On Thursday, June 24, the California Public Utilities Commission (CPUC) is slated to vote to approve an updated version of the “Avoided Cost Calculator” that deeply undercuts the value of rooftop solar, according to the advocacy group Save California Solar.
The Avoided Cost Calculator (ACC) is a model developed by E3, a consulting firm regularly used by utilities to put out research products biased against distributed energy generation, that is also under contract with the CPUC. The ACC measures utility avoided costs from customer solar — how much utility costs go down for every MW of distributed solar that is installed. It is the state’s official “value of solar” calculator. The ACC is updated each year, and when the updates are major there is supposed to be an extensive public review process to make sure the changes are right.
This year, E3 and CPUC included major revisions that cut the value of rooftop solar in the 2021 calculator by about one-third the value in the 2020 version.
There are two major assumptions driving that reduction.
First, the calculator has an additional 30 GW of utility-scale solar and storage going online by 2025. The average utility scale project takes about 6 years to complete. Rooftop solar is essentially crowded out by these new resources and its value is measured to be lower. The idea of 30 GW of utility-scale solar and storage being installed over the next four years is wildly out of step with reality. It is simply not possible to move that many major projects that fast. Indeed, in the four year period between 2017 and 2020, just 6.4 GW of utility scale solar was installed.
Second, the calculator uses an entirely new and untested model for predicting how wholesale energy pricing will behave in the future. CPUC cannot start using this new model to set rates, including net-metering values, without thoroughly vetting it with a wide range of stakeholders.
These numbers and biased calculations are contained in CPUC Draft Resolution 5150, which is slated for a vote by the Commissioners on June 24.
Solar advocates are strongly opposed to these changes and are urging the CPUC to pull back the resolution and eliminate the extreme updates that undermine the growth of rooftop solar.
Rooftop solar remains extremely popular in California, with voters overwhelmingly opposed to changes that would halt the expansion of solar in working and middle class neighborhoods, taking California back to a time when solar was only affordable to wealthy households. Rooftop solar with net metering support is also key to the California Energy Commission’s joint agency “road map” to get California to 100% clean energy and the least expensive way to do it. Efforts to undermine rooftop solar through ACC updates or in the CPUC’s upcoming changes to net metering are out of step with California’s goals and values.
News item from Save California Solar
I see where they’re solely interested in the investor side of this not the public interest or the so stated alleged goals of the state “mouths” on clean energy. Blah, blah, blah. What’s new? Politicians who regularly kiss where I would not because there’s profit to be made off the backs of rate payers. I’ve seen the duck curve where, when statewide solar comes online, it bites into the fat cat’s profits.
“These numbers and biased calculations are contained in CPUC Draft Resolution 5150, which is slated for a vote by the Commissioners on June 24.”
Interesting, public code 5150 is the call out to law enforcement, they are dealing with a mentally unstable individual.
” Second, the calculator uses an entirely new and untested model for predicting how wholesale energy pricing will behave in the future. CPUC cannot start using this new model to set rates, including net-metering values, without thoroughly vetting it with a wide range of stakeholders.”
First off trying to “meld” wholesale energy and retail energy is insane (5150) particularly when taking into account California’s three major IOU utilities that have their own block tiered rate electricity pricing schemes. Overall, the electricity rates are stepping in usage blocks and start at a low of around $0.16/kWh and step up to a maximum of $0.32/kWh and some users will hit every one of these tiers every day. Then there’s after solar PV peak generation and from roughly 4 PM to 9 PM everyday another TOU rate spiking time period. Depending on wholesale electricity rates to ‘calculate’ the utility’s avoided costs is again (5150). The reality IS, when my solar PV array pushes excess electricity back onto the grid. This electricity will go through the copper wires at my house circuit breaker panel and into one of my neighbors who don’t have excess solar PV on their roofs. All of these transformer losses coming from the centralized generation plant to the ratepayer have “avoided costs” and higher energy efficiency over the grid inefficiencies and losses, when a distributed energy generation resource is helping to supply power to a grid locally. One of two things need to happen, the Utility needs to trap this data and apply it to the homeowners without solar PV, these folks don’t need to be paying ‘fuel’ charges, TD&D charges and TOU charges for energy that is provided locally.
Basically in California right now, the (average) price for electricity every month is from $0.20kWh to $0.25/kWh and an affiliate of the CPUC has predicted between 2025 and 2030 the average electricity rate in California will be around $0.30/kWh to $0.35/kWh.
“This year, E3 and CPUC included major revisions that cut the value of rooftop solar in the 2021 calculator by about one-third the value in the 2020 version.”
Where was this particular “sweet spot” before? This is just a thinly veiled attempt to push folks with already established and signed PPAs out of net metering and into net billing using wholesale electricity rates which does a real good job of erasing the energy credits being received for excess electricity being pushed back onto the grid. The utility’s goal is all excess energy delivered will be based on wholesale electricity which is from 3 to 5 cents/kWh, then turn around and charge 2/3rds this cost back to the solar PV adopter. That’s not avoided costs accounting, it is thievery to the wholesale degree.
What do you mean undermine rooftop solar?
What will this do to monthly solar cost?
Can you explain why this is not a good ides