AB 920: Free the Roofs for Solar!

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?

The CPUC OPPOSED the revolutionary provisions of AB 920 from the start. Please see the CPUC Bill Analysis — May 13, 2009 and Legislative Memo – May 7, 2009.

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.

A spate of odd strategic PV news hit late day Thursday including MEMC to Buy SunEdison” and “National Semi Buys Energy Recommerce”.


  1. bernard schwab says:

    Up to now, Edison has been stealing my excess generated power every month. Thanks for that Bill AB920.. Edison might get around it by paying very little.

  2. Velo Steve says:

    This bill fails to create an incentive to save electricity, because the value of the net surplus is much less than the typical value of the time-of-use credits a net-generating customer will have accrued. Using my case as an example, I have 2 GWh of net surplus, but enough credits to buy another 2GWh. That means that I can use (or waste) 4GWh of electricity at an effective rate half that of whatever compensation rate they set. This makes it much cheaper to heat with electricity than propane, even though heating with electricity is normally considered a poor choice. It would make much more sense for the compensation to be a percentage of the credits on the customer’s account at the end of the true-up period.

    Te web site link shows a graph illustrating the cost of electric usage in this scenario.

    One comment about “size to load”: We sized this array to produce less than our house originally used, but installed it as part of a remodel. The remodel added square footage, but included aggressive insulation improvements, an efficient furnace and more CFL lighting. Even though we added air conditioning to the house, our usage turns out to be less than the array produces. The excess production is an accident, but it would be nice to be compensated for the value we deliver to the system.

  3. Brad Chatten says:

    My system was designed to provide my all electric home with enough Kwh to allow three people to live with comfort. Three are now one, and I have (had) some extra, if it were not for P.G.E. taking my extra every year. I have E7 rate and spin my meter back sending all the extra out to the grid. I remember being sent a questionnaire form to check off what I wish to do with the surplus Kwh. I chose to rollover my reserve so I could use it in the winter months. But that never happen. Called PGE solar billing and asked what happen to my reserve, they zero my account again. Again getting nothing. I find it hard to understand why PGE can TAKE, STEAL, ZERO my Kwh and it is legal for them to do so. Where is this right? I asked PGE to explain and they tell me CPUC ruled that is because solar owners get a rebate.It is double dipping, not fair to other account owners. I never received a rebate I told them. NEVER… I never received any tax credits either, so that doesn’t fly. PGE charges me 27 cents per Kwh at summer/peak, but only required to pay me 4 cents per Kwh over all. How is this fair. We need to rethink how the members are placed on the CPUC. The whole idea of rebates are to get more people to install Solar, Wind or Renewable Energy. It is not designed to be even steven with regular rate payers. The design is to get MORE rate payers installing some form of energy and get a rebate. I guess we as solar/wind generators need to rethink who we elect into office. What I don’t understand, where is it a law or rule that PGE, SCE, SMUD, and other electric companies have the right to take our power. When did that happen that stealing was OK? California also need to do something about pulling the rebate program back out of PGE’s control. Again how was this right to have PGE holding the control an something that they do NOT want happen anyway?

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