Understanding tiered TOU rates with PG&E solar

[wwu123]

I have been looking at solar for awhile, but in general it did not make sense because my electricity usage is fairly efficient and not in sync with peak insolation. i.e. due to summer tree shading on the west side, I use the least kwh in summer and the most in winter (more lighting and furnace blower), whereas solar PV generates the most in summer and least in winter. However, next week a local solar non-profit is coming to do a site survey - they actually only do households like me who are looking for about a 2-3 kw array to cut down the expensive Tier 3 consumption. If I qualify, the installed price all in before federal incentives will run about $3/watt.

Now what I'm trying to calculate is how much I can save each year to shorten my payback period. Can anyone validate my assumptions about PG&E's E-6 TOU rate, which is not only TOU but also very confusingly tiered? Basically I understand the strategy is to try to bank excess generation credits during summer (where there is net generation at peak rates), and apply those credits during other periods of net usage at off-peak. What I'm confused about is how baselines are allocated across peak, partial-peak, and off-peak, and thus whether I'm banking excess generation at peak Tier 1 ($0.26/kwh) or peak Tier 3 ($0.44/kwh), which is a fairly big difference.

Assumption 1: PG&E meter can only measure net usage or generation, cannot measure solar generation separately from household usage.

If this is true, then I've calculated that on a typical summer day I'll have net usage of
Off-peak 10 kwh
Partial peak 0 kwh (solar offsets consumption)
Peak -5 kwh (net generation)

Assumption 2: PG&E baseline is pro-rated across the three periods, using absolute values. This is the confusing part.

My summer baseline is about 10 kwh per day. PG&E will add 10 + 0 + |-5| = 15 kwh, and then pro-rate baseline as:
Off-peak 6.7 kwh
Partial peak 0 kwh
Peak 3.3 kwh

Therefore in summer I'll my off-peak will push slightly into Tier 2 or even Tier 3, while my peak generation will be primarily Tier 1 & 2.

Assumption 3: The generation credits will be at the prevailing Tiered rate.

So basically the net generation in summer during peak hours will be about 3.3 kwh at Tier 1 rates of only $0.26/kwh.

Assumption 4: As a higher winter user, any winter solar generation is offsetting Tier 3 rates.

Maximum generation in winter might only be 5 kwh per day, whereas I use 20 kwh per day, so it's all offsetting Tier 3 consumption, which at off-peak and pp rates is $0.27-28/kwh.

So if these are correct, then an hour banked of peak summer Tier 1 at $0.26 is offsetting about one hour of off-peak winter Tier 3 at $0.27-28.

Basically my unique situation is that I can't get the maximum summer generation from the panels because the late afternoon sun is shaded by west trees. I'll still be a net generator in summer peak, but not to bank any credits at peak Tier 3 ($0.44). So it seems that I might not want to optimize tilt and direction for summer peak, but may want to optimize for winter and shoulder-season off-peak (e.g. capture more morning sun to the east), because even off-peak Tier 3 is saving $0.27-0.28?

[cyph]

I believe with Solar installed, you will most likely ALWAYS be in tier 1 or 2. Therefore, it would make it make sense to only apply the tier 1 and 2 cost.

With tier 1, you are allowed 350 kwhr per month (with PGE). With net metering, that would equal 4200 kwhr per year. As long as your Solar use push you below 4200 kwhr per year (kwhr bought from PGE per year), you will always be in tier 1. So, in the summer months, only use your high electrical units after 9PM, and you are basically tripling the power of your Solar power sold during peak.

For PGE, 3.3 kw sold at .287 cents is equivalent to 9.47 kw after 9PM. If you change your usage like this, I expect you to almost zero out your usage each day during the summer. In the winter, you will buy, but at tier 1 since you will have a bank of 4200 kwhr per year for your use as net-metering is per year and not per month.

[solarside]

I would just like to say how much I REALLY, REALLY hate the power company! They really try to make it confusing on purpose so people just throw up their arms, give up and just pay the damn bill. They want to own the solar panels and sell the solar power to you (plus a hefty profit of course) when in reality you can own the panels and not pay them at all. Did I say how much I hate them?

[russ]

I would just like to say how much I REALLY, REALLY hate the power company! They really try to make it confusing on purpose so people just throw up their arms, give up and just pay the damn bill. They want to own the solar panels and sell the solar power to you (plus a hefty profit of course) when in reality you can own the panels and not pay them at all. Did I say how much I hate them?

The power company couldn't care about your solar system - the amount produced is meaningless to them - the lost income is of no consequence at all. Don't screw yourself because you mistakenly think the power companies are bad guys.

[devsolar]

Your assumptions are pretty good with the way that the tiered rates work. What is hard to predict is just how many credits you'll earn because it's hard to predict just how much power you'll produce in a month, and how much you'll consume.

We have a 4.94 kW DC system. The first month we had the system on we generated a total of 700 kWh from the array and exported 151 kWh peak & 98 kWh partial peak to PG&E, but we consumed 293 kWh off peak. So we consumed a total of 44 kWh from PG&E, staying firmly in tier 1. We ended up with a $30 credit. Compare this to December which generated 256 kWh for the month resulting in consuming 65 partial peak kWh and 388 off peak kWh and pushed us into tier 3 for a small amount. That month's bill had a charge of $65. Normally we would've been in tier 5 and we would've been paying about $265. So even though we didn't produce a huge amount of power in December, it was enough to get us out of tiers 4 & 5 and save us a bundle. At the end of our true-up period in July, I estimate we'll have to pay PG&E less than a hundred dollars for all the electricity we've consumed over the course of the year. this doesn't count the $13 a month minimum meter charges we have every month that we have to pay no matter how much electricity we've generated or consumed. Call it a grid-tied fee, or a meter reading fee if you will.

Like you, we also have a problem with late afternoon production because our array points southeast (116 degrees), and we've got a large hill to the west of us. In the hours between 10am & 2pm I get great production, but after about 3:30pm production drops by half. Anything after 5pm is a mere fraction of what the noon hour was doing. But we still manage to do pretty well. I have at least 5 good hours of production in the middle of the day right now.

Before you spend the money on a solar setup, you should first look at ways to conserve energy at home, especially in the winter. That will give you the most bang for your buck. Got an electric dryer? Replace it with a gas one. We did this and our electricity bill went down by over a hundred a month and the gas bill only went up by 20 bucks. The new dryer paid for itself in less than a year.

[russ]

Like you, we also have a problem with late afternoon production because our array points southeast (116 degrees), and we've got a large hill to the west of us. In the hours between 10am & 2pm I get great production, but after about 3:30pm production drops by half. Anything after 5pm is a mere fraction of what the noon hour was doing. But we still manage to do pretty well. I have at least 5 good hours of production in the middle of the day right now. After 3:30 production would normally be minimal anyway -

Before you spend the money on a solar setup, you should first look at ways to conserve energy at home, especially in the winter. That will give you the most bang for your buck. Got an electric dryer? Replace it with a gas one. We did this and our electricity bill went down by over a hundred a month and the gas bill only went up by 20 bucks. The new dryer paid for itself in less than a year.

The last paragraph is good guidance - conservation first. That is the cheapest power around.

[SunEagle]

The last paragraph is good guidance - conservation first. That is the cheapest power around.

That is why I installed a solar water heater two years ago along with adding insulation. Got rid of all my incandescent lighting and replace with either LED or compact fluorescent. Use my ceiling fans instead of making it colder with my AC. Use timers to turn off inside and outside lighting. And installed a power monitor that tracks and tells me when and how much energy I am using during throughout the day and month along with giving me a temperature reading outside. All this helped reduce my electrical footprint on a 2300 sq ft home that use to see $450 to $475 electric bills in the Summer.

After all that my electric bill is at least $250 to $275 less a month and more during the cooler months.

[Ian S]

Got an electric dryer? Replace it with a gas one. We did this and our electricity bill went down by over a hundred a month and the gas bill only went up by 20 bucks. The new dryer paid for itself in less than a year.

I agree. I switched from an electric to gas dryer in 2000. Already had gas heat and hot water. Really noticed the difference in electric bill; gas bill hardly changed.

[wwu123]

I agree with the conservation angle, but I've played that out one for the most part - efficient lighting (LED, CFL, flourescent), tankless gas water heater, LED TV's and monitors, timer on the coffeemaker and other appliances, full remodel (double-pane argon windows, new insulation, sealed envelope), west-side shade trees, no A/C, gas dryer, 96% furnace with ECM motor, etc. I even run one Tivo to two TV's cause I didn't want the extra 35 watts 24x7. My only vice is a saltwater aquarium - they need a lot of lighting, pumps and heat - otherwise I wouldn't crack Tier 3 half the year.

Even without solar, if I switch from E-1 to TOU E-6 (plus their summer SmartRate program), PG&E has calculated my hour-by-hour usage and I'd save another 10% of my electricity bill based on TOU with my current usage. I could further shift consumption during summer peak to save another 2-5%.

[wwu123]

I believe with Solar installed, you will most likely ALWAYS be in tier 1 or 2. Therefore, it would make it make sense to only apply the tier 1 and 2 cost.

With tier 1, you are allowed 350 kwhr per month (with PGE). With net metering, that would equal 4200 kwhr per year. As long as your Solar use push you below 4200 kwhr per year (kwhr bought from PGE per year), you will always be in tier 1. So, in the summer months, only use your high electrical units after 9PM, and you are basically tripling the power of your Solar power sold during peak.

For PGE, 3.3 kw sold at .287 cents is equivalent to 9.47 kw after 9PM. If you change your usage like this, I expect you to almost zero out your usage each day during the summer. In the winter, you will buy, but at tier 1 since you will have a bank of 4200 kwhr per year for your use as net-metering is per year and not per month.

That really simplifies things if the they use an annualized baseline, my assumption and seeming mistake is to assume they recalculated baselines on monthly buckets. Since they only true you up once a year, I suppose that makes sense. That must mean that they won't know if you're getting into Tier 2 or 3 on each period (peak, pp, and off-peak) until the 6th to 12th month of the true-up.

Now if folks on solar are pretty much always in Tier 1 or 2, then no one's really getting as high as $0.45/kwh for their credits, but you're right even at $0.30-ish for net generation periods, that'll cover a lot of Tier 1-2 off-peak. An annualized baseline would work great for me, as I'm trying to shift summer credits to cover winter usage. So based on that, I should still optimize for peak summer generation and total annual generation, not compromise towards winter generation?

[wwu123]

Your assumptions are pretty good with the way that the tiered rates work. What is hard to predict is just how many credits you'll earn because it's hard to predict just how much power you'll produce in a month, and how much you'll consume.

We have a 4.94 kW DC system. The first month we had the system on we generated a total of 700 kWh from the array and exported 151 kWh peak & 98 kWh partial peak to PG&E, but we consumed 293 kWh off peak. So we consumed a total of 44 kWh from PG&E, staying firmly in tier 1. We ended up with a $30 credit. Compare this to December which generated 256 kWh for the month resulting in consuming 65 partial peak kWh and 388 off peak kWh and pushed us into tier 3 for a small amount. That month's bill had a charge of $65. Normally we would've been in tier 5 and we would've been paying about $265. So even though we didn't produce a huge amount of power in December, it was enough to get us out of tiers 4 & 5 and save us a bundle. At the end of our true-up period in July, I estimate we'll have to pay PG&E less than a hundred dollars for all the electricity we've consumed over the course of the year. this doesn't count the $13 a month minimum meter charges we have every month that we have to pay no matter how much electricity we've generated or consumed. Call it a grid-tied fee, or a meter reading fee if you will.

Like you, we also have a problem with late afternoon production because our array points southeast (116 degrees), and we've got a large hill to the west of us. In the hours between 10am & 2pm I get great production, but after about 3:30pm production drops by half. Anything after 5pm is a mere fraction of what the noon hour was doing. But we still manage to do pretty well. I have at least 5 good hours of production in the middle of the day right now.

Before you spend the money on a solar setup, you should first look at ways to conserve energy at home, especially in the winter. That will give you the most bang for your buck. Got an electric dryer? Replace it with a gas one. We did this and our electricity bill went down by over a hundred a month and the gas bill only went up by 20 bucks. The new dryer paid for itself in less than a year.

Your situation sounds very relevant. I'm curious if you pointed southeast specifically because of the afternoon shading, or was that more because of the orientation of your roof? And are you on E-6, or did you stick with non-TOU E-1, or grandfathered into E-7?

I have roughly south (172) and east (82) roof planes, and I have a feeling this installer is going to recommend east because of the afternoon shade. Indeed my rough PVwatts calculations so far suggest with the afternoon shading that the two can be pretty close. But some of the trees are so close, that there can be 1-2 more hours of afternoon sun on the south roof (shadowed between 3-4 pm) than on the east roof (shadowed between 1-3 pm), so the shading is not uniform.

[cyph]

That really simplifies things if the they use an annualized baseline, my assumption and seeming mistake is to assume they recalculated baselines on monthly buckets. Since they only true you up once a year, I suppose that makes sense. That must mean that they won't know if you're getting into Tier 2 or 3 on each period (peak, pp, and off-peak) until the 6th to 12th month of the true-up.

Now if folks on solar are pretty much always in Tier 1 or 2, then no one's really getting as high as $0.45/kwh for their credits, but you're right even at $0.30-ish for net generation periods, that'll cover a lot of Tier 1-2 off-peak. An annualized baseline would work great for me, as I'm trying to shift summer credits to cover winter usage. So based on that, I should still optimize for peak summer generation and total annual generation, not compromise towards winter generation?

I may be incorrect in my previous assumption. PGE uses a monthly baseline rather than a rolling full year as the baseline changes based on winter or summer schedule. Therefore it's possible to roll into tier 2 and 3 in the winter months. The saving grace is that there is no peak rate and the per hour cost is lower.

[devsolar]

I may be incorrect in my previous assumption. PGE uses a monthly baseline rather than a rolling full year as the baseline changes based on winter or summer schedule. Therefore it's possible to roll into tier 2 and 3 in the winter months. The saving grace is that there is no peak rate and the per hour cost is lower.

You are correct, it's still a monthly baseline. And I got into tiers 2 & 3 during the winter even with the solar. It was still cheaper than before we had solar. I would've easily been in tiers 4 & 5. So slipping into tier 3 wasn't so bad.

[wwu123]

You are correct, it's still a monthly baseline. And I got into tiers 2 & 3 during the winter even with the solar. It was still cheaper than before we had solar. I would've easily been in tiers 4 & 5. So slipping into tier 3 wasn't so bad.

So with monthly baselines, I understand in Winter things are relatively straightforward as one is still a net consumer, and the minimal kwh generated those months will just offset Tier 3 or higher rates at $0.30-$0.35.

Now with the Summer credits, even if one is a net consumer for the month, your summer example showed you can still generate a net credit if one is a net producer during peak and a net consumer during off-peak.

Let me take an extreme but unrealistic example, where I generate 20 Kwh during peak and consume none, have no pp generation or usage, and then generate 0 kwh but consume 20 kwh off-peak. So my net consumption each day is exactly zero. My baseline of about 10 kwh/day will be split into -5 Kwh peak, 0 kwh pp and 5 kwh off-peak. My peak credits would be about:
6.5 kwh Tier 1 & 2 x $0.27 +
13.5 kwh Tier 3 x $0.43 =
$7.55/day

My off-peak usage would be about:
6.5 kwh Tier 1 & 2 x $0.10 +
13.5 kwh Tier 3 x $0.30 =
$4.70/day

for a credit of about $7.55-4.70 = $2.80/day, even though net usage = 0 (generation = consumption = 20kwh/day). If I recalculate above with 5 kwh peak consumption and 15 kwh off-peak consumption, the baseline is still split evenly but the credit drops to about $2.20/day.

Since this is idealized, and there will be some generation and consumption during partial peak, basically one could bank closer to $1/day, or $30/month. So in the summer, at zero net generation (or in your case net consumption), the benefit of E-6 would be getting that much credit in the best months, to offset shoulder or winter month net consumption, compared to E-1, which would just zero out the summer months bill's.

It also seems that around Sept/October, which is still under PG&E summer TOU rates, but the solar generation is much weaker and the day is shorter, there could be some risk of being a net peak user during afternoons, and that combined with Tier 3 would be costly. That could be a real risk for me, as with afternoon shading I'd stop generating possibly by 2 or 3 pm, while peak usage goes until 7 pm.

[devsolar]

The way that monthly baselines are calculated and used can be a bit tricky. To see if you went over your baseline, PG&E first sums up all the power you used and subtracts from it all the power you generated. If your total baseline for the month was 240 kWh, and you exported 150 kWh of peak, 50 kWh of partial-peak, and used 300 kWh of off-peak, then your total consumption for the month would be 100 kWh (300 - 150 - 50 = 100). Well under the baseline. All credits are charges would be calculated using Tier 1 rates. If, on the other hand, you only exported 50 kWh peak, 25 kWh partial peak, and consumed 400 kWh off peak, you would be at 325 kWh consumed for the month, which would be 85 kWh over baseline, and then you'd be subject to Tiers. The baseline is proportionally distributed amongst all the time periods. To calculate how much baseline is allocated to each tier, you divide the baseline, 240, by the total amount of power you consumed, 325 in this case, which equals 0.738446154. Then multiple that number by the total amount of power you consumed or produced for the time periods:

Peak: 0.738446154 * 50 = 36.923 kWh baseline
Partial-peak: 0.738446154 * 25 = 18.462 kWh baseline
Off-peak: 0.738446154 * 400 = 295.385 kWh baseline (yes, this is more than the total baseline, but that's how PG&E calculates it)

Lemme give you some examples of how our first few bills were:

August 2012:
Baseline: 240 kWh
Peak: -151 kWh
Partial-peak: -98 kWh
Off-peak: 293 kWh
Total consumed for the month: 44 kWh
All consumption was in Tier 1. Credits and charges were:
Peak: $-42.10
Partial Peak: $-16.68
Off-Peak: $28.66
Total: $-30.12

September 2012:
Baseline: 247.5 kWh
Peak: -91 kWh
Partial-peak: -51 kWh
Off-peak: 209 kWh
Total consumed for the month: 67 kWh
All consumption was in Tier 1. Credits and charges were:
Peak: $-20.37
Partial Peak: $-8.68
Off-Peak: $20.55
Total: $-13.60

October 2012:
Baseline: 210 kWh
Peak: -2 kWh
Partial-peak: -18 kWh
Off-peak: 298 kWh
Total consumed for the month: 278 kWh
Went over baseline by 68, split into 3 tiers:
Peak:
Tier 1: -1.511 kWh * 0.27883 = $-0.42
Tier 2: -0.453 kWH * 0.2964 = $-0.13
Tier 3: -0.036 kWh * 0.44653 = $-0.02
Total credits: $0.57
Partial Peak
Tier 1: -13.597 kWh * 0.17017 = $-2.31
Tier 2: -4.079 kWh * 0.18775 = $-0.77
Tier 3: -0.324 kWh * 0.33788 = $-0.11
Total credits: $3.19
Off-Peak:
Tier 1: 225.108 kWh * 0.09781 = $22.02 (see, off-peak baseline is higher than the total monthly baseline)
Tier 2: 67.535 kWh * 0.11538 = $7.79
Tier 3: 5.360 kWh * 0.26551 = $1.42
Total Charges: $31.23
Total: $27.57

Now compare things to December 2012 when production sucked and consumption was up:

December 2012:
Baseline: 273 kWh
Partial-peak: 65kWh
Off-peak: 388 kWh
Total consumed for the month: 453 kWh
Went over baseline by 180, split into 3 tiers:
Partial Peak
Tier 1: 39.172 kWh * 0.11776 = $4.61
Tier 2: 11.752 kWh * 0.13533 = $1.59
Tier 3: 14.076 kWh * 0.28546 = $4.02
Total charges: $10.22
Off-Peak:
Tier 1: 233.828 kWh * 0.10189 = $23.82
Tier 2: 70.148 kWh * 0.11947 = $8.38
Tier 3: 84.204 kWh * 0.26959 = $22.65
Total Charges: $54.97
Total: $65.07

So while I did get into Tier 3, it wasn't that bad, and it was still cheaper than the previous year's December bill by over $200.