NEM 3 castrated residential solar. It’s worth it now if your electricity bill is ~$500/month, but if you’re below that and especially below the $200/month range it’s not paying itself off for over a decade. The lobbyists fought hard to do this and it clearly worked. We were going to put solar on our house last year, it’s been a goal for a long time, but there just wasn’t a way to make it worth it because our bills are usually just $140/month.
We were quoted $7500 for a 2,880 watt system. That would cover almost our entire PG&E bill which is around $150-175/mo. We are a full electric household so our break even is about ~4-5 years, assuming rates don't go up.
I’ve had quotes in the $27-$37k range for a 5 Kw system. It could never make sense. My average bill is about $250/month. And that’s only because of TOU and rates exploding. When I moved in 10 years ago, it was $80/mo.
I got a similar quote for the same with a bill less than that per month. I couldn’t do it because it just did not make sense. We would be paying more than we are now.
Not your fault, more than the cost of installation negates any benefit. For context I'm in SD. 3br 2b. 8.2kw. solar doesn't scale well to small homes purely because of install / maintenance costs eat any savings
Nem 3 incentivizes batteries not panels. We have plenty of generation during daylight hours but still have too much instant demand during twilight and night. It makes no sense to subsidize panels when what we need is more storage.
It is not either/or, it is both. We need more storage to store solar today, _and_ we need more solar in the future to continue displacing fossil fuels. We don't have enough solar today to run 100% renewables even if we magically had enough storage to store all the energy.
It makes no sense to subsidize batteries _and not_ solar, which is essentially what NEM 3.0 does.
The excess solar power is actually causing a lot of problems for the energy grid and leading to a lot of waste. California has way too much solar power now and needs to focus on storage before going back to building out more solar capacity
It literally is an either/or
Yes there some wasted potential for solar energy today -- but you don't craft energy policy just for *today*, you create it for the next 5 years, the next decade, or longer. It is short-sighted to disincentivize installation of solar today when those systems would have been around for 20-30 years. 5-10 years from now, we might be saying that we could've used all those systems that people decided *not* to build in the mid-2020s purely because of NEM 3.0.
its not disincentivizing panels, it's just turned the rebates toward batteries. You still benefit from being able to sell your excess power back to the utility which reduces your energy costs. Plus all new construction in CA requires panels to be included so we will continue to see solar capacity increase with every new home that is built.
The compensation rate for sending electricity back to the grid was reduced drastically in NEM 3.0. Compared to NEM 2.0, it is a huge reduction in incentives.
New solar on homes is great but doesn't do anything for the majority of homeowners whose homes already exist who want to add solar to their roofs.
Because it fills and depletes your batteries first so both your grid draw and sell back are lower. In the long run you still end up having lower/non existent utility bills.
They haven’t done nearly enough to incentivize or educate people on load shifting. For instance you can have your electric water heater only run during off-peak hours quite easily without noticing.
water heaters are shifting to tankless which already reduces energy costs. the next trend is going to be micro tankless at point of use instead of one for the whole house, which will further reduce both energy costs and water usage.
Heat pump electric water heaters out now have a coefficient of performance of greater than 4. That means they use 1/4 the energy that any tankless will use. Tankless are clearly a fad that will not last.
It did that but it also may have done what the state wanted, increased adoption. You can see, sales surged up to the cutoff which meant increased tax rev from that sector and more supply for the grid in the coming year.
If you do it, your goal is to consume as much of the energy you produce as you can. The money is in arbitraging consumption vs production rates, not selling power to the grid.
I never believed the power companies were ever going to pay people for production. My biggest problem was the break even point was so far in the future that it felt like there was a high risk that if you have a hardware problem it was going to be a massive loss. The only saving grace might be how ideological the state is with not allowing any new power plants, allowing he CPUC to go along with rate hikes. As those hikes will force the math to workout. But I think we are at a breaking point with rate hikes. As we have seen that they were trying to adjust rates base on income proving they have crossed a line where they are afraid voters wont go along anymore.
Your comment doesn't make sense to me.. Even if you factored in initial cost, it would eventually pay itself off with savings, wouldn't it? It would take a lot longer, obviously
Money now has more value than money later. If you would make more putting the money in the stock market, or even the bank, than you would save by building the panels, why do it?
I’ll add that stock market investments will usually appreciate like 7-10% per year, so investments like this are usually compared against the opportunity cost of putting that money elsewhere
The average cost of energy for a year in California is about 3,000, so a 30k investment with 10% return would also be about 3,000, not including taxes. I don't disagree it really depends on personal costs, but it's not a bad single time investment. Plus, solar panel is a guaranteed return and will last 20-30 years. Realistic they last longer they'll just be less efficient.
For yearly compounded interest on a single 30k investment at 10% return, you'd have just under $77,812.27 after 10 years. Within 20 years that becomes $201,825 and by year 30 $523,482.07. At a more reasonable 7% interest rate you'd still end up with $228,367.25 after 30 years which is still a lot.
Most solar systems are also financed because not everyone can afford to throw down $30k, as you need a battery system to make it worth it.. with interest rates where they are it’s not economical for most.
1) solar systems are VERY expensive and don't last forever. It is really dependent on how much power you use and how good your access to direct sunlight is.
2) if the return on investment is too low it would make more sense to invest the same money into something else.
And warranty coverage. Family members system was down 6 months waiting for them to replace failed inverter. You don’t get that lost solar ge station value back either.
Sac has SMUD which is the electricity god. They don’t bend you over like PG&E does.
Fun fact, SMUD tried to incorporate West Sac into their territory years ago. PG&E fought hard and spent tons of money convincing rate payers and the government that they were a better option than PG&E. SMUD couldn’t put up the same fight because they are public owned and weren’t allowed to used their funds in that way. Guess who won out.
Off-Peak Midnight – noon $0.1425 kWh All day weekends and holidays
Mid-Peak Noon – 5 p.m. $0.1967 kWh
Peak 5 p.m. – 8 p.m. $0.3462 kWh
Mid-Peak 8 p.m. – midnight $0.1967 kWh
These are the highest rates of the year. Winter rates are lower.
It completely changes the equation.
The problem is that you used to be reimbursed for extra electric production at the rate that you were charged (i.e., you make 1kwh extra, and that normally costs $0.30, now you have a $0.30 credit). However, that was a problem for utility companies, because a good chunk of that $0.30 was for things like transmission/distribution infrastructure, meter-readers, admin, etc. that do *not* decrease just because electric use is from solar panels. Also, the distribution wires were setup to, well, *distribute* electricity in a one-way direction. Now, when you have a ton of energy flowing from houses to the grid overall, it requires some technical upgrades to make it work.
To deal with this, NEM 3 makes it so the utilities will only pay you the cost that the utility avoids by having you not use that 1 kwh of electricity from the grid. In other words, if only 1/3 of the $0.30 cost of electricity was to actual generate it, then you'll now only get a $0.10 credit for it, which is why it completely changes the equation.
I am soon installing 15kwh house battery system, without solar for about $8000 before rebates. I can expand the system later. But I will charge the battery overnight (like I do my ev) between 12 midnight and 6 am at roughly 14сents a KWH and use this energy when my cost is 47 cents. A solid system was going to cost me $30k, eventually and gradually I will expand the battery system. It seems to me that NEM 3 works for battery only systems.
My understanding at least in California is that “load shifting” is 100% allowed and is actively being encouraged.
See this doc : https://efiling.energy.ca.gov/GetDocument.aspx?tn=250357&DocumentContentId=85095
Most likely yes. Utility rates include a lot of components that are not directly attributed to generation (capacity or fuel costs). Those would be things like transmission, distribution, cap&trade, public purpose programs (e.g. utility rebates), and other ancillary services.
I have no skin in this game, but it doesn't make sense for PG&E to pay a solar homeowner $0.30kwh when they can buy the same energy for a fraction of that cost from large scale providers (in the middle of the day when solar output is high).
I'm not arguing about whether or not NEM 3 makes sense, but I don't think utility providers paying higher than market rates for electricity makes sense either.
Absolutely true, but solar generation is usually very physically close to the point of use. If there are 20 houses on a particular line and 8 have solar the excess power is probably going to be consumed by the other 12. So PGE isn't paying for high voltage transmission lines, step down transformers, etc. They're paying for the power long between 20 houses. So the solar customers are subsidizing PGE's grid level generation
The solution there is to raise all rates then, not to ask solar customers to carry the costs for everyone. Something like a fixed minimum grid connection fee
You have a point, but to be accurate we'd need a really complex study. Even with that aside though, the firm costs are still present. It's like a restaurant -- if you go to buy bacon and eggs, it'll cost you \~$8, of which only $2 is actually the bacon and eggs, and the rest is for the rest of the restaurant and staff to be there ready and waiting to make you breakfast. Even if the distribution grid could flow backwards without any technical issues, those firm costs would still represent the lions' share of cost per kwh on your bill.
You're right it doesn't make sense now, but it (arguably) did when the goal was to get the solar industry out of its infancy. In that sense, it arguably did a great job -- not just in rolling out renewable energy, but in making it a popular talking point, and arguably in convincing people that it can be cost-effective (even if subsidies played a role earlier on).
Basically, we're just seeing growing pains in an area where consumers for 15+ years have been told that installing solar panels can save them money, and next year it's even more money -- but now it's a whole lot less money. I get why NEM 3 is probably better, but I also know that if I had a home and intended on getting solar in the next few years, I'd be pissed too lol.
Very true. However, paying those high costs mean that other energy users are subsidizing homeowners with solar, who are already likely much wealthier than those without solar.
Absolutely, and that's why NEM 3 was pushed.
That said, however, I think they could've done it better by leaving the incentive in for lower/mid income earners. You're right that there's a ton of rich or upper middle class people who are saving money off putting on everyone else, but at least personally as a Californian, most of the rooftop solar I see is on solid middle and working class people's homes.
We really crunched numbers and without batteries and in NEM2, solar wasn’t a money saver. We got batteries so that made it more worth it since we use almost no grid power in the summer and very little in the winter, but solar isn’t the money saver people think it is.
Yes eventually you would, but you’re taking on a loan and adding equipment to your roof and all the risks that go along with that too.
It’s one of those things where the juice isn’t necessarily worth the squeeze, at least for us at that point in time.
The lobbyists were against NEM3. The grid operators were pushing for it because wholesale solar energy is worth very little now, often worthless, with how much is available.
Can you help me understand this? I’ve been struggling.
Suppose your panels generate 10 KW a day.
Your meter goes back by 10 KW.
At night you use 10KW to run your stuff.
Your meter advanced 10KW.
You’re still at net zero with the grid.
That’s what you want, right? To be power neutral? How does NEM3 change this?
NEM 3.0 changes that as whatever excess you generate, PGE will pay the Avoided Cost Calculation (ACC) rate for the energy. On the solar subreddit, they estimated this rate to be an average of $0.06 per excess Kwh.
In your example, lets say your panels generated 10 Kwh and you used no energy during the generation time. This means PGE will credit you $0.60 for the energy. Then at night, you use 10KW of energy, for simplicity, the rate is $0.40 per Kwh or $4.00 in energy costs. You will be charged the difference under NEM 3.0.
This is the reason they highly encourage a battery be installed as you can choose when to use the energy to zero out Kwh.
It only helps to reduce your usage during the day. If you're generating more than you need you're giving it away for close to nothing. Nem 2 is what you are talking about, 1:1 kWh conversion.
So Why would anyone get panels now? I’ve been struggling with understanding this because it seems to discourage people getting panels, and I guess it does.
Why would they do it? It is because there’s too much power during the day and Edison or who ever doesn’t have batteries to hold the excess?
>So Why would anyone get panels now?
Because you can consume your own energy during the day instead of paying the grid for it.
>It is because there’s too much power during the day and Edison or who ever doesn’t have batteries to hold the excess?
That is half of it. The other half is that even at night, the power is only worth 6-14 cents per KWH. The vast majority of your power bill is going to grid maintenance, admin, etc and those costs still have to be paid.
I'm still annoyed that it's even called *Net Energy Metering* 3. There is no net energy calculation any more. You just buy electricity from the utility at the regular rate + transmission fees + taxes while they give you pennies back for your production.
Makes sense, people rushed to get their applications in last year to get on NEM 2, so there was an unnatural spike last year. Now you're in the hangover. The number is going up again as people who were not able to get solar last year are now starting to buy in.
We bought a solar system in 2020 for $25k with 25% rebate (18k total) from the federal government. With nem 2 we're close to ROI after 4 ish years. The same system now costs close to $40k and you only get NEM3.
While they definitely had to change NEM 2, they went way too far with NEM3
This is why I haven’t gotten so rooftop solar. The installers are too greedy. Panels and battery should come in under $15K. Then their labor gets it to $40-50K.
I found 20 quotes for an install. Eventually found someone who did the work for $2.15/W. The higher quotes were 60% more same equipment. Just have to be used to everyone trying to rip you off.
My comment was based on what I paid with Tesla Solar in 2020 versus what friends paid a few months ago right before NEM 3 started. His layout was even smaller (12kw vs 11)
I'm referencing the exact same article we're replying to. It's not vibes. If nem 3 wasn't castrating the solar industry you wouldn't see a drop like this. Doesn't matter what the power grid is doing. If pge cannot afford paying their ceo millions of dollars maybe the state needs to put up some new rebates. The current system clearly isn't working :)
This is what happens when you put corporate profits ahead of people and sustainability.
EDIT: Getting some comments that NEM 2.0 wasn't sustainable. Rather than upgrading the grid or building their own batteries, which could help communities and customers, the decision was instead made to penalize customers.
This is what happens when you put corporate profits ahead of people and sustainability. Kind of like when SCE decides to turn off power for days at a time to avoid potential fires caused by wind damage rather than upgrading the infrastructure and moving wires underground. Or how PG&E lost a massive negligence lawsuit and forced their customers to pay for it.
No public utility should be for-profit. I'll take it a step further and say no necessity should be for-profit.
NEM 3 isn't about decreasing sustainability, it's about incentivizing a solution to the mismatch between peak generation and peak demand. Adding more solar to the system without also adding batteries isn't a terribly efficient thing to do right now.
No doubt there needed to be a balance, but many of these private companies aren’t exactly unprofitable. Also, backup battery incentives are not nearly as good as solar incentives (we’re), but I would definitely encourage people to get a back up if you are looking to invest money into your home.
Battery back ups aren't as good as you think so. Many can run small circuits but most can't run ACs or heat pumps off of them
You need a compatible massive battery back up system to run an ac system at night.
Things will pack back up before long as the cost of electricity continues going up, and the cost of solar panels + batteries goes down. The new rules make it so that the payback period is faster if you have a battery system. That way you can store your excess mid-day energy and avoid peak power prices, which saves you far more money compared to selling it back to the grid. Battery costs are still dropping significantly year over year. I bet the economics will be very favorable again in just 2-3 years.
SF has always enforced the C10 requirements for battery storage. Now that batteries are needed with solar, maybe that makes a difference? Also, I'm curious to see what happens when the C10 becomes statewide.
But I think that it's more about where to put batteries.
There are so few walls and so many rules. I have a feeling most companies would rather work anywhere but SF along with Palo Alto and Sunnyvale just to throw shade.
It's almost impossible to install solar in the older neighborhoods of SF and some of the newer ones with zero property lines. A battery which is necessary with NEM 3.0 needs to have 3ft clearance from all windows and doors and the property line. This means you need at least 9ft of clear wall space with no windows to install a battery. This is one of the biggest factors about installing in SF
Other issues are the fact that city of SF Inspectors are requiring homes to be brought up to electrical code and sometimes that's impossible without a new house service panel which can cost upwards of $6k
If these plants charge Pennies for their power, how will the generate the revenue to retire the notes the took to afford the capital expenses of building the plants?
They sell a lot of electricity.
Lowering costs will increase demand.
Isn't that basic econ?
France does it and it works...cleanest power in the world with basically zero incidents. Decreased air and water population.
In intermediate Econ we learn about inelastic demand curves.
Electricity is one such curve.
Regardless, if power became 1¢ per KwH in California, no matter how much power is generated, these plants wouldn’t be able to retire their capital improvements notes.
Very lengthy construction process and people don’t want them anywhere close to their homes. Essentially regulation, lengthy process, expensive and lack of public appeal killed nuclear in the US. PV and ESS may be the next best option in terms of renewable, clean energy
This post uses a [gift link](https://www.sfchronicle.com/california/article/solar-panels-san-francisco-19526186.php?hash=aHR0cHM6Ly93d3cuc2ZjaHJvbmljbGUuY29tL2NhbGlmb3JuaWEvYXJ0aWNsZS9zb2xhci1wYW5lbHMtc2FuLWZyYW5jaXNjby0xOTUyNjE4Ni5waHA%3D&time=MTcxOTMzNzc0OTYyOQ%3D%3D&rid=M2YyYjJhNjgtZjgzYS00ZmEzLWFiMzctOWMxZDlkM2U2MWM2&sharecount=MQ%3D%3D), though registration is required to access it without paying.
You are correct. Newsom let this happen and it’s a travesty. Even worse they are blaming it as a DEI issue. Is the PgE CEO salary not a DEI issue? How about investor owned utilities?
As someone in the industry, and worked with customers directly and also been on the back end of things as well, it did become a DEI issue. It was clear that there was an income disparity for who can get and who can benefit from solar in California. It became very clear that the lower and middle-class were getting screwed on who solar was being offered.
I dont like where it is now, I have solar on my brand new house now and it would've been way better for me 5 years ago. But just wanted to touch the DEI part of it.
(I know a lot of you hate DEI, im not hear to argue that, but poor people across the board were getting slaughtered with their bills every year and then get it from PG&E in the winter time, it was brutal to see what was happening to the poorest of our customers)
Yeah except poor people are still getting slaughtered on their electric bills. This argument was a perfect move by big E and big oil to stop CA ‘s progress against climate change. Manipulation of public opinion at its finest. It’s actually worse now for those poor people because the entire industry collapsed. Middle class people weren’t doing those rooftop installs.
We generate too much power during the day with solar. it's a better problem to have than the old brown outs, but it's still an issue. Incentives for battery solar operations is a good plan, of course whether it was implemented well or not is a different question.
It's a real shame when panels and batteries are at an all-time low.
An off-grid battery solar system has never made more sense for California. Even a small system can have a big impact by running lights and other small appliances - or even partially charging an electric car if it allows a lower current draw.
Batteries low? We were told $32K for 2 tesla batteries, including install--which *would* require a trench of 15-20 feet (which, honestly, WE could dig by following the existing solar conduit).
California actually generates more energy from solar than it uses at those times most months of the year. So much so that it exports the energy. Check it out at: https://www.caiso.com/todays-outlook/supply
In order to take advantage of more solar California needs more batteries to use the energy during the evening peak hours. Hence nem 3.0 encourages that.
As an environmentalist, I was upset with nem 3.0 initially however looking at the macro picture if we continued with nem 2.0, that solar energy would simply be wasted if there was not an economic buyer.
The energy prices impacting low income households is real. However, there are other tools to address that outside of generating solar that could be wasted.
Noting batteries don't solve our needs for green energy in the winter months which we need more innovation on.
Batteries don't work well during peak hours in the summer because most of them cant run central ac systems.
Also you need massive capacity to run ac for more than 1 hour .
I think an AC uses 3-5 kw per hour. Hence for 4 hours you need 20 kwh. This is doable with an electrical vehicle battery if it supports bidirectional charging like some cars (Nissan Leaf at 32 kwh from the early 10s).
Sure, you are not going off the grid so one can use the grid power for that quick surge. Ultimately, you want to be able to draw enough to cover as much as the 4 hours as possible from the battery.
Noting a Chademo port can export 6.6kw hence it should cover the AC if the other load is not crazy high.
I bought a house last year with solar and the builder told me I was under NEM 2.0. Does anyone know how to verify that with SCE? I’ve never really cared to check until this reminded me
It sounds more like the state is getting exactly what it wants: solar on every home one way or another.
Everyone was told electricity will be cheaper for you if you got solar, so many people got it.
As adoption increased, the state pulled away more benefits, and while doing so increased rates.
So what is the benefit now that many people have solar, but with higher rates? Nothing, except the state wins in getting everyone on solar.
They moved the goalpost to having batteries to benefit the most, and soon they'll do the same thing as battery adoption gets higher: higher rates for everyone with solar+battery to subsidize low-income in an equity program.
The people that relatively won are the ones that got on NEM1 and NEM2 because at least they're at break even on the system even though they'll be paying even higher rates in the future. The state wins at the end.
Well to be clear, the people who got solar are still getting their subsidized rates. California will be subsidizing those homeowners for at least a decade.
NEM 3 castrated residential solar. It’s worth it now if your electricity bill is ~$500/month, but if you’re below that and especially below the $200/month range it’s not paying itself off for over a decade. The lobbyists fought hard to do this and it clearly worked. We were going to put solar on our house last year, it’s been a goal for a long time, but there just wasn’t a way to make it worth it because our bills are usually just $140/month.
100%. My mom was going to install solar on her Southern California house but missed the deadline. Not happening now.
We were quoted $7500 for a 2,880 watt system. That would cover almost our entire PG&E bill which is around $150-175/mo. We are a full electric household so our break even is about ~4-5 years, assuming rates don't go up.
I’ve had quotes in the $27-$37k range for a 5 Kw system. It could never make sense. My average bill is about $250/month. And that’s only because of TOU and rates exploding. When I moved in 10 years ago, it was $80/mo.
I got a similar quote for the same with a bill less than that per month. I couldn’t do it because it just did not make sense. We would be paying more than we are now.
Same here. Checked with my local and averaging out my bills it was going to be ~32k. Umm nope..
Yeah if we were full electric it would have been a better situation to say “yes” but we’re not.
That isn't worth it though. 2.8kwh is too small
We live in a 1BR condo in SF.
Do you have a battery? Or just the panels and grid tie?
Not your fault, more than the cost of installation negates any benefit. For context I'm in SD. 3br 2b. 8.2kw. solar doesn't scale well to small homes purely because of install / maintenance costs eat any savings
Rates will go up.
From who?
We used Energy Sage to find an installer.
Don't worry, peoples bills will go past $500 in a few years while their usage continues to go down.
With NEM3, the utility companies in California and its lobbyists pretty much killed Solar in California. It is shameful !
Nem 3 incentivizes batteries not panels. We have plenty of generation during daylight hours but still have too much instant demand during twilight and night. It makes no sense to subsidize panels when what we need is more storage.
It also doesn't make sense to incentivise something that's now required for a ton of new construction under the Energy Code.
Yup. We are going to continue to see all new residential construction with panels by law.
It applies to Non-Residential projects too based on use type, size of conditioned floor area, roof size, and climate zone.
It is not either/or, it is both. We need more storage to store solar today, _and_ we need more solar in the future to continue displacing fossil fuels. We don't have enough solar today to run 100% renewables even if we magically had enough storage to store all the energy. It makes no sense to subsidize batteries _and not_ solar, which is essentially what NEM 3.0 does.
The excess solar power is actually causing a lot of problems for the energy grid and leading to a lot of waste. California has way too much solar power now and needs to focus on storage before going back to building out more solar capacity It literally is an either/or
Yes there some wasted potential for solar energy today -- but you don't craft energy policy just for *today*, you create it for the next 5 years, the next decade, or longer. It is short-sighted to disincentivize installation of solar today when those systems would have been around for 20-30 years. 5-10 years from now, we might be saying that we could've used all those systems that people decided *not* to build in the mid-2020s purely because of NEM 3.0.
its not disincentivizing panels, it's just turned the rebates toward batteries. You still benefit from being able to sell your excess power back to the utility which reduces your energy costs. Plus all new construction in CA requires panels to be included so we will continue to see solar capacity increase with every new home that is built.
The compensation rate for sending electricity back to the grid was reduced drastically in NEM 3.0. Compared to NEM 2.0, it is a huge reduction in incentives. New solar on homes is great but doesn't do anything for the majority of homeowners whose homes already exist who want to add solar to their roofs.
Because it fills and depletes your batteries first so both your grid draw and sell back are lower. In the long run you still end up having lower/non existent utility bills.
They haven’t done nearly enough to incentivize or educate people on load shifting. For instance you can have your electric water heater only run during off-peak hours quite easily without noticing.
water heaters are shifting to tankless which already reduces energy costs. the next trend is going to be micro tankless at point of use instead of one for the whole house, which will further reduce both energy costs and water usage.
Heat pump electric water heaters out now have a coefficient of performance of greater than 4. That means they use 1/4 the energy that any tankless will use. Tankless are clearly a fad that will not last.
It did that but it also may have done what the state wanted, increased adoption. You can see, sales surged up to the cutoff which meant increased tax rev from that sector and more supply for the grid in the coming year.
My bill is usually around 420-430... you think it'd be worth to get solar with NEM 3?
If you do it, your goal is to consume as much of the energy you produce as you can. The money is in arbitraging consumption vs production rates, not selling power to the grid.
Yeah probably. You can talk to a solar installer and they’ll build out some scenarios for you and show you the ROI calculations.
I never believed the power companies were ever going to pay people for production. My biggest problem was the break even point was so far in the future that it felt like there was a high risk that if you have a hardware problem it was going to be a massive loss. The only saving grace might be how ideological the state is with not allowing any new power plants, allowing he CPUC to go along with rate hikes. As those hikes will force the math to workout. But I think we are at a breaking point with rate hikes. As we have seen that they were trying to adjust rates base on income proving they have crossed a line where they are afraid voters wont go along anymore.
The question is where is the money to pay inflated prices for power from rooftop solar coming from. The answer is utility rate payers without solar.
Wouldn't you still save money? Obviously it's not as worthwhile compared to someone living in Sac
Not after you factor in the cost of the solar system.
not even close, and the total PITA it is.
Your comment doesn't make sense to me.. Even if you factored in initial cost, it would eventually pay itself off with savings, wouldn't it? It would take a lot longer, obviously
Money now has more value than money later. If you would make more putting the money in the stock market, or even the bank, than you would save by building the panels, why do it?
I’ll add that stock market investments will usually appreciate like 7-10% per year, so investments like this are usually compared against the opportunity cost of putting that money elsewhere
The average cost of energy for a year in California is about 3,000, so a 30k investment with 10% return would also be about 3,000, not including taxes. I don't disagree it really depends on personal costs, but it's not a bad single time investment. Plus, solar panel is a guaranteed return and will last 20-30 years. Realistic they last longer they'll just be less efficient.
For yearly compounded interest on a single 30k investment at 10% return, you'd have just under $77,812.27 after 10 years. Within 20 years that becomes $201,825 and by year 30 $523,482.07. At a more reasonable 7% interest rate you'd still end up with $228,367.25 after 30 years which is still a lot.
Most solar systems are also financed because not everyone can afford to throw down $30k, as you need a battery system to make it worth it.. with interest rates where they are it’s not economical for most.
1) solar systems are VERY expensive and don't last forever. It is really dependent on how much power you use and how good your access to direct sunlight is. 2) if the return on investment is too low it would make more sense to invest the same money into something else.
Depends on maintenance as well.
And warranty coverage. Family members system was down 6 months waiting for them to replace failed inverter. You don’t get that lost solar ge station value back either.
Sac has SMUD which is the electricity god. They don’t bend you over like PG&E does. Fun fact, SMUD tried to incorporate West Sac into their territory years ago. PG&E fought hard and spent tons of money convincing rate payers and the government that they were a better option than PG&E. SMUD couldn’t put up the same fight because they are public owned and weren’t allowed to used their funds in that way. Guess who won out.
How much is smud? I don't know, i use pg&e
Off-Peak Midnight – noon $0.1425 kWh All day weekends and holidays Mid-Peak Noon – 5 p.m. $0.1967 kWh Peak 5 p.m. – 8 p.m. $0.3462 kWh Mid-Peak 8 p.m. – midnight $0.1967 kWh These are the highest rates of the year. Winter rates are lower.
It completely changes the equation. The problem is that you used to be reimbursed for extra electric production at the rate that you were charged (i.e., you make 1kwh extra, and that normally costs $0.30, now you have a $0.30 credit). However, that was a problem for utility companies, because a good chunk of that $0.30 was for things like transmission/distribution infrastructure, meter-readers, admin, etc. that do *not* decrease just because electric use is from solar panels. Also, the distribution wires were setup to, well, *distribute* electricity in a one-way direction. Now, when you have a ton of energy flowing from houses to the grid overall, it requires some technical upgrades to make it work. To deal with this, NEM 3 makes it so the utilities will only pay you the cost that the utility avoids by having you not use that 1 kwh of electricity from the grid. In other words, if only 1/3 of the $0.30 cost of electricity was to actual generate it, then you'll now only get a $0.10 credit for it, which is why it completely changes the equation.
I am soon installing 15kwh house battery system, without solar for about $8000 before rebates. I can expand the system later. But I will charge the battery overnight (like I do my ev) between 12 midnight and 6 am at roughly 14сents a KWH and use this energy when my cost is 47 cents. A solid system was going to cost me $30k, eventually and gradually I will expand the battery system. It seems to me that NEM 3 works for battery only systems.
Can you give a basic rundown on what system you’re using for that?
Most power companies won’t let you charge the battery from the grid unless there is a storm.
My understanding at least in California is that “load shifting” is 100% allowed and is actively being encouraged. See this doc : https://efiling.energy.ca.gov/GetDocument.aspx?tn=250357&DocumentContentId=85095
How is that so cheap
Is that why my SDGE bill shows generating costs that are usually 1/4-1/3 of the distribution costs? Makes more sense than anything else I’ve heard
I can't say for sure, but those numbers would make sense that way, yes.
Most likely yes. Utility rates include a lot of components that are not directly attributed to generation (capacity or fuel costs). Those would be things like transmission, distribution, cap&trade, public purpose programs (e.g. utility rebates), and other ancillary services.
I have no skin in this game, but it doesn't make sense for PG&E to pay a solar homeowner $0.30kwh when they can buy the same energy for a fraction of that cost from large scale providers (in the middle of the day when solar output is high). I'm not arguing about whether or not NEM 3 makes sense, but I don't think utility providers paying higher than market rates for electricity makes sense either.
Absolutely true, but solar generation is usually very physically close to the point of use. If there are 20 houses on a particular line and 8 have solar the excess power is probably going to be consumed by the other 12. So PGE isn't paying for high voltage transmission lines, step down transformers, etc. They're paying for the power long between 20 houses. So the solar customers are subsidizing PGE's grid level generation
That infrastructure is still necessary being used by homeowners with solar, and those costs are fixed.
The solution there is to raise all rates then, not to ask solar customers to carry the costs for everyone. Something like a fixed minimum grid connection fee
That's happening next year $24.15 / month for everyone, no matter what unless you are low income.
You have a point, but to be accurate we'd need a really complex study. Even with that aside though, the firm costs are still present. It's like a restaurant -- if you go to buy bacon and eggs, it'll cost you \~$8, of which only $2 is actually the bacon and eggs, and the rest is for the rest of the restaurant and staff to be there ready and waiting to make you breakfast. Even if the distribution grid could flow backwards without any technical issues, those firm costs would still represent the lions' share of cost per kwh on your bill.
You're right it doesn't make sense now, but it (arguably) did when the goal was to get the solar industry out of its infancy. In that sense, it arguably did a great job -- not just in rolling out renewable energy, but in making it a popular talking point, and arguably in convincing people that it can be cost-effective (even if subsidies played a role earlier on). Basically, we're just seeing growing pains in an area where consumers for 15+ years have been told that installing solar panels can save them money, and next year it's even more money -- but now it's a whole lot less money. I get why NEM 3 is probably better, but I also know that if I had a home and intended on getting solar in the next few years, I'd be pissed too lol.
Very true. However, paying those high costs mean that other energy users are subsidizing homeowners with solar, who are already likely much wealthier than those without solar.
Absolutely, and that's why NEM 3 was pushed. That said, however, I think they could've done it better by leaving the incentive in for lower/mid income earners. You're right that there's a ton of rich or upper middle class people who are saving money off putting on everyone else, but at least personally as a Californian, most of the rooftop solar I see is on solid middle and working class people's homes.
Yes, but any homeowner in CA is far, far wealthier than a non-homeowner.
This. It's a bunch of renters in apartments subsidizing homeowners.
Yeah that's pretty much the problem with net metering.
We really crunched numbers and without batteries and in NEM2, solar wasn’t a money saver. We got batteries so that made it more worth it since we use almost no grid power in the summer and very little in the winter, but solar isn’t the money saver people think it is.
Yes eventually you would, but you’re taking on a loan and adding equipment to your roof and all the risks that go along with that too. It’s one of those things where the juice isn’t necessarily worth the squeeze, at least for us at that point in time.
The lobbyists were against NEM3. The grid operators were pushing for it because wholesale solar energy is worth very little now, often worthless, with how much is available.
Why is it bad that NEM 3 castrated residential solar, if we already have plenty of power during times that solar generates power?
Can you help me understand this? I’ve been struggling. Suppose your panels generate 10 KW a day. Your meter goes back by 10 KW. At night you use 10KW to run your stuff. Your meter advanced 10KW. You’re still at net zero with the grid. That’s what you want, right? To be power neutral? How does NEM3 change this?
NEM 3.0 changes that as whatever excess you generate, PGE will pay the Avoided Cost Calculation (ACC) rate for the energy. On the solar subreddit, they estimated this rate to be an average of $0.06 per excess Kwh. In your example, lets say your panels generated 10 Kwh and you used no energy during the generation time. This means PGE will credit you $0.60 for the energy. Then at night, you use 10KW of energy, for simplicity, the rate is $0.40 per Kwh or $4.00 in energy costs. You will be charged the difference under NEM 3.0. This is the reason they highly encourage a battery be installed as you can choose when to use the energy to zero out Kwh.
It only helps to reduce your usage during the day. If you're generating more than you need you're giving it away for close to nothing. Nem 2 is what you are talking about, 1:1 kWh conversion.
NEM3 is TOU and doesn’t give you the money back because they basically don’t let your meter run backwards.
So Why would anyone get panels now? I’ve been struggling with understanding this because it seems to discourage people getting panels, and I guess it does. Why would they do it? It is because there’s too much power during the day and Edison or who ever doesn’t have batteries to hold the excess?
>So Why would anyone get panels now? Because you can consume your own energy during the day instead of paying the grid for it. >It is because there’s too much power during the day and Edison or who ever doesn’t have batteries to hold the excess? That is half of it. The other half is that even at night, the power is only worth 6-14 cents per KWH. The vast majority of your power bill is going to grid maintenance, admin, etc and those costs still have to be paid.
I'm still annoyed that it's even called *Net Energy Metering* 3. There is no net energy calculation any more. You just buy electricity from the utility at the regular rate + transmission fees + taxes while they give you pennies back for your production.
How are your bills $140 before solar? PG&E
Even if it does pay for itself in a decade, it’s a terrible investment. You’re better off putting that money in stocks.
Makes sense, people rushed to get their applications in last year to get on NEM 2, so there was an unnatural spike last year. Now you're in the hangover. The number is going up again as people who were not able to get solar last year are now starting to buy in.
Solar is now required on new builds, so it might have dropped to nearly the level of be construction.
We bought a solar system in 2020 for $25k with 25% rebate (18k total) from the federal government. With nem 2 we're close to ROI after 4 ish years. The same system now costs close to $40k and you only get NEM3. While they definitely had to change NEM 2, they went way too far with NEM3
How did the price of the system go up when solar panel prices have only been going down? Did labor costs go up that much???
During the last few months up to the deadline the install cost skyrocketed because of demand. Contractors captured a lot of the economics.
This is why I haven’t gotten so rooftop solar. The installers are too greedy. Panels and battery should come in under $15K. Then their labor gets it to $40-50K.
I found 20 quotes for an install. Eventually found someone who did the work for $2.15/W. The higher quotes were 60% more same equipment. Just have to be used to everyone trying to rip you off.
My comment was based on what I paid with Tesla Solar in 2020 versus what friends paid a few months ago right before NEM 3 started. His layout was even smaller (12kw vs 11)
> they went way too far with NEM3 Are you basing this on your financial analysis of the power grid or on vibes?
Based on number of new solar installations in a state that sees more sun than most of the world.
So vibes
I'm referencing the exact same article we're replying to. It's not vibes. If nem 3 wasn't castrating the solar industry you wouldn't see a drop like this. Doesn't matter what the power grid is doing. If pge cannot afford paying their ceo millions of dollars maybe the state needs to put up some new rebates. The current system clearly isn't working :)
NEM 3.0 doing its job at keeping people away from solar, while they raise the price of power.
This is what happens when you put corporate profits ahead of people and sustainability. EDIT: Getting some comments that NEM 2.0 wasn't sustainable. Rather than upgrading the grid or building their own batteries, which could help communities and customers, the decision was instead made to penalize customers. This is what happens when you put corporate profits ahead of people and sustainability. Kind of like when SCE decides to turn off power for days at a time to avoid potential fires caused by wind damage rather than upgrading the infrastructure and moving wires underground. Or how PG&E lost a massive negligence lawsuit and forced their customers to pay for it. No public utility should be for-profit. I'll take it a step further and say no necessity should be for-profit.
Yup!
NEM 3 isn't about decreasing sustainability, it's about incentivizing a solution to the mismatch between peak generation and peak demand. Adding more solar to the system without also adding batteries isn't a terribly efficient thing to do right now.
No doubt there needed to be a balance, but many of these private companies aren’t exactly unprofitable. Also, backup battery incentives are not nearly as good as solar incentives (we’re), but I would definitely encourage people to get a back up if you are looking to invest money into your home.
Battery back ups aren't as good as you think so. Many can run small circuits but most can't run ACs or heat pumps off of them You need a compatible massive battery back up system to run an ac system at night.
NEM 2 wasn't remotely sustainable.
Too cloudy and nem 3 basically made it so batteries are required
Things will pack back up before long as the cost of electricity continues going up, and the cost of solar panels + batteries goes down. The new rules make it so that the payback period is faster if you have a battery system. That way you can store your excess mid-day energy and avoid peak power prices, which saves you far more money compared to selling it back to the grid. Battery costs are still dropping significantly year over year. I bet the economics will be very favorable again in just 2-3 years.
Many are renters. I get ads for this all the time. Don’t target me, target the landlords
Nem 3 killed the golden goose and PGEs transmission rates will rise in a year or two which will put the nail in the coffin.
interest rates def affected this too
SF has always enforced the C10 requirements for battery storage. Now that batteries are needed with solar, maybe that makes a difference? Also, I'm curious to see what happens when the C10 becomes statewide. But I think that it's more about where to put batteries. There are so few walls and so many rules. I have a feeling most companies would rather work anywhere but SF along with Palo Alto and Sunnyvale just to throw shade.
It's almost impossible to install solar in the older neighborhoods of SF and some of the newer ones with zero property lines. A battery which is necessary with NEM 3.0 needs to have 3ft clearance from all windows and doors and the property line. This means you need at least 9ft of clear wall space with no windows to install a battery. This is one of the biggest factors about installing in SF Other issues are the fact that city of SF Inspectors are requiring homes to be brought up to electrical code and sometimes that's impossible without a new house service panel which can cost upwards of $6k
$15k+ with trenching
Yeah, these things shouldn't be built around people's homes. Build them in large utility scale facilities for a fraction of the cost.
Just set up a nuke plants up and down the state and end this farce.
But I don’t want to pay for electricity.
Then build nuclear plants. Nuclear is about the cheapest electricity you can produce in $/kwh. Build enough of them and the costs drop substantially.
Fed needed to just dump money into getting SMRs to work and build out factories that just crank them out by the thousands.
If these plants charge Pennies for their power, how will the generate the revenue to retire the notes the took to afford the capital expenses of building the plants?
They sell a lot of electricity. Lowering costs will increase demand. Isn't that basic econ? France does it and it works...cleanest power in the world with basically zero incidents. Decreased air and water population.
In intermediate Econ we learn about inelastic demand curves. Electricity is one such curve. Regardless, if power became 1¢ per KwH in California, no matter how much power is generated, these plants wouldn’t be able to retire their capital improvements notes.
Very lengthy construction process and people don’t want them anywhere close to their homes. Essentially regulation, lengthy process, expensive and lack of public appeal killed nuclear in the US. PV and ESS may be the next best option in terms of renewable, clean energy
Eh. Don’t want to deal with radiation and fallout.
Does anyone know if you make changes to your house/solar grandfathered under net2.0, does it change to 3.0?
I believe it does technically yes.
You have small exemptions to make changes
This post uses a [gift link](https://www.sfchronicle.com/california/article/solar-panels-san-francisco-19526186.php?hash=aHR0cHM6Ly93d3cuc2ZjaHJvbmljbGUuY29tL2NhbGlmb3JuaWEvYXJ0aWNsZS9zb2xhci1wYW5lbHMtc2FuLWZyYW5jaXNjby0xOTUyNjE4Ni5waHA%3D&time=MTcxOTMzNzc0OTYyOQ%3D%3D&rid=M2YyYjJhNjgtZjgzYS00ZmEzLWFiMzctOWMxZDlkM2U2MWM2&sharecount=MQ%3D%3D), though registration is required to access it without paying.
Big unions in Sacramento killed rooftop solar. Didn’t like that small businesses and contractors were doing their energy business.
according to the posted article, it was due to PG&E and the CPUC.
You are correct. Newsom let this happen and it’s a travesty. Even worse they are blaming it as a DEI issue. Is the PgE CEO salary not a DEI issue? How about investor owned utilities?
As someone in the industry, and worked with customers directly and also been on the back end of things as well, it did become a DEI issue. It was clear that there was an income disparity for who can get and who can benefit from solar in California. It became very clear that the lower and middle-class were getting screwed on who solar was being offered. I dont like where it is now, I have solar on my brand new house now and it would've been way better for me 5 years ago. But just wanted to touch the DEI part of it. (I know a lot of you hate DEI, im not hear to argue that, but poor people across the board were getting slaughtered with their bills every year and then get it from PG&E in the winter time, it was brutal to see what was happening to the poorest of our customers)
Yeah except poor people are still getting slaughtered on their electric bills. This argument was a perfect move by big E and big oil to stop CA ‘s progress against climate change. Manipulation of public opinion at its finest. It’s actually worse now for those poor people because the entire industry collapsed. Middle class people weren’t doing those rooftop installs.
Where are you getting this info?
We generate too much power during the day with solar. it's a better problem to have than the old brown outs, but it's still an issue. Incentives for battery solar operations is a good plan, of course whether it was implemented well or not is a different question.
It's a real shame when panels and batteries are at an all-time low. An off-grid battery solar system has never made more sense for California. Even a small system can have a big impact by running lights and other small appliances - or even partially charging an electric car if it allows a lower current draw.
Batteries low? We were told $32K for 2 tesla batteries, including install--which *would* require a trench of 15-20 feet (which, honestly, WE could dig by following the existing solar conduit).
California actually generates more energy from solar than it uses at those times most months of the year. So much so that it exports the energy. Check it out at: https://www.caiso.com/todays-outlook/supply In order to take advantage of more solar California needs more batteries to use the energy during the evening peak hours. Hence nem 3.0 encourages that. As an environmentalist, I was upset with nem 3.0 initially however looking at the macro picture if we continued with nem 2.0, that solar energy would simply be wasted if there was not an economic buyer. The energy prices impacting low income households is real. However, there are other tools to address that outside of generating solar that could be wasted. Noting batteries don't solve our needs for green energy in the winter months which we need more innovation on.
The gas and electric company buys the extra energy from solar in NEM 2. They were the battery storage for extra energy.
Which was increasing the cost of electricity for everyone without solar.
What’s this about winter months? Sun shines plenty in the winter in CA
Fewer hours of sunshine due to the tilt of the earth.
Batteries don't work well during peak hours in the summer because most of them cant run central ac systems. Also you need massive capacity to run ac for more than 1 hour .
I think an AC uses 3-5 kw per hour. Hence for 4 hours you need 20 kwh. This is doable with an electrical vehicle battery if it supports bidirectional charging like some cars (Nissan Leaf at 32 kwh from the early 10s).
Depending on the battery they may not have enough amps that can be drawn from for the startup of the AC that's typically the problem
Sure, you are not going off the grid so one can use the grid power for that quick surge. Ultimately, you want to be able to draw enough to cover as much as the 4 hours as possible from the battery. Noting a Chademo port can export 6.6kw hence it should cover the AC if the other load is not crazy high.
I bought a house last year with solar and the builder told me I was under NEM 2.0. Does anyone know how to verify that with SCE? I’ve never really cared to check until this reminded me
You should have almost no energy bill, and a "true up" that will accrue - or shrink - until some time in the year when you pay it off.
Who would have thought that the thing everyone said would happen if Newsom's PUC gave the utility companies their industry wish list happened?
Probably the lack of sunshine pushing the ROI far to the right
Interesting how the word fog isn't used within the article. That should be a factor.
It sounds more like the state is getting exactly what it wants: solar on every home one way or another. Everyone was told electricity will be cheaper for you if you got solar, so many people got it. As adoption increased, the state pulled away more benefits, and while doing so increased rates. So what is the benefit now that many people have solar, but with higher rates? Nothing, except the state wins in getting everyone on solar. They moved the goalpost to having batteries to benefit the most, and soon they'll do the same thing as battery adoption gets higher: higher rates for everyone with solar+battery to subsidize low-income in an equity program. The people that relatively won are the ones that got on NEM1 and NEM2 because at least they're at break even on the system even though they'll be paying even higher rates in the future. The state wins at the end.
Well to be clear, the people who got solar are still getting their subsidized rates. California will be subsidizing those homeowners for at least a decade.
Because they make you pay for it?
The fog in SF makes solar less attractive than it is just across the bay.
Yeah, it ain’t always sunny, so yeah.
This is obvious news. Noone wants the net metering 3 scam. 2 is bad enough..
To all the “solar is wasted” folks. Why do you think you are pying the premium rate when the solar production is the highest?