San Marcos San Diego new System Quick

[katass1031]

No, $120 is the minimum USAGE. So if you use $0 (net zero), you pay $120, and anything < $120, you also pay $120. Of course, all these can change in the future.

So, what this says is that there is 667kWh of free energy that SDGE is giving? I thought that the rule is you have to pay the $10/month plus the overage. Maybe I am missing the point here.

[thejq]

So, what this says is that there is 667kWh of free energy that SDGE is giving? I thought that the rule is you have to pay the $10/month plus the overage. Maybe I am missing the point here.

No, it's not free. You have to pay $120 to get it. Think of it as a cellular plan. Say for $25 you get 100 minutes, any addition minute costs $0.25. So you can use up to 100 minutes and pay the $25 monthly fee, and pay more if you use over 100 minutes. Same idea. They want to make sure that in order to be on the grid, you have pay something, otherwise, none-solar customers will be subsidizing your connection.

[katass1031]

No, it's not free. You have to pay $120 to get it. Think of it as a cellular plan. Say for $25 you get 100 minutes, any addition minute costs $0.25. So you can use up to 100 minutes and pay the $25 monthly fee, and pay more if you use over 100 minutes. Same idea. They want to make sure that in order to be on the grid, you have pay something, otherwise, none-solar customers will be subsidizing your connection.

Still confused, but I'll believe you and try to figure out if 95% or 100% is right for me.

[sensij]

No, it's not free. You have to pay $120 to get it. Think of it as a cellular plan. Say for $25 you get 100 minutes, any addition minute costs $0.25. So you can use up to 100 minutes and pay the $25 monthly fee, and pay more if you use over 100 minutes. Same idea. They want to make sure that in order to be on the grid, you have pay something, otherwise, none-solar customers will be subsidizing your connection.

+1. I like this analogy.

[Willaby]

Still confused, but I'll believe you and try to figure out if 95% or 100% is right for me.

Katass (lol) at 9900kwh / year, you're spending around $2,400 year with our beloved SDG&E. The $120 year minimum is just 5% of that amount, rather trivial. Your system will degrade 1-2% the first year and .5-1% per year there after, so you will loose about 5% after 5 years anyway (why do they forget this?). The real bad economy is if you don't size big enough today, it will not be possible to economically add later on, not even considering all the tax savings today. Make your best calculations now, consider your future needs, and the degradation, and also how many years you will live in the house, and favor a little bigger system. Now, if that extra $1,000 ($700 after tax credit) spend keeps you from feeding your kids or from retiring 10 years early, well you might want to rethink the whole deal.

now, just maybe, there might be one or two here on the forum who will claim I just gave you the worst advice ever, but let's see how it goes . . . . and if so, ask them to be specific.

[J.P.M.]

The PVWatt site allows you to put in your physical location, panel orientation (az. and tilt) to estimate your average yearly production, hence your system size. It should be the first thing you do. Most salesman will oversize your system so they can sell you more stuff. Cash will definitely get you the best pricing. What's your zip code and roof orientation? Personally I don't think 9.9MWh/year requires >6KW system unless your orientation is really bad. Check your PM for some more pointers.

Katass: Read the JQ's post again. Right now, you have the cart before the horse. Unless you want to oversize, overprice, and waste effort and money, spend the time and make the effort to learn what's needed and how the solar process works. Folks here have nothing to gain by B.S.'ing you and really do want to help. Take a deep breath and do it the right way.

Unless you have a boatload of shading and/or a really crappy orientation, your sizing looks way too big. for 9,900 kWh/yr.

[MKI]

Don't do it! You will regret it. You will get paid $0.04/KWh (SDGE's wholesale price) for excess energy at true up time. So say, if you used 9000 KWh/yr and generated 10,000 KWh/yr, you will have 1,000 KWh in excess, and be paid $40 in credit against your minimum charge of $120. So you end up paying $80. But that's at a huge cost for so little pay back. eg. if the system is properly sized to to produce 9000-120/0.18 = 8333 KWh/yr, you will end up paying $120. But to reduce your payment by $40, you have to size it to generate 1,666KWh/yr (10,000-8,333) more ==> really bad decision and economics.

Okay, let me get this straight. If at the end of the year my system overproduces and there is a credit of $40, I still owe $80 ($120 less $40 credit)? If at the end of the year my system under produces and my bill is $40, I owe an extra $80 to make it $120? Thank you so much for pointing this out!

[sensij]

now, just maybe, there might be one or two here on the forum who will claim I just gave you the worst advice ever, but let's see how it goes . . . . and if so, ask them to be specific.

Let's look at panels that offset tier 1 electricity.
Let's say a 300 W panel cost $3.80 / W to have installed, and you get 30% of that back in federal ITC in the first year, so about $800 net out of pocket.

That 300 W panel, south facing with 18 deg tilt and no shade might produce 523 kWh annually, and degrade 2% the first year and 0.5% each year after that.

Let's also assume tier 1 rates progress as testified by SDG&E this summer during the rate reform proceeding. (Note that the some leveling of rates in 2018-2020 is accompanied by an increasing monthly minimum charge). Let's also assume that once the tier consilidation and rate reform is fully rolled in, rates increase at something close to the long term average, 3% annually.

Let's use 4% as a reasonable discount rate for calculating NPV (my own personal discount rate is higher, others might be lower)

Year	Summer	Winter	Avg	kWh generated	Cost Avoided	NPV
2015	18.1	16.5	17.3
2016	22.1	20.0	21.1	523	110	110
2017	23.7	21.2	22.5	513	115	221
2018	23.7	21.1	22.4	510	114	326
2019	24.1	21.3	22.7	507	115	429
2020	24	21.2	22.6	505	114	526
2021	24.7	21.8	23.3	502	117	622
2022	25.5	22.5	24.0	500	120	717
2023	26.2	23.2	24.7	497	123	810
2024	27.0	23.9	25.4	495	126	902
2025	27.8	24.6	26.2	492	129	993
2026	28.7	25.3	27.0	490	132	1082
2027	29.5	26.1	27.8	487	135	1170
2028	30.4	26.9	28.6	485	139	1257

By this analysis, that panel doesn't break even until about 8 years in. If your time horizon is longer than that, and these assumptions here are consistent with your view of the future, replacing tier 1 energy can make sense.

What happens when you start replacing energy that you are paying for in the minimum charge? Let's say that you have an array sized perfectly to offset all but 667 kWh of energy in the first year, so for a 9900 kWh year consumer, that means 9233 kWh. To that array, you add one more 300 W panel, bringing you very close to 100% offset (adding the same 523 kWh mentioned above, for a total of 9756 kWh). Let's use the same degradation rate as above.

Year	Summer	Winter	Avg	kWh generated	Tier 1 kWh covered by the last panel.	Cost Avoided by the last panel	NPV
2015	18.1	16.5	17.3
2016	22.1	20.0	21.1	9756	0	0	0
2017	23.7	21.2	22.5	9561	0	0	0
2018	23.7	21.1	22.4	9513	0	0	0
2019	24.1	21.3	22.7	9466	0	0	0
2020	24	21.2	22.6	9418	0	0	0
2021	24.7	21.8	23.3	9371	0	0	0
2022	25.5	22.5	24.0	9324	0	0	0
2023	26.2	23.2	24.7	9278	0	0	0
2024	27.0	23.9	25.4	9231	2	0	0
2025	27.8	24.6	26.2	9185	48	13	9
2026	28.7	25.3	27.0	9139	94	25	26
2027	29.5	26.1	27.8	9093	140	39	51
2028	30.4	26.9	28.6	9048	185	53	84

Again, any production over 9233 kWh in this scenario is worthless because you have to pay the minimum charge anyway. (there is some slight value producing over 9900 kWh, at 0.04/kWh, but the time required to recover the cost of the panel at that rate is so many years that it isn't seriously worth discussing here).

You can see that by buying that extra panel that offsets energy already being paid for by the monthly minimum, over the 13 year horizon used here you are electing to spend $800 to save the equivalent of $84.. Sounds like a great deal, eh?

Really, if you are considering 100% offset (after following the good advice by J.P.M. and others about reducing your consumption by other means first), it is much better to err on the low side, and land somewhere in tier 1, than it is to err on the high side, and land in level that is getting paid by the minimum bill anyway.

This doesn't even get into TOU rates, which may offer some advantage to smaller arrays over the tiered plans (even with the proposed changes potentially coming at the end of next year).

[J.P.M.]

Let's look at panels that offset tier 1 electricity.
Let's say a 300 W panel cost $3.80 / W to have installed, and you get 30% of that back in federal ITC in the first year, so about $800 net out of pocket.

That 300 W panel, south facing with 18 deg tilt and no shade might produce 523 kWh annually, and degrade 2% the first year and 0.5% each year after that.

Let's also assume tier 1 rates progress as testified by SDG&E this summer during the rate reform proceeding. (Note that the some leveling of rates in 2018-2020 is accompanied by an increasing monthly minimum charge). Let's also assume that once the tier consilidation and rate reform is fully rolled in, rates increase at something close to the long term average, 3% annually.

Let's use 4% as a reasonable discount rate for calculating NPV (my own personal discount rate is higher, others might be lower)

Year	Summer	Winter	Avg	kWh generated	Cost Avoided	NPV
2015	18.1	16.5	17.3
2016	22.1	20.0	21.1	523	110	110
2017	23.7	21.2	22.5	513	115	221
2018	23.7	21.1	22.4	510	114	326
2019	24.1	21.3	22.7	507	115	429
2020	24	21.2	22.6	505	114	526
2021	24.7	21.8	23.3	502	117	622
2022	25.5	22.5	24.0	500	120	717
2023	26.2	23.2	24.7	497	123	810
2024	27.0	23.9	25.4	495	126	902
2025	27.8	24.6	26.2	492	129	993
2026	28.7	25.3	27.0	490	132	1082
2027	29.5	26.1	27.8	487	135	1170
2028	30.4	26.9	28.6	485	139	1257

By this analysis, that panel doesn't break even until about 8 years in. If your time horizon is longer than that, and these assumptions here are consistent with your view of the future, replacing tier 1 energy can make sense.

What happens when you start replacing energy that you are paying for in the minimum charge? Let's say that you have an array sized perfectly to offset all but 667 kWh of energy in the first year, so for a 9900 kWh year consumer, that means 9233 kWh. To that array, you add one more 300 W panel, bringing you very close to 100% offset (adding the same 523 kWh mentioned above, for a total of 9756 kWh). Let's use the same degradation rate as above.

Year	Summer	Winter	Avg	kWh generated	Tier 1 kWh covered by the last panel.	Cost Avoided by the last panel	NPV
2015	18.1	16.5	17.3
2016	22.1	20.0	21.1	9756	0	0	0
2017	23.7	21.2	22.5	9561	0	0	0
2018	23.7	21.1	22.4	9513	0	0	0
2019	24.1	21.3	22.7	9466	0	0	0
2020	24	21.2	22.6	9418	0	0	0
2021	24.7	21.8	23.3	9371	0	0	0
2022	25.5	22.5	24.0	9324	0	0	0
2023	26.2	23.2	24.7	9278	0	0	0
2024	27.0	23.9	25.4	9231	2	0	0
2025	27.8	24.6	26.2	9185	48	13	9
2026	28.7	25.3	27.0	9139	94	25	26
2027	29.5	26.1	27.8	9093	140	39	51
2028	30.4	26.9	28.6	9048	185	53	84

Again, any production over 9233 kWh in this scenario is worthless because you have to pay the minimum charge anyway. (there is some slight value producing over 9900 kWh, at 0.04/kWh, but the time required to recover the cost of the panel at that rate is so many years that it isn't seriously worth discussing here).

You can see that by buying that extra panel that offsets energy already being paid for by the monthly minimum, over the 13 year horizon used here you are electing to spend $800 to save the equivalent of $84.. Sounds like a great deal, eh?

Really, if you are considering 100% offset (after following the good advice by J.P.M. and others about reducing your consumption by other means first), it is much better to err on the low side, and land somewhere in tier 1, than it is to err on the high side, and land in level that is getting paid by the minimum bill anyway.

This doesn't even get into TOU rates, which may offer some advantage to smaller arrays over the tiered plans (even with the proposed changes potentially coming at the end of next year).

Mostly +1. I'd add that the goal of any economic analysis is to find (guess really, given the uncertainties about the future) the least cost method of meeting the energy need, considering solar and non solar (the POCO) alternatives. The problem is to determine the solar system size that results in the lowest life cycle cost combination of solar and POCO power.

[thejq]

Okay, let me get this straight. If at the end of the year my system overproduces and there is a credit of $40, I still owe $80 ($120 less $40 credit)? If at the end of the year my system under produces and my bill is $40, I owe an extra $80 to make it $120? Thank you so much for pointing this out!

Yes, that's correct. So the best sizing (or the most optimal one to minimize payment) is use just enough to reach the $120 mark.

[thejq]

now, just maybe, there might be one or two here on the forum who will claim I just gave you the worst advice ever, but let's see how it goes . . . . and if so, ask them to be specific.

No, I have seen much worse advice/ideas than yours. Someone once bought a system (from Amazon I think) with microinverters and plugged into an outlet and claimed it's grid tied.

As you might have read from other threads that there's a good chance that the minimum charge will likely keep increasing. If so, the penalty for oversizing will be even bigger. SDG&E is going out of its way to discourage large solar systems with large minimum charge and wholesale buyback rates. There's no economic incentive to fight it simply because you don't like SDGE and want to "stick it to them". Fighting SDGE in the name of "justices" is like wrestling a pig in the mud. After a while, you realize that the pig actually enjoys it. I'm sure SDGE will be more than happy to pay $0.04/WKh for your clean energy and have you pay the full minimum charge at the same time.

[Willaby]

Really, if you are considering 100% offset (after following the good advice by J.P.M. and others about reducing your consumption by other means first), it is much better to err on the low side, and land somewhere in tier 1, than it is to err on the high side, and land in level that is getting paid by the minimum bill anyway.

This doesn't even get into TOU rates, which may offer some advantage to smaller arrays over the tiered plans (even with the proposed changes potentially coming at the end of next year).

Sensij, I essentially agree with your entire post! I might quibble a little with the additional cost of a single 300w panel being high, and your not mentioning that "Cost Avoided" is equivalent to a tax free return which makes the 4c you omitted more valuable for most by 35% (the tax free nature of avoided cost is not stressed enough, btw). But do you realize your entire post had little to do with my advice to Katass? I didn't mention the ROI at 4c at all. Why would I? It is as trivial as the cost of one extra panel or paying $120/year. I favor a little bigger because of the unknown, or even because you want to run AC more, or do a load of wash during the peak. Call it insurance that you can't economically add later due to ITC sunset, NEM 1.0 ending and the cost of permitting & installing added panels. I think we all agree that now is the best combination of incentives, right? If you don't like calling it insurance, call the cost a long term option against future usage and degradation.

Really it is just a difference of opinions, you favor a little less, I favor a little more. Question, in a couple years when you upgrade your Spark to an electron guzzling Tesla, will you remember this post? (I'm not really sure if a Tesla uses much more kwh than a Spark, but I'd probably drive it more)

[Willaby]

No, I have seen much worse advice/ideas than yours. Someone once bought a system (from Amazon I think) with microinverters and plugged into an outlet and claimed it's grid tied.

As you might have read from other threads that there's a good chance that the minimum charge will likely keep increasing. If so, the penalty for oversizing will be even bigger. SDG&E is going out of its way to discourage large solar systems with large minimum charge and wholesale buyback rates. There's no economic incentive to fight it simply because you don't like SDGE and want to "stick it to them". Fighting SDGE in the name of "justices" is like wrestling a pig in the mud. After a while, you realize that the pig actually enjoys it. I'm sure SDGE will be more than happy to pay $0.04/WKh for your clean energy and have you pay the full minimum charge at the same time.

Ok, but again, my advice to Katass was not to buy more solar to make 4c. That nor any ROI were even mentioned. It was for so many other reasons. Call it a "pig in the mud", but I do take pleasure in not paying SDG&E, maybe even at 4c.

[J.P.M.]

Call it a "pig in the mud", but I do take pleasure in not paying SDG&amp;E, maybe even at 4c.

It's a free country, but that seems like a good example of a pyrrhic victory to me. I'd think a better way to not pay the POCO might be to use a bit less electricity. That would also have the benefit of allowing a smaller (read less $$) capital cost for the PV.

Look Willaby, no one here, or at least me anyway, is dictating anything to anyone. There are many considerations to the end goal, which BTW, is usually to reduce an electric bill, not get PV for its own sake or some childish concept of "getting even". It's not about how big a system is or who's panel is used. It's about goals and lifestyles. The economic considerations are a big part of the decision process, but at the end of the day, only one of several considerations.

To deliberately oversize a system is a free choice. What you mention of annual panel degradation, lifestyle changes and many other things are all part of a sound evaluation process which, since the future is unknown, involves some educated guesswork. Nothing new there. Those and other variables are part of the stuff of something called life cycle costing.

What some, including me are suggesting is to be aware of the long term financial consequences of actions taken. Tools such as life cycle costing can be useful to put some relative value and consequence to some of those variables with the full knowledge that some guesses will be on the mark, some way off. At the end of the analysis, some oversizing, maybe a lot, may be viewed as a desirable choice. So be it, and hail the freedom to make the choice.

But I damn the slothful ignorance that makes a lot of choices look moronic when viewed through the lens of a fair amount of experience in engineering economics, life cycle costing, process economics, comparison of alternatives and about 40 years of watching the same mistakes being made, usually, especially and simply due to ignorance that could mostly be eliminated by a few hours with a book.

Oversize all you want and stick you finger in the POCO's eye all you want if it feels good. I'd only suggest to the OP and other's reading this to be careful if you choose to emulate such behavior, and take some care to not inadvertently and ignorantly stick a finger or two from your other hand where the sun doesn't shine.

As usual, take what you want of the above. Scrap the rest.

[Willaby]

It's a free country, but that seems like a good example of a pyrrhic victory to me. I'd think a better way to not pay the POCO might be to use a bit less electricity. That would also have the benefit of allowing a smaller (read less $$) capital cost for the PV.

Look Willaby, no one here, or at least me anyway, is dictating anything to anyone. There are many considerations to the end goal, which BTW, is usually to reduce an electric bill, not get PV for its own sake or some childish concept of "getting even". It's not about how big a system is or who's panel is used. It's about goals and lifestyles. The economic considerations are a big part of the decision process, but at the end of the day, only one of several considerations.

To deliberately oversize a system is a free choice. What you mention of annual panel degradation, lifestyle changes and many other things are all part of a sound evaluation process which, since the future is unknown, involves some educated guesswork. Nothing new there. Those and other variables are part of the stuff of something called life cycle costing.

What some, including me are suggesting is to be aware of the long term financial consequences of actions taken. Tools such as life cycle costing can be useful to put some relative value and consequence to some of those variables with the full knowledge that some guesses will be on the mark, some way off. At the end of the analysis, some oversizing, maybe a lot, may be viewed as a desirable choice. So be it, and hail the freedom to make the choice.

But I damn the slothful ignorance that makes a lot of choices look moronic when viewed through the lens of a fair amount of experience in engineering economics, life cycle costing, process economics, comparison of alternatives and about 40 years of watching the same mistakes being made, usually, especially and simply due to ignorance that could mostly be eliminated by a few hours with a book.

Oversize all you want and stick you finger in the POCO's eye all you want if it feels good. I'd only suggest to the OP and other's reading this to be careful if you choose to emulate such behavior, and take some care to not inadvertently and ignorantly stick a finger or two from your other hand where the sun doesn't shine.

As usual, take what you want of the above. Scrap the rest.

JPM - I'm guessing you're generally not the life of parties? (me neither) Not the first time you've defended your SDG&E, and not the first time you've resorted to name calling when you didn't agree with someone. If you read my posts on SDG&E, you will see that I am fairly (not fully) knowledgeable of their history and how they got to where they are but I'd be happy to learn more. If you didn't work for them, you must have a relative, or know someone, or own shares, in any case come clean because you are quite alone cheering them on this forum. Regarding reducing our electric bill, what should we all do? Huddle around a lone LED bulb and listen to a crank radio? Lastly, to clarify, it's not "over-sizing", it's "RIGHT-SIZING", which does NOT include earning 4c kwh (sensij and thejq went off track on that one, not me).

Funny though, a couple months ago I believe Sensij was posting not to take out tier 1 at all, now his calculations may indicate he is? even at a $3.80/kw system cost? Less than eight year payback and that's pretax, I'd take that! (oh yeah, I already did).