[Originally published May 12, 2015]
We launched Repower--a community-focused, group purchase program to help our friends and neighbors in Yolo County go solar--18 months ago. After more than 40 residential solar installations, here are a some observations from PG&E country:
Net Energy Metering (NEM). Net metering helps solar customers, especially when their usage is low in the spring and fall (less air conditioning and heating). In those months, customers bank their surplus energy production and use it to offset summer and winter usage.
ROR. Repower's 40+ installations generate an average of approximatley 6.5 kw--a bit higher than the state average--and customers get their money back in about 6 years, for a rate of return in the 12% range. I characterize solar as a bond investment, i.e., very low risk and steady returns for long periods of time.
Greater Personal Power. Our homeowners value and enjoy the feelings of independence and control that generating their own clean power gives them. Yes, they are tied to their utitlities through Net Energy Metering (NEM), but they are no longer subject to its rate hikes and complicated fee structures.
Community Choice Aggregation Districts. The Investor Owned Utility's (IOU) general reluctance to change their business models to support locally-generated power is forcing many communities to consider setting up their own Community Choice Aggregation Districts, another poke-in-the-eye to IOUs.
One IOU's Approach. The Modesto Irrigation District, which serves a relatively large customer base in the Central Valley, generates its own power. Because its Net Energy Metering program has already reached capacity, it's no longer available. Instead, solar customers qualify for a new rate structure that lowers their rates across the board. Installing a solar system instantly reduces the total bill by more than 25%, without taking into account the value of the solar generated electricity. While better than nothing, Modesto Irrigation District's fix still falls short of the ROR that homeowners should be getting for the surplus electricity they generate.But, it's a start.
A Big Game Changer ... Down the Line. On April 30, Tesla CEO Elon Musk revealed the new Tesla Energy battery for businesses and utility companies. Tesla's relatively inexpensive battery solutions for storing solar-generated electricity will be a game changer, but the extent of the transformation depends in part on the utilities developing favorable rate structures. The other major factor rests with battery development. Tesla's announced battery is intended for backup power supply, not for leveling usage. While Tesla's innovation is exciting, it will take years before it becomes pragmatic and adoptable for IOUs.
