California Net Surplus Generation Rate is Set

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The California Solar Initiative requires that solar systems that receive an incentive be sized to meet on-site load.

However, what if you install a solar system, then your kids go off to college?

Suddenly, without the hairdryers, radios, and extra computers, you may find yourself with extra solar generation at the end of the year.

Previously, any excess generation, after the annual net metering true-up, was gifted to utilities. AB 920 (Huffman; sponsored by Environment California) passed in 2009, required California Investor-Owned Utilities to purchase net surplus generation at a rate set by the Commission, under some very specific parameters.

After voluminous commentary by parties to the proceeding, on June 10 the CPUC issued a decision. Unfortunately, it isn’t going to be much.

The Commission voted 4-1 to use short term, day-ahead pricing, rather than a metric that recognized that solar is a long-term generating asset. Current DLAP pricing isn’t much (we’ve had a great hydro year — on May 31, DLAP was 0.2 cents/kWh for the day), but futures indicate a 2012 average under 4 to 5 cents/kWh.

A concern is that this doesn’t set adverse precedent. Take a look at the video of the vote (you need RealPlayer). While the Commissioners left themselves room by pointing out that these are not long-term contracts and therefore deserve different treatment and value (an argument that we are not persuaded by), they also indicate that costs are a primary motivating concern.

Here’s the SF Chronicle article.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

  • http://www.electric-reviews.org Mark D.

    If your kids go off to live somewhere else then it would be time to take in a border or a renter. I think that the people who are setting the rates are just trying to better reflect the price of the day to save money just like anybody would.

    The problem I have with this is that the ones in power always offer great incentives to draw you in but then they seem to renege and change the rules so to speak and the little guys who have installed their own system to take advantage of the benefits available gets burned.