The newest try by the California Public Utilities Fee – CPUC, the regulator of the US state – to vary the principles of web metering, appears to be motivated once more by the need to kill rooftop PV, as an vitality economist. Ahmad Farooqui reported within the newest subject of pv journal.
On December 13, 2021, the CPUC issued a proposed resolution (PD) to reform the NEM 2.0 net-metering rules initiated in 2016, by introducing NEM 3.0. The proposed resolution – for the consideration of the 5 commissioners of the regulator – got here for extreme criticism from celebrities and public figures, together with former governor Arnold Schwarzenegger and actor Ed Norton. Professor Severin Borenstein, of the College of California’s Power Institute, additionally weighed in on the deserves of the proposed legislation.
Three damaging options emerged: a discriminatory grid-access price of $8 per kilowatt monthly, an unprecedented retroactive software of the proposed new guidelines to NEM 1.0 prospects and NEM 2.0, and a big discount within the electrical energy export cost fee.
These options can hinder the economics of rooftop photo voltaic. The payback interval for photo voltaic panel techniques will double or triple. Photo voltaic adoption charges are anticipated to say no.
The proposed resolution is in stark distinction to the state’s net-zero targets, which embody a mandate that every one new properties have photo voltaic panels on their roofs. The premise for taking such harsh measures is the CPUC’s need to get rid of a pattern that penalizes the poor and advantages the wealthy.
The proposal, nevertheless, ignores all different price transfers that come up within the design of electrical energy payments. This ignores subsidies supplied by the state to low-income prospects. This ignores the $1.5 billion the state spends yearly on vitality effectivity applications that trigger decreased use, creating one other helpful price shift.
Revisions are made
Beneath stress from the general public, the second proposed resolution, launched on November 10, proposes to take away the grid entry price and the retroactive provision. The elimination of two components, nevertheless, doesn’t make the second draft worthy of reward.
The “poor-to-rich” cost-shift narrative nonetheless permeates all the doc. The only real function of the newest proposed alternative of NEM 2.0 is to scale back the expansion of the set up of photo voltaic panels on the roof. That was additionally the motivation behind the primary PD.
The export compensation fee, which photo voltaic system homeowners pay for the electrical energy they inject into the grid, has been decreased considerably for a number of years underneath the newest proposed revision. Calling the decline a “glide path” is a misnomer. Mainly, the export cost is pushed off a cliff.
The newest proposed resolution states that its provisions will guarantee a nine-year payback interval for photo voltaic techniques. That’s uncertain as a result of that’s the present estimate, underneath NEM 2.0. The payback interval could possibly be even shorter for photo voltaic techniques paired with vitality storage, in line with the newest proposal drafted by the CPUC. Reaping the advantages of such an affiliation is much more uncertain, as a result of storage is costlier.
The newest PD states that every one new photo voltaic prospects will likely be positioned on the brand new time-of-use (TOU) “electrification” fee. In comparison with different TOU charges, it has a barely decrease vitality invoice however has a set price of $15 monthly. Non-skipable expenses will stay in impact. Thus, the common photo voltaic buyer can pay a set price of round $25 monthly.
The proposed resolution is tough to observe, even for skilled economists, and the mathematics behind it’s even more durable to know. As an alternative of a thought that can give attention to decreasing the switch of prices, the CPUC ought to state what the influence of carbon emissions will likely be in three situations: the established order underneath NEM 2.0, the primary proposed resolution for in NEM 3.0, and the newer ones.
The CPUC should additionally clarify why the social price take a look at – which accounts for extra prices and advantages for society as a complete that doesn’t immediately have an effect on the price of vitality provide – was not used. It is usually vital to clarify why the advantages of stability, particularly for these with financial savings, will not be taken under consideration, though they’re raised by many events throughout the decision-making course of.
The import fee has an odd, unknown enhance between 9 am and midday. Export charges bought a critical haircut. It’s uncertain that prospects will perceive the proposed guidelines. For instance, completely different events report the common export fee is $0.08/kWh when the photo voltaic output weighted common fee is near $0.06/kWh.
The brand new proposed draft states that the aim is to encourage the set up of storage utilizing photo voltaic. In that case, the best approach is to double the state’s own-generation incentive for batteries. To make these investments extra engaging, a essential peak interval pricing overlay needs to be added to the electrification fee. If prospects conform to that, they’re contributing to the state’s load flexibility targets and needs to be provided a rebate primarily based on the scale of their system. To handle the difficulty of equal entry, the rebate could also be doubled for low-income prospects.
In regards to the writer: Ahmad Farooqui is an vitality economist who has labored on fee design points for greater than 4 many years, on six continents. He has additionally testified almost 70 instances earlier than regulatory our bodies within the US and Canada and has appeared internationally earlier than governments, lawmakers, and regulators. He holds a doctorate from the College of California, Davis.
The views and opinions expressed on this article are these of the writer, and don’t essentially mirror these held by pv journal.
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