Idea for small residential PV system, in California

[paulrye]

Hi all,

This is my first post on SolarPanelTalk. Just registered today. I'm an ex-mechanical engineer (20 years). Been teaching HS math for the last 14 years. Been interested in solar panels for about 10 years, had several quotes done, but never pulled the trigger. Had an idea a few months ago which I've been mulling over. Now it's summer, I'm getting more serious about it.


Here's the idea:
Here in California, we have tiered residential pricing. In Long Beach, where I live, the pricing from Southern California Edison is:

Tier Tier1 Tier2 Tier3 Tier4
Cents per kWh 13¢ 16¢ 27¢ 31¢

In a nutshell, the idea is to build a PV system just large enough to offset power usage that exceeds Tier 2 and is priced at Tier 3. Then, I buy cheap power from SCE in Tier 1 and 2, and I credit myself for the power from my small PV system at 27-31 cents per kWh Tier 3 and 4.


OK, I know it's not as simple as that, and I didn't expect it would be. I suspected that SCE would not re-imburse me at 27 cents. Rather, I suspected they would re-imburse at the lowest rate first, then at higher rates as a grid-tied system feeds more power into the grid, only re-imbursing at the highest rate as the point of zero net power usage is approached. So, I called SCE to ask about reimbursement rates and was completely brushed off. "We don't determine that. The CPUC determines that. It depends on your installation. Call this number for the California Solar Initiative. Solar is our competition. We are not answering any questions about solar, period. Go the frack away. Are you still asking questions? GO THE FRACK AWAY!" So I called the number they gave me for the CSI, and it referred me to the information on SCE's Website, which does not explain the reimbursement rate. Niiiice. Now, I am here.

Here's my very rough analysis, so far. My March 2013 bill from SCE was a typical bill for me:

Tier Tier1 Tier2 Tier3 Tier4 Tier5
Cents per kWh 13¢ 16¢ 29¢ 33¢ 36¢

My usage: Tier1 Tier2 Tier3 Tier4 Tier5
kWh 307 92 44 0 0

Yes, I know this is five tiers, but I think the pricing just recently changed to four tiers for residential usage. So, the four tiers given above are the current tiers, but since this bill was a March bill, it was still five tiers then. Using the March bill, the charges were $67.39 total, and the Tier 3 usage accounted for 9.9% of my power, but 17.6% of my bill. The total power usage for the month was 443 kWh, and I figure a 600W system could supply about 10% of that. That's just two or three panels, depending on the size. Basically, I just want to cap my rate at 16 cents per KWh. Actually, I might go a bit higher on the Watts in case I use more power in the future, or SCE's pricing structure changes. But, you get the idea.

The problem seems to be, how to get reimbursed at the higher rate. I was thinking, the only way to get reimbursed at the higher rate would be to do a non-grid-tied, battery type system, but that would mean wiring some parts of my house for the battery system and some parts to remain powered by SCE. Not very appealing for such a small system. On the other hand, I do have a freezer and a freezer/refrigerator in the garage (I home brew), which could provide a very predictable load for an off-grid system. The problem here is, I don't have any experience estimating the economics of a battery based system.

[Edit, July 2, 1:21 PM: OK. Done some reading on this site about battery systems. Now I know the off-grid, battery approach would make no economic sense. That leaves the grid-tied approach.]

Then, my son found a thread on this site containing comments by "Stomp" about a 7.5 kW system, that seems to achieve an equitable billing rate by using a smart meter and a TOU billing plan.

At this point, I'm looking at this two ways:
1) If Stomp's analysis was correct, a viable approach could be a grid-tied system, using a smart meter, and TOU billing.
2) If the only way to obtain the 27 cent per kWh offset is with an off-grid, battery type system, the approach looks less attractive because of the extra expense of the batteries.

I suppose a third way to look at it would be as a modified No. 1, by adding batteries; then, it's also a backup system in case of a power outage.

Well, any general feedback on the economics of the idea, any of these tacks, or a different tack, or a project they have tried like this, would be welcome.

[Naptown]

Too long didn't read LOL
Look at your bill and see how much is in the upper tiers annually and set up a system that produces that much.
Forget batteries they only add unnecessary expense and complexity.
And buy all your equipment for the safety and rebates.

[bonaire]

Some who use TOU billing without solar seem to work it out if nobody is home during the day. A small solar array of say 4kw could work for you but you need someone to review your bills, like Naptown says. Prices of solar installs in California are higher than other parts of the country due to the billing issues. None of it is due to demand but mostly due to poor management by the power companies, government mis steps and other problems. Wholesale energy costs in the area are similar to other parts of the country.

[russ]

None of it is due to demand but mostly due to poor management by the power companies, government mis steps and other problems. Wholesale energy costs in the area are similar to other parts of the country.

That is 3 lbs of baloney in a 2 lb bag! Not one word is correct.

Excessive costs are mainly due to the loony "green" government policies that are not at all green.

Utility rates are set by government agencies.

With a large portion of imported power CA costs will naturally be somewhat higher.

Or maybe they should shut down more local generation? Maybe there is some strange math in CA that makes foolishness come out OK?

[paulrye]

Too long didn't read LOL
Look at your bill and see how much is in the upper tiers annually and set up a system that produces that much.
Forget batteries they only add unnecessary expense and complexity.
And buy all your equipment for the safety and rebates.

Only about 10% of my usage is in the upper tiers. A 300W array could supply that. The key question is, can I get reimbursed by SCE for grid-tied power at the upper tier rates? Then it might sense to put in a small system. That's what I'm trying to figure out at this stage. SCE would not even discuss it with me.

[paulrye]

A small solar array of say 4kw could work for you but you need someone to review your bills, like Naptown says.

I'm trying to figure out if a much smaller system would make sense, to take advantage of the tiered pricing we have in California. It really hinges on what rate the POCO would actually credit me for the power I produce. And, I'm not just asking because of my own installation, I'm looking at doing a feasibility study of small solar that I could use to evaluate other people's homes too. Most would use more power than me and have a higher percentage of their power usage in the upper tiers. So, would SCE credit my production against the upper tier pricing? That's the key question now. But, they wouldn't even discuss pricing with me.

[russ]

So, would SCE credit my production against the upper tier pricing? That's the key question now. But, they wouldn't even discuss pricing with me.

It is in the regulations they are controlled by - you can look it up. SCE does not get to do what they want but are told what they are allowed to do/charge.

[Naptown]

If you are not on a time of use plan then anything you generate will reduce your upper tiers.
Look at your bill. Determine annual use in each of the tiers. Use PVWatts to determine how much of a system is required to reduce or eliminate the tiers you want.
Say you want to shave the top two tiers and annually you use 2000 KWH in those tiers. Then play with system size to generate 2000 KWH annually or in the highest use month if it is air conditioning that is the culprit.

[paulrye]

It is in the regulations they are controlled by - you can look it up. SCE does not get to do what they want but are told what they are allowed to do/charge.

Yes, I know SCE are regulated by the California Public Utilities Commission (CPUC). I live in Long Beach, CA, within sight of their power plant. They are my POCO. But, I've spent hours already trying to find something that says clearly how the reimbursement works. And, I'm not the kind of person who asks questions on forums if I haven't already tried to find the information myself. I've been to the SCE site, the CPUC site, and the California Solar Initiative (CSI) site.

I found this:
California Public Utilities Commission, California Solar Initiative, Program Handbook

http://www.cpuc.ca.gov/NR/rdonlyres/DF8FE0E6-E528-44E0-AA85-6315987A421F/0/201304CSI_Handbook.pdf

which contained a link to this nifty calculator:

http://gosolarcalifornia.cleanpowerestimator.com/default.aspx

but, nowhere can I find anything that explains or defines the reimbursement rate explicitly for grid-tied solar. Their calculator is neat, but I have no idea what is in it. I will be making my own calculator. I will keep looking but I was hoping someone here might already have tracked down the information.

As with so many things involving money, I suspect it is deliberately hard to find for the same reason it is hard to find the phone number or mailing address to send a cancellation notice whenever you want to cancel your phone or Internet service. Yes, it's buried in the regulations somewhere, but where !!!

[paulrye]

If you are not on a time of use plan then anything you generate will reduce your upper tiers.
Look at your bill. Determine annual use in each of the tiers. Use PVWatts to determine how much of a system is required to reduce or eliminate the tiers you want.
Say you want to shave the top two tiers and annually you use 2000 KWH in those tiers. Then play with system size to generate 2000 KWH annually or in the highest use month if it is air conditioning that is the culprit.

Thank you. That sounds promising. Elsewhere on this site, I saw the term "tier-shaving" for the first time, and I was hoping the PV power produced would be credited right off the top tiers. Here is an average bill for me: Capture.JPG. As you can see, there is little tier-shaving to do for me. That 44 kWh is only about 10% of my energy use. Because of the tiered pricing, however, by shaving 10% of my energy use, I could save roughly 18% on my bill. Ten percent of my energy use could be supplied by 300W of solar panels.

For me personally, it's hardly worth the trouble, except: if my energy use should grow (I don't currently have AC), SCE should raise it's prices, SCE should shrink the lower tiers, etc, etc. So, maybe it makes sense for me to put in 600W of solar panels, a 1kW system, or even 2kW as you said. For others, who are heavily into those higher tiers right now, it might make more sense to add larger systems. But why try to offset $0.13 and $0.16 power, if the payback is so much better on $0.29 power?

That's what I want to model in an Excel spreadsheet. With the right information, I can do something like this:

http://gosolarcalifornia.cleanpowerestimator.com/default.aspx

Not as pretty, without the nice graphics, but just as functional.

But, I want to be certain of how that "tier shaving" reimbursement works. It sounds unlike SCE to offer something that would essentially pay me $0.29/kWh for my solar power and charge me the rates in the lower two tiers for their power. Anyone who can point me to the actual regulations governing that, it would be much appreciated.

[Naptown]

Try

https://Www.dsireusa.org

[Wy_White_Wolf]

Don't know if this will help

https://www.sce.com/NR/rdonlyres/E4420035-F7BE-4863-8E59-F4B3EFE2B360/0/090824_Net_Metering_NEM_Fact_Sheet.pdf

From another site:

Q7. What type of metering is required and do I have to pay for it?

Answer: All customers participating in Net Energy Metering (NEM) must have a bi-directional meter, one that measures electricity flow in two directions. If your current meter is not bi-directional, SCE will replace it with a bi-directional meter as part of enrolling you in an NEM program. Note: SCE charges Direct Access customers for meter replacement.

Customers on a time-of-use rate (GS-2 or PA-2 and greater demand rates), Direct Access, or who participate in certain net metering programs, such as Pay for Performance, will require an interval data recording (IDR) meter

https://www.sce.com/Sc3/Templates/Topic3GenericCol.aspx?NRMODE=Published&NRNODEGUID=%7bDC91EE9C-5945-4DAD-A30F-F704BDB32268%7d&NRORIGINALURL=%2fsc3%2fcustomergeneration%2fnet-energy-faqs%2f&NRCACHEHINT=Guest

Single meter would only keep track of total KWH used or feed into the system. So it would drop the total monthly KWH billed and they would be billed at there appropriate tier rate. On a single meter system the POCO really doesn't know how much your system generated.

WWW

[paulrye]

My son, who has more patience than me at ferreting out information on the Internet, found this buried in the FAQ on the SCE Website: General Net Energy Metering Questions.

Standard NEM
When your small renewable energy system generates a surplus of energy, the surplus will be credited to your account at the same rate you would have been charged had you purchased the electricity from SCE. If after a 12 month billing period you have net surplus energy, you can apply your overall credit toward future energy charges, or receive a check for the amount due. Under this rate option, domestic accounts are billed once a year for “net” energy consumed or generated over the previous 12 months, if any.
Read the NEM Rate Schedule

Well, that doesn't really answer the questions, because SCE could say they would have charged me $0.13/hWh for "that electricity".

In the NEM Rate Schedule, it says:

This Schedule is available on a first-come, first-served basis until the first of the following events
occurs: (a) the total combined rated generating capacity of all Renewable Electrical Generating
Facilities served under this Schedule, and all Eligible Generators served under Schedule NEM-V and
Schedule MASH-VNM, exceeds five (5) percent of Southern California Edison’s (SCE) aggregate
customer peak demand, as defined in Special Condition 6; or (b) January 1, 2015, unless the
Commission issues new policy rules for the Net Energy Metering (NEM) program before that date.
Notwithstanding the foregoing January 1, 2015 suspension provision, SCE will continue to offer NEM
to renewable customer-sited generation until it has reached its target for solar photovoltaic capacity
under the California Solar Initiative.

OK, that means when the aggregate installed solar base reaches a certain legally mandated level, no new customers need apply. No new grid-tied systems at some point.

Continuing in the NEM Rate Schedule:

This Schedule is applicable to Direct Access (DA) Customers provided the DA Customer’s Electric
Service Provider (ESP) offers a NEM tariff consistent with the provisions of this Schedule. Eligible DA
Customers should look to their ESPs for NEM services related to the energy generation charges and
credits that may result from receiving NEM service.

DA and CCA customers are not eligible to receive Net Surplus Compensation (NSC) from SCE.

OK, DA means third party electrical service provider. That doesn't apply to SCE residential customers.

Continuing:

RATES
As determined in each billing period, when a Customer is a net consumer of energy, Es is greater
than EF, where Es is energy supplied by SCE and EF is energy generated by the Customers’
Renewable Electrical Generating Facility and exported into SCE’s electrical system, the resulting
net consumed energy will be used in the calculation of all applicable energy charges, calculated by
1) multiplying the Customer’s net consumed kWh by the applicable energy rate components of the
Customer’s OAT, in each Time-Of-Use (TOU) period when applicable, for Bundled Service
Customers, or 2) multiplying the Customer’s net consumed kWh by the applicable Delivery Service
rate components of the Customer’s OAT, in each TOU period when applicable, for DA and CCA
Service Customers (the Customer’s ESP or Community Choice Aggregator is responsible for
providing the generation-related energy charges).

Now, that's perfectly effing clear, isn't it? Here's what I get out of this. To do grid-tie with SCE, you must agree to NEM, you will be billed monthly for fees and taxes, you will be billed yearly for the net energy, and the rate you will be billed for the energy will be "calculated by multiplying the Customer’s net consumed kWh by the applicable energy rate components of the Customer’s Otherwise Applicable Tariff (OAT), in each Time-Of-Use (TOU) period when applicable." And, GLMF figuring that out !

[paulrye]

Try
Www.dsireusa.org

Thanks, lots of info. there to digest. Will start searching the site.

[paulrye]

Don't know if this will help

https://www.sce.com/NR/rdonlyres/E4420035-F7BE-4863-8E59-F4B3EFE2B360/0/090824_Net_Metering_NEM_Fact_Sheet.pdf

Single meter would only keep track of total KWH used or feed into the system. So it would drop the total monthly KWH billed and they would be billed at there appropriate tier rate. On a single meter system the POCO really doesn't know how much your system generated.

WWW

That first link is excellent. The second one is not working for me. I wonder how you found that first link. Can it be found somewhere on the General Net Energy Metering Questions page?

That first link makes it very clear that with a bi-directional meter, the credit is applied directly to power usage via the meter, so the billing would apply to the net usage and hence the lower tier pricing would apply.

I found this too, Capture (2).JPG, on the same page as the link I just provided. Yikes! "... sized to your historic electric usage, up to 1,000kW." That sounds like a gotcha, meant to prohibit precisely what I'm proposing. That is, tier shaving. If you must install a system sized to provide essentially all of your own power, there's no way to size the system to target the upper tiers . Unless that's wrong, the devil has once again appeared in the details .