AB 920 requires California utilities to pay owners for surplus solar (or wind) electricity generation.
Next: Eliminate the size to load limitation in the net metering law.
Quivira Vineyards, a small, family owned winery, is an example of a business that will benefit from AB 920.
|From Quivira Vineyards 55 kW DC Solar Array|
On October 11, 2009, I was tracking the progress of the SB 32 (Negrete McLeod) Feed-in Tariff bill in California and knew it was the last day for Governor Schwarzenegger to sign bills passed by the Legislature into law. I was surprised to learn the “Governor Signs Two Big Solar Bills”, both AB 920 and SB 32. I had been tracking AB 920 earlier in the year and was disappointed when AB 920 was neglected at the SolarTech / CALSEIA Summit.
Before AB 920, net metering customers could only drive their electric bills to zero and not negative or a payable credit balance for electricity generation in excess of their usage. Hence, utilities obtained the excess electricity for free and even charge zero balance net metering customers an administrative fee.
Per “New Law Requires Utilities to Pay Consumers for their Excess Power”, AB 920 sponsor Assemblymember Jared Huffman (D-San Rafael) said:
However, if a customer pursues other measures to reduce energy consumption – invests in energy efficient appliances, upgrades insulation, and weatherizes their home – the result is that their system generates more electricity than they use on an annual basis. That surplus energy goes back into the grid and the customer is not compensated. AB 920 simply requires the utility to compensate the customer for that excess electricity.
The bill applies to anyone who owns a small solar or wind generation system on their property to offset their energy needs, which as Huffman points out, is an increasingly diverse group. “This bill applies to individual homeowners, as well as small businesses, farms, wineries, schools and even affordable housing developments,” said Huffman.
CPUC to set the net surplus electricity rate
Page seventeen (17) of the twenty (20) page AB 920 Chaptered Bill (376) states:
The ratemaking authority shall, by January 1, 2011, establish a net surplus electricity compensation valuation to compensate the net surplus customer-generator for the value of net surplus electricity generated by the net surplus customer-generator.
AB 920 establishes the general criteria for the CPUC (California Public Utilities Commission) to value the net surplus electricity compensation (rate paid by utilities) including:
- The value of the electricity itself.
- The value of the renewable attributes of the electricity.
However, the conservative expectation is the CPUC will set a low wholesale rate ignoring the renewable benefits and time of generation value of the solar electricity.
Why would the CPUC undervalue the excess solar electricity this way?
First, the CPUC is concerned about the impact on other ratepayers. AB 920 guides the CPUC with the following nebulous language:
The net surplus electricity compensation valuation shall be established so as to provide the net surplus customer-generator just and reasonable compensation for the value of net surplus electricity, while leaving other ratepayers unaffected.
My only interpretation is utilities must absorb the cost without passing it along to ratepayers. This must be California.
Second, the CPUC and many PV advocates resent installations generating excess electricity since the systems violate the size to load limitation. Since these photovoltaic (PV) systems were purchased under the California Solar Initiative (CSI) program or prior rebate programs, owners are viewed as double dipping when paid for excess electricity production. Profit and accelerated ROI (Return On Investment) are considered obscenities when uttered by PV system owners. Of course, changes in home ownership, family size, and increased energy efficiency are mundane reasons for reductions in electricity consumption.
Eliminate the Size to load limitation
The original version of AB 920 eliminated the requirement that a “solar system should be sized to produce no more than their expected annual electricity needs.” However, legislative compromise forced the removal of the language.
Utility scale solar proponents disparage distributed residential and commercial PV installations as too expensive. Placing artificial limits on small PV systems increases the installed price per Watt because the transaction cost is almost fixed whether the system capacity is 2 kW (kiloWatt) or 10 kW in size. In California, I have observed many odd looking solar installations with a few modules on an otherwise empty roof. Roof resources with great sun and without shading are being wasted because of the size to load limitation.
The size to load limitation has altruistic origins in the limited solar rebate budgets of the past. I understand the original motivation to spread the rebate benefit, but climate change and a 33% Renewable Portfolio Standard goal by 2020 should trump these qualms.
The Quivira Vineyards story
During the summer, my sister and I visited the Dry Creek Valley in Sonoma County, California, for a day of wine tasting. After parking at the Quivira Vineyards tasting room shown in the top photo, I admired their solar module packed roof system.
Chatting with the tasting room staff, I was surprised to learn Quivira was aware of AB 920 and the 2008 version I posted about in AB 1920: California bill goes beyond Net Metering. Quivira’s 55 kW PV system has a history of generating more electricity than the winery requires. The Quivira Solar Power page hosts a Fat Spaniel view of instantaneous and cumulative generation and usage. While Quivira has imported more power from the grid thus far in 2009, they have generated a 126781 kWh (kiloWatt-hour) electricity surplus since 2005. Quivira’s peak electricity usage occurs around the fall harvest, so surplus electricity may yet be generated in 2009.
|From Quivira Vineyards 55 kW DC Solar Array|
Of course, I have to observe Quivira’s zeal for aesthetics resulted in Sharp 185 Watt solar modules being hacked to fit a roof valley shown in the photo above. Four (4) years of weathering has resulted in module discoloration and wear because of the compromised encapsulant. Sharp has offered triangular modules for a few years though I don’t know if these were offered in 2005. Today, triangular modules plus per module distributed power electronics could be used to maximize the power generation in this pseudo BIPV (Building Integrated PV) application. I assume Synergy Electrical Systems cut the modules per Quivira’s request.