pricing? I don't think this is pie in the sky anymore.
                Maybe this is the angle Tesla is working for its rumored home battery pack. I would be shocked if they could get the price to the point where it makes sense strictly per kWh. But if they can design it to shave the peaks for people who are on a demand rate, that might be more reasonable.

                If this line of speculation turns out to be true, I'll be very interested to see how the power companies react.
                16x TenK 410W modules + 14x TenK 500W inverters

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                • #9
                  Originally posted by Ian S View Post
                  If so, how close are we to $360/kWh in battery pricing? I don't think this is pie in the sky anymore.
                  According to this comment, we're already there and are headed to $230/kWh. In my situation then, under a demand rate structure, what am I going to need to lop off those demand peaks during peak hours? I figured I'd want to reduce my peak by 3kW to get a savings of somewhere around $360/year. At least in summer, that peak is going to be around 5-6 PM, maybe a bit later with solar output droping off. After 7PM , it doesn't matter as that's off peak. In any event, let's assume a triangular shape 3kW high and extending from 3-7 PM. The area would be 1/2 x 3kW x 4h = 6 kWh. So a 10 kWh battery would fit the bill with a decent amount to spare. That battery would cost $2300 + maybe another $500 for ancillary electronics. So $2800 investment paid off at $360/ per year yields a less than 8 year timeframe. That's looking pretty cost effective IMHO.
                  Last edited by Ian S; 04-04-2015, 04:33 PM. Reason: punctuation

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                  • #10
                    What would be cool is to be able to tap into the existing battery capacity you already have in your EV to help ease your peak demand during that time of need. Even the Chevy Volt currently has about 11 kwh capacity in its reserve (the actual battery is around 17 kwh but they only tap into 11 kwh of it to avoid deep discharge or too full charge). The Nissan Leaf is powered by a 24 kwh battery even. This way you don't need to buy a separate battery. You just need the electronic to charge up the car when there's excess solar production and draw from the car when there's negative solar production during the peak hours.

                    Of course there are logistical considerations like the car needs to be at home during that time when the peak demand occurs to be able to contribute. But generally the car is with people so if they're at work the car is at work, but if they're at home the car should be at home.

                    The problem in general is that usually the prime time is when people get home after work, crank on the AC and start doing the cooking and maybe laundry, etc. But by then the battery may already be exhausted from the commute to work and can't contribute. SRP on peak last until 8pm unlike APS's 7pm so that may make things worse.

                    So it may not work for everybody, but it may work for some. Like for those who still have some remaining capacity in their EV by the time they're home from work. Or for those who can charge at work or maybe fast charge just enough somewhere on the way home. Or those whose stay-at-home spouse gets to keep the EV at home to run around with the kids and errands. Or those with 2 EVs. This may even be an incentive to buy a second EV for the household for this purpose.

                    I think the solar industry should look hard at coming up with a product to make this happen. This can be the solution they need to counter the demand charge plan the POCOs are imposing on solar customers. Of course this will require an EV and not all solar customers have EV. But I think solar customers are more likely to be willing to consider buying an EV if it helps solve this demand charge issue for them. I suspect many solar customers probably already have an EV in mind in the future, so this may just be a compelling reason to get an EV sooner rather than later.

                    But I think the bigger challenge is to come up with a standard that EV manufacturers are willing to follow and adapt that allows a third party to tap into the EV's battery to draw from it in the first place. Maybe Tesla can pioneer and take the lead in coming up with this standard since Elon Musk also has a business interest in Solar City.

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