Can someone explain SDG&E NEM 2.0 TOU vs non TOU?

[CharlieEscCA]

I'm trying to understand how the credit for production sent to the grid is different between TOU vs non-TOU.

As I understand, I have a choice of going TOU immediately or putting it off for 5 years.

I've read everything I can find on the SDGE site, but I'm still uncertain. I know that I.m going to pay roughly 2 cents per kWh pulled from the grid due to the non recoverable costs (or whatever they are called), but let's ignore that. Under non-TOU, what's messing with me is the tiers (which is now just two tiers) that are in place. If I am non-TOU, for power sent to the grid am I getting Tier 1 credit or Tier 2 credit, and similarly in the months where I use more than I produce, am I using up the credits at a Tier 1 rate or a Tier 2 rate? Or does Tier 1 and Tier 2 not come into play, and at true up it's just net 12 months kWh user from the grid that gets paid for (again ignoring the 2 cents non recoverable costs)?

I think I've got it sort of figured out for TOU in that the credit I get is determined by the time produced and the retail rate at that time of day, and then this credit is used up by the TOU retail rate at the time of day I am pulling power from the grid. Thus if you can produce more (and use less) during peak time of day, you could size your system smaller to yield the same "true up" bill due. And hence due to TOU peak being 11 am to 6 pm (currently), changing your grid to a more westerly orientation from due south is likely a plus (providing going west doesn't make for more shading).

What's complicating my situation is I purposely wish to overproduce so that I can run my A/C more in the summer -- go from it's only run when it absolutely has to (the wife can't take it anymore ) to saying "go ahead and use it more" and trying to figure out what "more" is going to mean both in total annual kWh AND what those kWh usages might be in a TOU and non TOU scenario. My last year usage was 10,000 kWh, and I'm thinking of going with a system that will provide about 13,400 kWH -- right now my calculations show a payback of 5.3 years at 10K current usage or 3.7 years if usage was 13.4K -- this is with the non-TOU rate plan. Thus even if I didn't really need to be at 13.4K production, to me either a 5.3 year or 3.7 year payback looks attractive AND practically speaking removes the electric bill from my post-retirement budget (which is about 4 years away).

So back to my question, how exactly does TOU vs non-TOU credits work? And if you were not on NEM 1.0 and were putting your system in now, would you go TOU immediate or stay with the non-TOU rate plan while you are allowed to do so?

[cebury]

I am well versed in pge rates, not Sdge. But with TOU w/tiers, the tiering rate kicks in only within each tier, per billing period. Pge grants a baseline allocation for your region ( a two digit code) and that baseline, such as x kwh per day, is what determines teirs. Eg over 100% of your allocation, is tier 2. Over 200% is teir 3. So if your region baseline allocation is 11 kwh, that means 11x30=330 kwh you can use during a 30 day billing period at the base teir 1 rate. So if you are under that, ONLY TOU windows will matter because you never got it to teir 2.

They calculate it monthly, based on days in the bill period. They'll total all the kwh used in each tou period, for the month. If any tou period is over your baseline, it then gets charged at that tou period teired rate.

Things to keep in mind:

Very few solar owners ever get into teir2. Most stay in teir 1, as the solar panel helps offset enough that you don't Import over baseline. That might help with your decision, as usually t1 rates for tou tend to be lower in non peak periods vs non-tou.

Because it's monthly, days you don't use much kwh will help even out the hot days you use a lot. Then, each monthly bill dollar total is stored until your trueup period ends. That means lower bill months, which some will be negative for larger solar size (utility owes you money) help offset the expensive months.

Most resi solar users benefit most from tou. That's usually because many homes are empty during the day and therefore generate lots of credits during peak times. Someone is here 24x7 at my house and I like it cooler during the day, even my usage profile benefitted more from tou vs non. But I'm in nem1 where the peak extends til 7pm and my home is more energy efficient compared to others in my neighborhood. However, Im in a much hotter area than SD. In total, Once you retire, you may very well use up more peak credits than my family.

Pge has some very good Explanation of Your Bill for Solar Owners. Have you searched on Sdge site yet?

If I was forced to answer your final question, I'd strongly recommend TOU for anyone who isn't a heavy, heavy peak period user. For those residentials who might be heavy, I'd still say TOU until you learn the ropes.

About orientation: recently, SCE and Sdge tou rated bills were calculated using the South vs southwest scenarios, and even though insulation in later hours was greater when faced sw/W, it still didn't make up for the much longer window for straight south, absent shade factors. Now that is with current windows and rates, be advised the utility rate schedules and tou windows are moving targets for the next 4 years. Pge puts the expected windows and rates right in their resi TOU tariff. The targets moving, but we have forecasts.

[J.P.M.]

First off, you are not better off financially by oversizing. PERIOD.

If you are serious about TOU, now or later, remember that sooner or later you will be on TOU whether you want to or not, and probably sooner than 5 yrs.

Some digging to understand how SDG & E's tiered billing and meter reading schedule will be necessary on your part.

There are currently 21 billing cycles with 12 billing periods for a billing year. Each account w/SDG & E is on one billing cycle and usually stays with that billing cycle. Each billing cycle is different, the number of days per billing period is between 29 and 32, that number of billing days does not follow any schedule I've been able to make sense of and changes every year. I am on billing cycle 3. You are probably on a different one. Your billing cycle number is on your bill. All the rest of that is on line for the looking.

You've got the basics. Bottom line, either way tiered or T.O.U. you will only get about $0.026 for excess production at year end trueup. The difference you see may be some confusion between monthly excess generation and how any accumulated trueup; is handled at year end.

If your interested in details, read on. If not, skip to the bold print below.[

On residential tiered rates (see schedule "DR" on the current and effective tariff schedule sheet), Cal P.U.C sheet# 27653-E, under #3, Baseline rates, the basic allowance per billing period is the basic daily allowance for winter or summer as appropriate, and whether or not you are you are a gas customer or an all electric (only) customer (see the table), multiplied by the number of billing days per billing period.

Next, there are currently 2 tiers for pricing. Tier one is a per kWh charge per billing period for all usage <130% of your baseline allowance. All use above that 130 % of baseline usage is charged at tier 2. Those current rates in the right hand box of the 1st table on Cal. P.U.C. Sheet # 28185 - E of the current schedule DR.

All that PITA stuff will allow you to figure out a current tiered bill.

NOW, for those with a PV system and on tiered rates:

As a result of AB327, 1 kWh of excess energy produced per billing period is credited for less than it's billed, currently by $0.01956/kWh. As for how excess is carried over to offset future use, it's credited $ wise the same way it's billed - that is by tier. An example: One billing period last summer, I was gone for 20 days. As a way to check how well my system monitor agrees with my SDG & E meter, When I go away for an extended period, I shut everything off at the meter except my fridge, solar thermal H2O heater pump and the PV system. Anyway, the PV system generated 591 excess kWh for that billing period. The excess $ value was for 441 kWk (130% of the baseline allow. for that month at tier 1, and 591-440 = 150 kWh at tier 2 pricing, both amounts less the $0.01956/kWh disallowance as a result of AB 327 rate reform. Had I used up all those credits in the following month, in most cases it would be a wash, but I'd make out a bit better if I had a large use month and used lower credited excess over several months to offset large usage (and thus more tier 2 usage), but until true up , that's mostly a moot point.

At true up, which happens once/yr. - and this is where it's evident that excess generation is not cost effective as a money making scheme - any excess generation is paid or credited to your account at the "avoided" or wholesale rate - currently, for Dec. 2016, $0.02696/kWh. That # has been dropping for some time now and been as high as $0.05082 for Nov. 2014 - see the true up monthly rate table for history.

FWIW, if that 3,500 kWh/yr. excess generation you're planning for is for A/C only, note that a 5 ton A/C unit will draw <= 6 kW. I've got 3,200 ft.^2 in north county. a 5 ton The 20 yr. old A/C that runs < 180 or so year, and burns up ~ 1,100 kWh/yr. An EV doing 12,000 miles/yr. will need about 3,500 kWh/yr.

Now, getting away from tiered rates and over to T.O.U rates, things at SDG & E are per schedule "DR-SES".

Because how much you pay is f(when you use the power) only and with generation credited per T.O.U. rates (but still less the $0.01956/kWh), it is perhaps useful to view a PV system as a revenue producer separate from how the electricity you use is actually billed and paid for.

A thought experiment may help to explain: Suppose you have a PV system and are a SDG & E customer on T.O.U. billing. Also suppose (theoretically) you use NO electricity - ever. In that case, everything your system produces is credited to you at the published rates per schedule "DR-SES", less the $0.01956/kWh. With all that, the amount of $$ revenue your, or any system, might generate over the course of a year can be roughly estimated by using hourly output option of PVWatts and a spread sheet.

Do this: Put the rates and hourly times from schedule DR-SES onto a spreadsheet. This will take a bit of patience and about 10-15 min. once you figure it out for hours, weekends vs. weekdays, seasons and a few holidays. Patience helps. Then, load the PV Watts hourly output estimates for a 1 kW system onto another column. Each column will have 8,760 rows. Multiply each hourly generation estimate by (the hourly kWh rate - $0.01956/kWh) for the estimated hourly revenue. Sum the hourly revenues for an annual revenue for a 1 kW system.

Next: For annual estimated cost of electrical usage under T.O.U., separate from any PV system or revenue considerations. Things are similar in that a spreadsheet is still used, but you don't have your hourly , or actually, 1/4 hourly usage. Fortunately SDG & E does have that historical usage for the last 23 months. It's available on their website. If you are not registered you will need to be. The PITA part here is you will need to do the same spreadsheet work for the hourly rate input but do it in 15 min. increments. That's not as bad as it sounds once you've gotten the hang of it from the revenue spreadsheet.

Finally, divide the annual cost of the T.O.U. electricity purchased by the amount of annual revenue a 1 kW system produces. That will be a rough 1st cut estimate of the (shade free) system size you may need.

As long as you're considering a ground mount, I'd go for a 210 deg. (true) azimuth and a 30 deg. tilt. Easy to describe and do for little difference of a few deg. The difference in output and revenue between that and a 190 az., 30 deg. tilt is within 5% on a sophisticated modeling program and I suspect things will only tend to favor T.O.U. in the future.

For 13,500 kWh/yr. and no shade, an 8 kW system will produce an average of 13,500 kWh/yr. at a 30/30orientation and ~ 14,800 kWh/yr. at a 10 deg. az., 30 deg. tilt. The T.O.U. revenue for the 30/30 system orientation will cover the billing. The 10 deg. az. 30 deg. tilt T.O.U. revenue will be about 50 bucks short. Both T.O.U and tiered rates will still be subject to the $120/yr. minimum billing.

Bottom line: if your use pattern is similar to mine, T.O.U. of tiered rates will produce about the same result. I'd favor the more westerly azimuth as I'm of the opinion the T.O.U. is here to stay, and a 210 azimuth will produce pretty close to the 190 az.. Id. cut the trees down or at least get a serious shade analysis done. For a 3,500 kWh/yr. output, I'd get an 8 kW system. I'd increase that as a proportion of the output lost by shading, not necessarily as a % of lost irradiance.

Take what you want of the above. Scrap the rest.

[CharlieEscCA]

J.P.M. -> As always, thank you for the very detailed response. It helps greatly explain both how the tiered system comes into play (basically whenever your monthly overproduction, i.e. put into your credit bank, is less than the tier 1 kWh cap, you're getting tier one credit (less the .019xxx amount); and when you "draw" from that credit bank, if you stay under needing to draw below the tier 1 kWh cap, you'll be using up your credit (or owe if you run out of the credit) at the tier 1 rate -- go over the tier 1 cap ether putting in or taking out and you are dealing with tier 2 credit (less the .019xxx amount) or tier 2 cost. And T.O.U. same principal but a little more complicated -- peak over production yields great credits, but peak usage from the grid will eat away credit balance quickly -- this whole setup wants to drive as much solar production as possible to the peak period (currently 11 am to 6 pm, but subject to change).

Here's my initial thoughts.

1) I know oversizing does not "pay" -- I'm not looking for it to "pay" in the big picture.

2) I know I want to be able run the A/C a LOT more in the summertime, mainly to keep my my wife happier. But if I've got the system sized enough (even if it's oversized) to cover what she wants in terms of "not suffering", then I'm good with the size of the system I'm looking at and I'm good with the cost EVEN IF I have excess production at the annual true-up.

3) Having said #2, my real issue is I'm very uncertain what my usage might be if I "unleash my wife" to use the A/C as much as she wants (or as much as the added annual kWh supports). I've got a 3300+ sq ft open concept house with 24' ceilings in some places and 12' to 14' ceilings in other places. Good wall and ceiling insulation, but some original (30 yr old) "strange" windows that don't seal very well, and LOTS of windows -- but the heavy TALL eucalyptus trees that make roof solar a no go do provide good shading. And while in the San Pasqual valley it gets hot in the day, lots of time it cools off greatly such that you open windows at night, house is low to mid 60's, close windows in morning and it's not until early afternoon where house temps are in mid 70's. But then you get spells where it doesn't cool at night, or it's humid, and the house gets into the low to mid 80's and now the A/C is turned on (typically set to 81) and it's running pretty much non-stop until outside temp has dropped where I turn it off and open windows. I can count on for every day in a month I run the A/C even in this manner, the bill that month will be $20 to $40 more per day when the monthly bill comes.

4) Back to the economics, after the 30% tax credit, my annual bill is around 3K. While no one can predict future SDG&E rates, the odds favor them increasing over decreasing. But even if they stayed the same, I'm assuming that my bill (with what I believe to be a substantial production over current annual usage) is going to be very near the $10 per month minimum (yes there is the .02 / kWh charge for energy taken from the grid even if I net to a "zero kWh" for the year [and this is where the confusion on the various rate structures come into play]) -- thus even if usage stayed the same (i.e. I used the current 10K but produced 13.4K), in my way of thinking the system pays for itself in under six years if rates were to stay unchanged. But, with 13.4K annual production, I could, if I went 600 or 800 kWh over my average 800 kWh monthly average when A/C does not come into play for 4 or 5 months (which is my best guess on where my use might be if we used A/C more), then most of this "excess usage over current usage" I value at $0.39 per kWh as this is what I would have paid to SDG&E, and thus this would make to payback period much shorter than the "same usage" time frame.

5) I suspect you 6 kW for the 5 ton A/C is probably a pretty good estimate (I think I have 5 ton also). But your estimate of 180 hours a year usage seems lower than what I think my wife would want to use in the "use the A/C more" -- 180 hours gives you 10 hrs / day x 6 days per month x 3 months a year. But, I am going to try and do some spreadsheet estimates of guestimated usage by month against estimated production by month and see if I'm oversizing system more than I need to be doing for a happier wife outcome. And then, I'll also look at doing the T.O.U. spreadsheet as you have outlined.

So, bottom line, I think this is a go (I have the $ to do the investment) -- now it's time to figure out which contractor) leaning towards the $3 per watt I mentioned in my other thread (a licenced contractor in the business since 2004 with great reviews at this site) -- but I need to get over looking at the costs of the renvu dot com site for all the materials (the cost with CA tax and freight) except the galvanized steel pipes ("sourced locally") and see how much $$$ above this material cost the 3.00 per watt price is -- it sure seems like you could have a fence company put the footings in (I'm looking at a new fence in the front area of my lot, so have the fence company bid on doing the solar footings per Iron Ridge ground mount specifications, and have a landscape contractor bid the trenching (I have other landscape work I will be bidding), and then have a licenced electrician do all the electrical hookups including the conduit run to the house. But once the posts are in, the actual racking is actually very simple and straight forward with the Iron Ridge system (it's literally following directions and torquing to the specs), the wiring is pretty straight-forward for an Enphase solution [for a more or less self install, I'd go Enphase microinverters, where as the contractor install at $3.00 per watt would be SolarEdge SE7600. If I can price all this out and see I'm saving 2K doing so myself, I'd probably say it's not worth the hassle, but if it's 5K that's harder for my brain to accept -- and my gut tells me there's 5K or more to be saved so I unfortunately need to check it out...

And just to be clear, I think the electrical design (wire sizing, where disconnects need to go, etc) and the other design aspects are important / critical, I don't think doing the actual setup of the ground mount racking system and panel install AFTER the posts are in requires someone who has been doing this for years, nor do I think the module interconnection following the wiring diagram that would be provided by renvu dot com is all that difficult for someone who has interconnected 40 to 60 PC's and servers and done a significant amount of homeowner electrical work (garages, basements, etc) over many decades of home ownership in many houses in many states -- if I did this, I envision I can put the strings together and bring them to the junction boxes at the ground mount, and then leave the junction box to the panel wiring to the hired licenced electrician.

More stuff to investigate -- time to contact the AHJ and discuss inspection process if I decided to go "homeowner project" mode

[J.P.M.]

Charlie: You're welcome.

I'd respectfully suggest, if not already done, you get an energy audit. that will give you some idea of building HVAC loads. Also, download the "Solar Power Your Home for Dummies " book from the net - it's free if a bit dated. A newer version is ~ $ on amazon or the bookstores. Lots in there about energy loads.

And, as much of a PITA as it is, understanding the gory details of how tiered and T.O.U. billing works will pay dividends.

FWIW, my house never gets above 78 F. when I'm home. I'm pretty sure of the A/C use. House built in 1980, A/C ~ 20 yrs. old w/ C.O.P ~ 3.0. It'll die before I replace it.

I'd also be very choosy about contractors. Solar equipment is pretty much a commodity by now, but a poor install is still a real possibility. Choose a vendor with as much care as you choose equipment. $3.00/Watt for a ground mount may be a tight stretch if done turnkey. Perhaps your input can help bring the job in for a better price. Just get the county involved early.

Good luck.

[DanS26]

WOW...just WOW....this is what happens when we become dependent on government programs and programs pushed down onto the private and utility sectors. Everyone just reread this thread a few times and realize what the future holds if we let regulations get out of control. Just think about it for a few minutes............

[cebury]

Maybe I'm a bit obtuse atm but I don't see the WOW factor here. Missing Comic Sans?

[DanS26]

TOU...but TOU on steroids...lets get real CA.

[CharlieEscCA]

TOU...but TOU on steroids...lets get real CA.

You obviously do not live in CA

Our rates are on steroids here in the San Diego area -- non TOU or TOU.

It's a nice place to live, but it's an expensive place.

And yes, our state is doing everything they can to drive away businesses and kill farming.

[J.P.M.]

TOU...but TOU on steroids...lets get real CA.

I didn't make the rules, just know a bit about how the game is run. POCOs are trying to even out supply/demand by hitting folks in the pocket. The users are mostly ignorant of why pricing differential as f(time) exist and see it mostly as an attempt at price gouging, which may have a kernel of truth to it. The SDG & E's T.O.U. tariff for residential PV owners is actually rather simple to understand.

A perhaps ironic part of all this is that if customers knew how the system worked, they could, theoretically at least, influence at least the timing of the T.O.U. pricing and maybe some of the pricing differential by changing their use patterns. Eventually, pricing differentials a f(time) would go down. I suppose part of the logic POCOs use to justify high T.O.U. differential prices by hours is their claim that differential T.O.U. pricing helps by sending "price signals" (higher prices for high use times) to users which may reduce peak demand and increase off peak demand and in so doing avoid higher cost peaker power generation or expensive power buys. A simplistic example: If power was $0.02/kWh midnite to 5 A.M., a lot more wash would be done at night, and EV sales would increase. Off peak pricing would go up in response to demand and MAYBE, peak pricing would drop a bit. A social example of regression toward the mean.

[J.P.M.]

It's a nice place to live, but it's an expensive place.

And yes, our state is doing everything they can to drive away businesses and kill farming.

Ya' want nice, ya' pay nice. Try living in the rust belt. Things are real cheap. Nice (very nice) houses in Buffalo are ~ $150K. One big reason people come to CA is because it's warm and the sun shines, and there's no bunker mentality for the 6 month winter. Lived in both places. Buffalo people are nicer, but I'm not going back. Pay your money, take your choice.

[jflorey2]

And yes, our state is doing everything they can to drive away businesses and kill farming.

Doesn't take much to kill farming here. The state is mostly desert. And then people are shocked - SHOCKED! - when Colorado River water gets expensive and scarce due to the drought and the warming. And then when they pump groundwater out and the land subsides, they demand compensation as "victims" of the collapsing land.

I once spent a few days in El Centro, which is basically the middle of the desert. Cactus, cholla and a few palms, but mostly brown sandy desert. Miles of sand dunes off in the distance. We stayed next to a catfish farm - because they had "old" water rights.

On the plus side, lots of solar potential.

[Mike90250]

And don't forget Gov Arnold S signed all the "Green Energy" stuff, that is just now starting to kick in and close plants down. That imported power is expensive.