Solar Surplus: What SHOULD Utility Co's Pay

We are in the process of deciding which company in our area to go with for a PV system, using the Enphase microinverters. " The 6.44 kW proposed system will produce approximately 7,084kWh of electrical energy per year. All available production incentives, which are the sum of offset energy purchase, credit for excess production and WA State production payments, will provide a current value of 25cents/kWh for your solar energy, or 2 1/2 times the cost of utility supplied electricity".

Being very new to PV systems, does this ring true?

 

The trouble is that people putting in solar panels are normaly interested in being green - so they also go around adding insulation, efficient appliances and CF lamps - then having halved their power consumption they find the panels will take 50 years to pay back! There are a few companies that will rent you the panels and even some deals where they install an over capacity for free, sell the power back to the grid and you just pay your existing electric bill but at todays power prices guaranteed for the next 20years.

 

Ehh, do you really get a year-round daily average of 3 hours of direct Sunlight at that location? That's what that calculation assumes.

Be very wary of any hype provided by the manufacturer or installer. Check yourself with the state and your electric utility on their policies.

 

Your assumption(s) are completely false! Consider this. Let's assume for example that you are using 100kwh/day. Build a system to cover this load, and it takes say 20 years to pay off. Now, if you reduce your loads through good energy conservation/insulation/cfls/ etc to 10 kwh/day, 1/10th the original load. Now you build a system to cover that load, the system would only need to be 1/10th as big, and ergo ~1/10 the cost. The payoff would still be the same 20 years!

As we suggest all the time in the solar biz, every dollar spent on reducing loads, ends up reducing system cost by ~$10

All that said, it might make much better sense to invest in larger co-op systems that can take better advantage of site conditions/economies of scale etc. In our case, a Pv system in western Washington might yield ~60% of nameplate rating over the average year. A similar system in Eastern Washington might yield close to 90% for example. Couple the net harvest gain, and the economy of scale by buying into a bigger system (smaller kw hard cost) my money is way better spent.

We can do this quite easily just through green power purchases through the power company.

If you are thinking of buying a PV system, regardless of what the utility or the installer tells you, I suggest that you run a PV watt program for your specific location and site conditions.

PVWatts v. 2

Plug in your details and it will give you real world calcs of how much you can expect to harvest.

Icarus

 

Looks like 3.3 hours a day according to PVWatts

 

Actually... Due to the mysteries of compound interest, I think doing the conservation first actually gives a better return on investment. Why? Because the principal you pay out for the smaller system means you have more money left in the bank compared to the larger system. (I think this is referred to as the "opportunity cost", i.e.: how much money could you have made through other investments over that 20 year period, vs the money you make through investing in PV.) True that the conservation steps will mean some out-of-pocket, but done right they tend to have a much, much shorter ROI than PV. (almost everything does)

That said, the rule of thumb is that PV is like buying 20 years of electricity in advance, and if it looks like prices will climb precipitously (is that an oxymoron?), then it can be a good investment.

And as you suggest, co-op systems (or simply investing in clean production) seem like they might have better ROI.

 

although they are a bit beyond the reach of a small co-op, there is a company that is building "community wind projects". based in Minnesota, they do most of their jobs current in small midwestern areas. not quiet displaying the electric utility, but building on a scale to power 100-500 homes.

they have several projects running as little as a megawatt.

i think they have the up and coming business model.

Juhl Wind Inc. - The Leader In Community Wind

 

As an addendum to my previous post:


For example, a simple PV watts calc for Seattle of a 4 kw system yields ~ $248 worth of power per year: http://rredc.nrel.gov/solar/calculat.../pvwattsv1.cgi

Invest in that same sytem in Yakima and it will yield ~$320 worth of power: http://rredc.nrel.gov/solar/calculat.../pvwattsv1.cgi
Or a ~30% increase. Even calculating transmission loses, it is still way more efficient to build such a facility in E. Washington, strictly due to the amount of energy harvest available.

So the said 4kw sysem, with no rebates, no utility grants, no tax credits etc might cost $20-30,000 turn key (on a home scaled installation). Do the same 4 kw, and install it in a solar farm where economies of scale might reduce that (exclusive of said rebates) any you ight reduce that cost by a factor or 25-40% (only a guess).

So by co-oping, in a better location, you can get a 30% increase in output for the same cost, add in another 30% decrease in cost due to scale, factor in available rebates/tax credits etc, and you can see pretty easily the co-op idea makes way better financial as well as energy sense. One final note, it is quite likely that a solar farm efficiency will be even higher due to the fact that it will have fewer compromises in it's design. Your room may not be quite on the optimal angle, you may have slight partial shading issues, your panel temperatures might be higher (resulting in lower output) due to roof conditions.

So while I am all for PV solar, I really believe that people need to begin to think to get past having systems on their own houses, especially if BETTER conditions exist elsewhere. What we need to encourage is simple ways for people to do such investing such that they can see and feel the results of their investment. It is a pretty good feeling to see your meter spinning backwards, but if you got a bigger (check or power rebate) every month for a co-op off site system, that would feel pretty good too.

 

icarus,

Around the Whidbey Island/Port Townsend/Sequim area (In the rain shadow) we are getting substantially more output per year on PV systems. I have been in touch with numerous folks in my area who are getting double to those figures you pulled up.
All I can say is what I have seen.

 

Porttac,

You are absolutely right, (and further illustrate my point). You example is a good example of micro-climate and how it can effect solar calcs. The numbers for Whidbey/Sequim are going to beat Seattle numbers easily on an annual basis. (We are 15 minutes north of B'ham, and we beat B'hams number by ~20%) I used Seattle on the PV watts calc, just because it was easy and it illustrates the point.

Once again to restate that point: If one is looking to maximize PV output per Watt of Pv, Wh per $$ invested small variances in geography might make a huge difference, and ergo putting PV on my house may not be as good a ROI investment as putting money into a PV farm in a better location,, for a variety of reasons.

That said, there are lots of reasons that people want the PV on their roof, especially if thy build a hybrid battery back up/grid tie system. Personally I think this represents wasted efficiency, and that these folks would be way farther ahead saving the money that the batteries and the hybrid inverter cost, put that money into more PV, and buy a cheap generator for the (relatively) rare times that the grid goes down. But everyone has their comfort zone.

Like I have always said, I am a big proponent of PV and don't wish to do anything to discourage people from investing in it.

 

Definitely - especially for people who don't own their own roof (renters).

But I'm not aware of any solar co-op programs. Are you?

It would be awesome to say "Put me in for $1000 in to the solar farm pool and deduct the energy the panels my $1000 buy me from my energy bill for 25 years".

 

Drees,

I know that our local utility has a green power purchase program which buys as much green power as you wish (up to 100%) The net result is that more and more green generating facilities are built.

That said, I do not know of any solar co-ops, but I would bet they are out there. If they are not, perhaps it is something worth pursuing, as it makes such great empiric sense.

Ps A quick search reveals: The first is a news article discussing the issue, especially about a bill before the Colo. legislature.

The rest are just general links,, no promises as to their veracity.


http://denver.bizjournals.com/denve...-ops_could_have_bright_future_under_bill.html

http://solaroregon.org/get-involved/northwest-solar-coop

http://www.associatedcontent.com/article/1684255/solar_coops_bringing_sun_power_to_your.html

http://www.cooperativecommunityenergy.com/t_index.html

 

I got my letter from PG&E. They are proposing a pay back of $0.08/kwh for net generators.

To put this into perspective, last year we generated an extra 300 kwh (and had ~$250 - 300 credit left over on our annual true up bill). I was hoping we'd get a check for $250 - 300, instead we would get a check for $24. While a bit underwhelming, if I view it as a pitcher of beer and a pizza on PG&E, it doesn't seem so bad .

 

Wait a second - SCE charges over $0.60/kWh at the highest tiers? Even in the winter? They win the prize for ripping customers off the most!

That is quite a bit higher than the ~$0.30/kWh that SDG&E charges for it's highest tier.

Looking at their normal residential rate schedule, the price tiers look to be very similar to SDG&E's, so I think your 500% is a bit of an exaggeration (perhaps 150% higher at most for the top tier).

You might want to investigate Time-of-Use billing which could get you the most money back based on your usage and even negate your bill even when you use more electricity than you generate.

 

i can see not getting as much from the utilities as they are taking simply because their overhead is much greater and they have greater maintenance responsibilities as well.

if getting 8 cents/kwh back i feel is more than reasonable, but should be adjusted on a yearly basis after usage is taken into effect.

if you used say 5000 kwh and generated 6000 you should not be paying anything but a service charge and getting a check for 1000 kwh. daily, monthly or seasonal use should not be a factor as in Hill's case.

i am pretty sure that is the deal at Puget Power in our region (i know the deal is not the same everywhere as i know a few in the mountains who pay a lot less and get a lot less back)

obtw, last i heard, the payback from Puget Power was like 3 or 4 C/kwh... but our rates are all pretty much under 10 cents. the rates may have changed. the EV guy i know, i have not seen in 2 years. i usually see him at the Lacey Alternative Fuel Fair and Electric Car Rally, but missed it last year due to other obligations (May 1 this year) he is also a guy who has an EV and pays NOTHING to charge it. yep...works in rainy cloudy WA State too!!

 

I don't disagree with this, but I am confused on a certain level. In our PG&E bill, we pay about $8 per month in "fees" (I don't have the exact fee name in front of me, but $7+ of it is some fee and then there is a smaller fee that goes with it). We don't get credit for this fee, even if we had a net credit at the end of the year (thus, we will always have to pay around $90 - $100 for our electrical use).

Does this fee include overhead? I don't know. If it did, then it smacks of "double dipping" because we've paid into it once and then they use the same arguement to reduce payout on energy generated. I suspect this isn't the case, but I have to check into my bills a bit to see what the $7+ fee is.

 

the fee is a hookup charge. in our area it pays the PUC (public utilities commission) salaries who determine our rates, bond options, future needs, etc. also pays to create your bill, admin overhead, line maintenance, tree trimming, yada yada. that is not refundable and its like $7.25 a month in our area.

there is also other taxes, etc that are not refundable, surcharges (another name for taxes) that are charged to the electric company and they simply pass the charge onto u

 

1. Conservation & efficiency are the most cost effective. First you do an energy audit and implement conservation measures (windows, caulking, doors, switch & outlet plates, drapes), then you "go get more."

2. Double efficiency and you cut cost by one-half. It is very cost effective for a utility to make use of electricity put back onto the grid. This avoids construction, maintenance and personnel cost.

3. Electricity can be tier-priced (the more you use, the more it cost) coupled with time-of-use metering. Use more during peak use periods means electricity costs more per Kwh. Use less means electricity costs less per Kwh. Those who are efficient and use less collect more benefit. Those who use more and are inefficient pay more. The cost is "pay it forward" not "pay it back."

4. Utilities can "zero out" any credit at the end of the year or carry over any surplus. Either way the utility is ahead through deferred cost.

5. Just as minutes are carried over on cell phone contracts, a credit can be carried over by utilities. The newer digital meters that are remotely read make accounting easier.

6. Where possible a residence should have two digital meters - one incoming and one outgoing (for those who have difficulty reading a digital meter and could never make sense of the analog meters).

7. Photovoltaic, wind and small hydro systems should be sized to meet demand. Few plan to overproduce and always end up with a surplus.

8. Utilities should work with planning departments and builders to encourage cost effective efficiency. A well-built or retrofitted structure can be very cost effective and obtain a "pay back" period of 2.5 to 5 years - decreasing concern over surpluses.

9. A system and structure must be climate-appropriate. You don't design and build the same structure everywhere regardless of the number of heating- and cooling-degree days.

10. We live in 2300 sqft home. Our utility bill has been less than $50 month (compared to neighbors who have monthly bills of $200 to $800), year round for over 21 years. We do NOT have PV, small hydro or wind. I retrofitted the house. Compared to the neighbors, our "pay back" time was 2.5 years. The utility just retrofitted all homes with digital "smart" electricity and natural gas meters. Our bills have gone up, even though our electricity and natural gas use is the same or less. Nevertheless, we are money ahead having collected the savings over the last 21 years, and in comparison to our neighbors.

11. You may produce a surplus every month, but you cannot expect the utility to treat you as a utility. Yes, we all want parity or better.