Why Solar Companies Are Panicking

Dec 10 2015
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Damian-150x150Right now there is a proposed plan to change solar panels utility rules. PG&E, Southern California Edison, San Diego Gas and Electric, and the various other electric companies, in California, depending on that person’s location, pay that producer for the energy.

The current system is unfair to the average tax and ratepayer. It gives services to the already wealthy and the heavily subsided group of solar panel owners. Right now and the past years there has been an unfair advantage, in the pseudo name of improving the world, for the green movement. Because it was recognized as a problem, Assembly Member Perea, introduced Assembly Bill 327, in 2013 to fix this unfairness.  Perea said, something like, “okay California Public Utilities Commission, you guys need to make this issue fairer.“

To help understand this idea lets look at an example, say you have a neighbor, Mr. Green, who has a solar panel on top of his house. Mr. Green is that typical green environmentalist man, he has a Prius, a compost pile, which doesn’t really do anything, except make you not want to go to his backyard BBQ parties out of fear of the gut retching stench from who knows what’s in that compost pile. However, the BBQ isn’t really an issue because, lets face it, a BBQ creates too much carbon emission, so Mr. Green wouldn’t even have one.

So, Mr. Green produces 30 kWh of energy and his household only uses 20. So what happens to the extra ten kWh? They go back to PG&E where PG&E pays Mr. Green for them. This creates many problems, not least of which is that PG&E is forced to buy something by the government that it doesn’t actually want.

So, one month, Mr. Green, has a party. The party goes all night using a lot more energy than his solar panels can handle. So this time, Mr. Green uses a whopping 80 kWh but his solar panel still only produces 30 kWh. So what should happen? Mr. Green would pay for 50 kWh? Nope! At least not exactly.

 

This creates many problems, not least of which is that PG&E is forced to buy something by the government that it doesn’t actually want.

Here comes the problem, the tier system. Some of you may have noticed in your electric bills that there is a method to help regulate the amount of energy you use. This principal basically is after you use a certain amount of energy then a new price is set per kWh.

The prices vary depending on many factors but for simplicity lets say the tiers are 0-20 kWh, 21-50 kWh and 51 and above kWh. So at 20 and below each kilowatt costs 50 cents, at 21-50 kWh each kWh costs 1 dollar, and 51 and above costs 2 dollars per kWh. This has been implemented to help lower the amount of energy used, and help control the peak periods. Both sides full heartily agree with this idea.

The problem with this feature is you would pay a lot more than Mr. Green even though you guys both almost used the same amount of energy.

So lets look at the above example of Mr. Green’s party. Lets assume you and Mr. Green both used 80 kWh. Mr. Green produced 30 kWh so he gets paid $.50 per Kwh for the first 20 kWh then $1 per kWh for last 10 kWh.  This totals up to a rebate of $40. Then Mr. Green gets charged $.50 for the first 20 kWh of the remaining 50 kWh then $1 for the last 30 kWh. Which is a cost of $40. Mr. Green’s bill would be completely free. Even though he did not produce the same amount of energy he used.

Your bill would be $.50 for the first 20 kWh, $1 for the next 30 kWh, and $2 for the remaining 30 kWh. So your bill would be 100 dollars.

 

The problem with this feature is you would pay a lot more than Mr. Green even though you guys both almost used the same amount of energy.

 

The second problem is the production of energy is needed at various times. Energy is used more at peak times such as after 5 or 6pm also when the sun goes downs.

Back to our example, Mr. Green is using a lot of energy and causing a much larger drain on the grid than earlier in the morning when his solar panels were giving power to the grid.  But energy is charged by kWh not by time of day, so PG&E’s ratepayers and everyone else without solar panels are getting screwed because they are paying for energy when they need it, but are also paying for energy when they don’t need it.

Finally, the energy grid requires a two-way system. Right now Mr. Green’s energy being transferred to PG&E is getting financed by you, all of the ratepayers, and taxpayers transferring energy back to PG&E, where as everyone else has to pay a fee for PG&E to transfer.

In conclusion the purpose of the California Public Utilities Commission’s mission is to make things fair. Some ideas to make this fairer is to charge people like Mr. Green an extra cost per kWh to offset the cost of the electricity grid. Also have a different tier system of receiving energy and have a different cost for when energy is produced.

Damian Fussel is an advocate for Coalition of Energy Users, and worked under environmental and energy issues in the California Assembly.

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