2013: Solar Project

I Am My Own Utility Company


PG&E authorized our solar PV system for Net Energy Metering (NEM) December 23, 2013. I found this ironic as it was the shortest day of the year, meaning we would get very little solar production that day (or for quite a while, until spring came).

Page 2 PG&E Net Energy Metering showing YTD consumption

I checked our previous two months' PG&E bills so as to have a baseline comparison; November usage as of 11/24/2013 was 761 kilo-Watt hours (kWh) and a month later as of 12/27/2013 it was 852 kWh. A month later our PG&E usage had dropped to 542 kWh as of 01/26/2014. Subsequent billings showed usage of 463 kWh as of 2/25/2014 and 245 kWh as of 3/26/2014. The days were getting longer and we were starting to reap the benefits.

Page 1 PG&E Net Energy Metering showing YTD net electricity balance

What does this mean in dollars? According to PG&E, we paid $109 for the Jan-Mar 2014 three month period - Inclusive of just $19.72 for March. Last year, we paid $418 to PG&E without solar for the same three month period.

I should note that we haven't actually "paid" anything to PG&E this year for electricity. PG&E keeps a running total called a cumulative true-up statement, a monthly report that nets the excess solar production we send to PG&E against our purchased PG&E electricity. Our bill is then settled at the end of the year. This annual summation allows us to offset a winter shortfall with excess summer solar production.

When your contractor sizes a solar installation - that is, determines the energy capacity desired and therefore the number of panels to install - it's not designed to completely offset your electric bill. Rather, the objective is to offset the high-price summer usage tiers, the time periods (and usage amounts) when power becomes more expensive. With our design, I expect to offset all but baseline expenses. There's no incentive to size a system to sell excess to PG&E; they pay just $.04 per kWh, as opposed to $.54 per kWh that they have been charging us in 2013 peak summer periods.

ProVoltz sized our system for a 60% PG&E consumption offset; which they estimate will result in an 87% utility cost offset. The reason for the difference between the two is attributed to eliminating upper tier purchasing. This expense offset does not factor in the purchase price, which I will discuss shortly.

Quote sheet depicting offsets, etc.

The quote shown at right summarizes the contractor's assessments. It includes a 5% annual utility cost escalation. My own research using California PUC information is closer to 3%. However, in fairness to solar contractors' guesstimates, I call your attention to PG&E's 11/15/2012 PUC 2014 rate filing requesting a 9.95% increase for households using 850 kWh per month on page 6. While I don't know the approved rate increase, you can see the difficulty in forecasting long-term savings.

The quote also depicts our estimated cost, and a 30% Federal Tax credit. PG&E rebates for solar PV are no longer available. So, our net cost after the tax credit is also shown. Since we installed our system in December 2013, we obtained tax credit benefit promptly in Feb 2014.

PG&E Clean Power Estimator analysis.

PG&E provides ample solar related information on the web. There is also a very useful clean power estimator. See example to the left. I highly recommend this tool to anyone considering a solar PV investment. The clean power estimator allows you to change many of your own consumption and offset variables in a what-if analysis. After it creates the initial report, select the advance options to choose your PG&E rate schedule (E6,E7, etc.) and an annual escalation estimate.

PG&E billing rate schedules are confusing. E6 and E7 are the two Time-Of-Day billing rate schedules available for solar owners to maximize their solar investment, excluding an electrical car owners' schedule. In a nutshell; if you have E7 before your solar installation, you can retain it. Otherwise you will be limited to E6. Both rate schedules are based on Time-Of-Day usage, but with variances in the pricing and time-of-day usage periods. I do not claim to know which is better for year round benefit. What I can share are two True-up account statements for the same winter billing period of our home.

PG&E Clean Power Estimator analysis. PG&E Clean Power Estimator analysis.

On the left is an E6 statement of $109.15 when we were inadvertently shifted to the E6 rate. And on the right is an E7 “Corrected” statement for $88.96 PG&E issued after moving us back to our old E7 rate schedule. Placement on the E7 schedule provided us a $20.19 credit for the same billing period and usage. More billing rate schedule information and discussions can be obtained by searching the web.

I'm excited about returning to this page with updates showing our actual savings. In the next section we address ownership value. Go, sun!