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California Net Surplus Generation Rate is Set

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.