Questions about Solar City PPA in NorCal area

[Innerloop]

Hey all -

I had a question / request for advice on a PPA proposal in the Bay Area.

Our situation seems ideal for Solar of some sort - lots of unshaded southern exposure, high average usage with lots of Tier 3-4+ usage, no intentions of moving in the near future.

On paper everything makes sense to do a PPA and not tie up a lot of capital, and not have to worry about maintenance or hassles of getting rebates, forms, etc.

Their contract calls for $0.185 per kWh with a 2.9% annual increase. It seems like due to our typical usage, this will save $60 or so a month.

My question stems from the PG&E crediting and net metering issue. They haven't done a great job explaining this and I feel like there may be a hidden danger here.

The rate that they are charging is higher than our local Tier 1 rate, which is something like $0.12/kWh. Despite this, our higher-tier usage still makes this a win even though we are "overpaying" by like 6 cents for a lot of the power. But what is unclear is how the PG&E credit works for production that happens during the day above our usage. If we are basically paying 18.5 cents for the full production and selling much of that back to PG&E for 12 cents of credit, then we are effectively losing money on any production above our usage, correct?

My worry is that the salesperson stated that they tend to under-estimate the annual production on the panels. If that is the case, then our potential savings could get eaten up by over-production that we are losing 6 cents per kWh on.

It seems like given the prices of Tier 1 PG&E and the PPA agreed price, ideally we would product just enough solar power to offset all our Tier 3+ usage, and no more than that.

Am I missing something? Does the PG&E daytime buyback rate go higher than 12 cents? I've searched to find what the credit rate is to no avail. Should we ask the salesperson to quote a smaller installation to minimize the "risk" of over-production that we're basically subsidizing?

Thanks for any advice.

[bonaire]

Honestly, get their rate without the 2.9% increase. "Sounds good" now but electric pricing is not destined to rise at that rate nationally. I am not in electric pricing hell (CA) but rather PA. We pay 2cents less than three years ago per kWh. The glut of Nat Gas has the 2017 wholesale auction price to be a very low value based on the last decade. Meaning, we will see no grid price increases based on generation. Local PoCo rates may go up to maintain transmission lines. That is the area to keep an eye on for PG&E.

2.9% annually increases the price by 50% in 20 years.

Their lease program is really a financing vehicle to sell your solar PV system on a Solar REIT exchange and make some form of return on that. Price out leases from three vendors before proceeding. Leases are primarily to spread the price of the system over a longer period. Much like a 30 year mortgage over a 15 year. You end up paying more for it but feel that your monthly payments are lower so it is cheaper. Try other financing methods or just consider a small system. Conserve first, as every dollar saved in conservation leads to almost five dollars saved in solar pv array costs.

[tattva]

Innerloop, I am also in the same boat as you evaluating quotes for a solar system in south bay. Would you mind sharing the proposal document you received from Solar City privately? Thanks.

Hey all -

I had a question / request for advice on a PPA proposal in the Bay Area.

Our situation seems ideal for Solar of some sort - lots of unshaded southern exposure, high average usage with lots of Tier 3-4+ usage, no intentions of moving in the near future.

On paper everything makes sense to do a PPA and not tie up a lot of capital, and not have to worry about maintenance or hassles of getting rebates, forms, etc.

Their contract calls for $0.185 per kWh with a 2.9% annual increase. It seems like due to our typical usage, this will save $60 or so a month.

My question stems from the PG&E crediting and net metering issue. They haven't done a great job explaining this and I feel like there may be a hidden danger here.

The rate that they are charging is higher than our local Tier 1 rate, which is something like $0.12/kWh. Despite this, our higher-tier usage still makes this a win even though we are "overpaying" by like 6 cents for a lot of the power. But what is unclear is how the PG&E credit works for production that happens during the day above our usage. If we are basically paying 18.5 cents for the full production and selling much of that back to PG&E for 12 cents of credit, then we are effectively losing money on any production above our usage, correct?

My worry is that the salesperson stated that they tend to under-estimate the annual production on the panels. If that is the case, then our potential savings could get eaten up by over-production that we are losing 6 cents per kWh on.

It seems like given the prices of Tier 1 PG&E and the PPA agreed price, ideally we would product just enough solar power to offset all our Tier 3+ usage, and no more than that.

Am I missing something? Does the PG&E daytime buyback rate go higher than 12 cents? I've searched to find what the credit rate is to no avail. Should we ask the salesperson to quote a smaller installation to minimize the "risk" of over-production that we're basically subsidizing?

Thanks for any advice.

[wanabefree]

Hey all -

I had a question / request for advice on a PPA proposal in the Bay Area.

Our situation seems ideal for Solar of some sort - lots of unshaded southern exposure, high average usage with lots of Tier 3-4+ usage, no intentions of moving in the near future.

On paper everything makes sense to do a PPA and not tie up a lot of capital, and not have to worry about maintenance or hassles of getting rebates, forms, etc.

Their contract calls for $0.185 per kWh with a 2.9% annual increase. It seems like due to our typical usage, this will save $60 or so a month.

My question stems from the PG&E crediting and net metering issue. They haven't done a great job explaining this and I feel like there may be a hidden danger here.

The rate that they are charging is higher than our local Tier 1 rate, which is something like $0.12/kWh. Despite this, our higher-tier usage still makes this a win even though we are "overpaying" by like 6 cents for a lot of the power. But what is unclear is how the PG&E credit works for production that happens during the day above our usage. If we are basically paying 18.5 cents for the full production and selling much of that back to PG&E for 12 cents of credit, then we are effectively losing money on any production above our usage, correct?

My worry is that the salesperson stated that they tend to under-estimate the annual production on the panels. If that is the case, then our potential savings could get eaten up by over-production that we are losing 6 cents per kWh on.

It seems like given the prices of Tier 1 PG&E and the PPA agreed price, ideally we would product just enough solar power to offset all our Tier 3+ usage, and no more than that.

Am I missing something? Does the PG&E daytime buyback rate go higher than 12 cents? I've searched to find what the credit rate is to no avail. Should we ask the salesperson to quote a smaller installation to minimize the "risk" of over-production that we're basically subsidizing?

Thanks for any advice.

I think your PPA rate is a little high. I am in Southern California Edison area and I think your rates are similar to ours as it is all controlled by the CPUC.
We are in the the final stages of approving Solar deal with a no down and $.15 starting rate and the same 2.9 % annual escalator. Our current standard rates are $.13 for tier 1,$.16 for tier2, $.27 for tier3 and $.31 for all tier$ and above. However there is a proposed change before the CPUC for to do away with Tier4 but raise the Tier1 rate to $.158, Tier2 to $.205 and Tier3 and above to $.255. The change is said to be revenue neutral but favors mostly Heavy users and possibly hurts Solar Net Meter users with undersized systems.

You will hear a lot of folks say that they would try to get the rate escalator clause waived but I think it is much easier to get the starting rate lowered as that is a blank line on all the contracts I have seen and the 2.9 escalator is printed in the body of all the contracts I have seen so far. I even asked my salesman if I could change it and he told me in no certain terms that is non negotiable and part of all the contracts where as the starting rate is not and therefore negotiable to some degree. At least here in California PPA's have become pretty standardized.

Back to my the question of rates I have seen a few other PPA contracts and a friend of mine signed one for $.16 a few days before we told him we were looking at the same thing but with a different company and he was surprised we got a lower rate quote than he was offered on similar systems. We are now waiting on a final proposal after there site survey before we give them the final go ahead. I have a separate thread here with more information if you are interested.

[rposeyca]

Get a second quote

I got a quote from Solar City for a 8.5 kWh system / 10,031 kWh annual with the same PPA rate and increase. Ran into some questions I had before signing their contract on re-sale of my house and shade control/impact. This caused me to do a quick internet search and I found 1BOG (1 Block Off the Grid) to give me a quote over the phone. I was then told of the prepaid option, which locked in the rate for 20 years and no escalations. I went back to SC to ask the same. Prepaid from SC was $23,360 and 1BOG is $18,397.50 (with a $850 rebate). Plus, the configuration 1BOG quoted was 12,654 kWh. On the forum researching any gotchas on prepaid, not finding much. Looking like a good deal to me.
So, give them a call, it may save you money.

[russ]

On the forum researching any gotchas on prepaid, not finding much. Looking like a good deal to me.
So, give them a call, it may save you money.

Just be aware that you are dealing with companies that have nothing to do with your deal other than the sale. Others who you will have no connection with will do all the work.

Better to use a party that will do the actual installation.

[rposeyca]

Actually, the people you deal with at 1BOG are the installers. The "company" is just financing the deal.

[russ]

Actually, the people you deal with at 1BOG are the installers. The "company" is just financing the deal.

The sales people are installers? Wrong

Actually I have an ethical problem with 1BOG - they started off using cheap labor and to save the world when in reality they were a for profit company.

[rposeyca]

The sales people are installers? Wrong

Actually I have an ethical problem with 1BOG - they started off using cheap labor and to save the world when in reality they were a for profit company.

Not sure I understand. I don't think I've heard of a non-profit Solar company. In N. Cal, the person I dealt with was from Pure Energies Installation, who does their installation. Any specific issues you had with them that would warrant a question or two, before I agree to a contract?

[russ]

Not sure I understand. I don't think I've heard of a non-profit Solar company. In N. Cal, the person I dealt with was from Pure Energies Installation, who does their installation. Any specific issues you had with them that would warrant a question or two, before I agree to a contract?

hNot really - I just disagree with presenting yourself as a bunch of do gooders with out a nasty profit motive while operating a for profit organization. A green site where I used to be a moderator some five years back discussed 1BOG at times. 1BOG even bought one of the top green sites to flog their products while never mentioning they owned it.

[wwu123]

Not sure I understand. I don't think I've heard of a non-profit Solar company. In N. Cal, the person I dealt with was from Pure Energies Installation, who does their installation. Any specific issues you had with them that would warrant a question or two, before I agree to a contract?

In fact there are non-profit solar companies, though I'm sure not many of them. I purchased mine from a local registered nonprofit org (not any of the compoanies noted in this thread) that provides solar installer training and thus uses some volunteer trainees for some of the noncritical physical installation work. As a result they also sell with a reasonable labor markup below for-profit rates - my system was less than $3/watt BEFORE tax credits here in NorCal. The catch is they're capacity-constrained, so they only select a limited number of applications from homes that have only modest electricity consumption - generally folks like me for which solar would otherwise not pan out economically.

[LAkeShow]

I think your PPA rate is a little high. I am in Southern California Edison area and I think your rates are similar to ours as it is all controlled by the CPUC.
We are in the the final stages of approving Solar deal with a no down and $.15 starting rate and the same 2.9 % annual escalator. Our current standard rates are $.13 for tier 1,$.16 for tier2, $.27 for tier3 and $.31 for all tier$ and above. However there is a proposed change before the CPUC for to do away with Tier4 but raise the Tier1 rate to $.158, Tier2 to $.205 and Tier3 and above to $.255. The change is said to be revenue neutral but favors mostly Heavy users and possibly hurts Solar Net Meter users with undersized systems.

You will hear a lot of folks say that they would try to get the rate escalator clause waived but I think it is much easier to get the starting rate lowered as that is a blank line on all the contracts I have seen and the 2.9 escalator is printed in the body of all the contracts I have seen so far. I even asked my salesman if I could change it and he told me in no certain terms that is non negotiable and part of all the contracts where as the starting rate is not and therefore negotiable to some degree. At least here in California PPA's have become pretty standardized.

Back to my the question of rates I have seen a few other PPA contracts and a friend of mine signed one for $.16 a few days before we told him we were looking at the same thing but with a different company and he was surprised we got a lower rate quote than he was offered on similar systems. We are now waiting on a final proposal after there site survey before we give them the final go ahead. I have a separate thread here with more information if you are interested.

Hi wanabefree would you mind pointing me to the separate thread? I am in process with Solarcity and have a lot of questions. Thank you.

[eah123]

I signed a contract with solar city for a PPA for 15.9 cents per kilowatt hour with an annual 2.9% increase.
I canceled my agreement after getting some purchase quotes from local installers.
After I canceled, my solar city sales representative called me and offered to waive the 2.9% annual increase. So I know for a fact that this is something that can be done.

[solar pete]

Hi All,

Looks like I will be helping to write an article about examining the lowering cost point for grid tied solar pv systems in the USA. I would like to get a handle on a few things like the current cost of PPA pricing from the bigger Solar Companies so if anyone could chime in with some recent PPA prices that would be great. I am also interested in the cost per watt for purchased systems and the repayment amounts on leased or loaned systems.Cheers