Effect on Income and the Financial Benefits Associated for Solar Installations

[slinthicum]

My solar installation was completed over 5 years ago and based on an extensive analysis, I've reached a point where I've been fully compensated for the cost of the installation and I'm currently enjoying the benefits of that decision. But things are likely to change, based on a direction that relates to the imposition of a minimum charge based on earned income. See the following article that explains what is being considered:
https://thesungazette.com/article/ne...sed-on-income/

In the article, its author quoting a statement made a UCB professor, wrote:
“Under this kind of reform, there will be winners and losers. Most low-income households will ‘win’ reductions in their electricity bills. Households like mine – higher-income households with rooftop solar – are the biggest losers.”

The way things appear to break down is all customers will pay a monthly grid connection charge that is adjusted based on customer income and not based on the quantity of electricity delivered to the customer. Thoughts?

[organic farmer]

A bunch of my neighbors are all pushing for Socialist changes.

They think that to make things 'fair' we need to tax the wealthy at least 80% of their incomes and seize all banks, all corporations, and all industries. Nationalize every capitalist endeavor and re-distribute that wealth to the poor. Provide free education, free housing, free medical care, free guaranteed livable wages [regardless of employment status]. When I talk to these people, and they list all of their demands, I point out that I have read the 25-point platform, and I understand it, but they always leave off the last point which is to annex Austria.

I recommend that you contact your legislators, and tell them how you feel about these changes.

[Mike 134]

A bunch of my neighbors are all pushing for Socialist changes.

They think that to make things 'fair' we need to tax the wealthy at least 80% of their incomes and seize all banks, all corporations, and all industries. Nationalize every capitalist endeavor and re-distribute that wealth to the poor. Provide free education, free housing, free medical care, free guaranteed livable wages [regardless of employment status]. When I talk to these people, and they list all of their demands, I point out that I have read the 25-point platform, and I understand it, but they always leave off the last point which is to annex Austria.

I recommend that you contact your legislators, and tell them how you feel about these changes.

The government did all of the above for the Indians how is that working out?

[organic farmer]

The government did all of the above for the Indians how is that working out?

I agree.

[PNPmacnab]

Society eventually figures things out. The wealthy will always make out better. Incentives like tax credits encourage growth in an industry and mostly increase the cost of a product temporarily. Might be time to pay back some of those incentives. There are those who get excited about things that haven't happened. There were those who hoarded light bulbs when the government took them away, complained about LED being expensive, short lived, poor color. Here we are today and the lamps are just fine. Those who thought they would sell back to the utility and make money are just freeloaders and shouldn't be worried about.

[SunEagle]

My solar installation was completed over 5 years ago and based on an extensive analysis, I've reached a point where I've been fully compensated for the cost of the installation and I'm currently enjoying the benefits of that decision. But things are likely to change, based on a direction that relates to the imposition of a minimum charge based on earned income. See the following article that explains what is being considered:
https://thesungazette.com/article/ne...sed-on-income/

In the article, its author quoting a statement made a UCB professor, wrote:
“Under this kind of reform, there will be winners and losers. Most low-income households will ‘win’ reductions in their electricity bills. Households like mine – higher-income households with rooftop solar – are the biggest losers.”

The way things appear to break down is all customers will pay a monthly grid connection charge that is adjusted based on customer income and not based on the quantity of electricity delivered to the customer. Thoughts?

Maybe it is time to make some changes to the state government and get the power costs reduced. Just saying since my cost is less then $0.09/kwh and has been for a long time.

[slinthicum]

When a forum's participant provides an argument that conflicts with their own pecuniary interest, it suggests there is merit. I fit the label "higher-income households with rooftop solar." Based on costs and return on investment I have chosen not to utilize local battery storage, but instead to utilize the grid for energy storage service, coupled with the fact that grid energy unavailability is a rare occurrence in my neighborhood.

For my geographic location (SDGE), once connected to the grid, the cost is not currently based on the distance from power resources, but based upon the quantity of electrical energy used. At true-up for the last 12-month period, I was fortunate in achieving a "net-zero" in terms of consumption of electrical power provided by SDGE. As a consequence, I paid substantially less for grid connectivity than other customers who did not have the benefits of having a properly sized solar system. Many of those customers lack financial resources that enable them to (1) own their own home, and/or (2) have the financial ability to pay the costs associated with purchasing a solar system.

Looking at this situation, not from my vantage point but from the point of renters and low-income earners, does the fact that I'm not paying my fair share for the benefits I enjoy as a consequence of grid connectivity make sense?

Thoughts?

[DanS26]

Here in the Midwest we have REMCs which stand for Rural Electric Membership Cooperatives. In the 1920's and 30's they were considered "socialist" or "communist" organizations. But they worked out well and are very successful member or customer owned organizations.

The members make the serious decisions about how they are billed. Many if not most have gone to billing schemes that separate the cost of electricity from the cost of delivering energy. I pay $0.09 per kWh but also $37.50 a month connection fee. Since the fee is fixed the low kwh users are subsidizing the higher usage members. It's not exactly fair but it works and most members are OK with the billing system.

What's happening in CA with the connection fee proposal based on income is just short sighted and will lead to much unintended consequences. There is a better method and I propose that the connection fee be based on the property value of the building or apartment being serviced. Owners and renters will see a fair charging system which separates the cost delivery from the cost of power purchased.

[RichardCullip]

There are a few things in my life that I pay for based on my income. Obviously my Fed and State income tax is based on my income. As is my Medicare payment now that I am of Medicare age. Indirectly my property tax is based on my income (or at least on my ability to buy the house I live in). Now the State of California has decided to add my connection to SDG&E's grid to the list of things I will pay for based on my income. The only detail left to work out is what the grid connection charge will be. SDG&E, SCE and PG&E have proposed a fairly high grid connection charge. I wonder what the final result will be once the CPUC approves a final plan? Personally I would rather be in a position to have a large grid correction charge rather than being poor enough to have a small to zero grid connection charge.

[slinthicum]

Richard, thanks for the response. Forum participants not enjoying the benefits of Medicare likely do not understand there is a higher cost for higher-income households (see https://www.rrb.gov/Newsroom/NewsRel...ePartBPremiums ).

[J.P.M.]

When a forum's participant provides an argument that conflicts with their own pecuniary interest, it suggests there is merit. I fit the label "higher-income households with rooftop solar." Based on costs and return on investment I have chosen not to utilize local battery storage, but instead to utilize the grid for energy storage service, coupled with the fact that grid energy unavailability is a rare occurrence in my neighborhood.

For my geographic location (SDGE), once connected to the grid, the cost is not currently based on the distance from power resources, but based upon the quantity of electrical energy used. At true-up for the last 12-month period, I was fortunate in achieving a "net-zero" in terms of consumption of electrical power provided by SDGE. As a consequence, I paid substantially less for grid connectivity than other customers who did not have the benefits of having a properly sized solar system. Many of those customers lack financial resources that enable them to (1) own their own home, and/or (2) have the financial ability to pay the costs associated with purchasing a solar system.

Looking at this situation, not from my vantage point but from the point of renters and low-income earners, does the fact that I'm not paying my fair share for the benefits I enjoy as a consequence of grid connectivity make sense?

Thoughts?

Since you're inviting thoughts:

1.) While holding a view that seems to conflict with their own interests - financial or otherwise - may show objectivity, such a position says little or nothing about the merits of the position taken.
I'd suggest that while such views may say something about the poster's objectivity and perhaps their grasp of the subject being discussed, the validity and/or merits of arguments, in and of themselves, have nothing, or at least very little to do with the parochial interests of the poster.

2.) I do believe the arrangement that Dan describes to be fairer and also better considered than income based electric bills as is being kicked around as a scheme for the CA IOUs. But given my opinion about income based billing, that's like damning with faint praise.
That's also not to say that Dan's utility billing situation may be the best or only solution, or indeed, that a problem exists that needs a solution in the first place beyond our collective ignorance to deal with energy use.

3.) From the reading, information gathering and experience I've done and had with respect to energy and its use over the last half century plus, it seems to me that a couple of very effective ways to get folks to use electricity and other energy sources more wisely is simply hit them in the wallet while at the same time making them aware of ways they can easily and readily understand how to mitigate that financial impact, and so how to reduce their energy use.

4.) A residential billing scheme that is based on income alone seems to me to be fraught with opportunities for mistakes, and fraud, and has the potential at least to be a nightmare to administer. In other words, a bureaucrat's dream.

5.) Besides that, residential energy use would only increase and bills will eventually rise as energy use rates go up to pay for the energy infrastructure needed to cover what will be the unrestrained energy use that comes with no financial responsibility or control over the bills for that use that income based billing alone will quickly lead to.

6.) Income based utility billing without some (financial) incentives and means for users to have some impact on their bills and so their use (in that priority) leaves out one of the best and most effective means of coming to grips with this energy use business.

7.) That is not to say however that the draconian disincentives of the type and severity of the current CA T.O.U. billing schemes are a workable solution if for no other reason than they seem to do little more than add more difficulty in understanding billing but not much to helping to get bills (or usage) under control.

8.) For a rate making philosophy and any follow on rate structure to work, among other things, I'd suggest there needs to be goals of being viewed as fair minded and fairly administered by and for all parties, not impede energy procurement, be understandable and also provide ways for users to at least have the perception they have some control over their energy bills.

[slinthicum]

Buried in my posts was a specific choice. Here in California, I could have elected to go "off-grid" and avoided continuing my status as an SDGE customer (see https://energytheory.com/is-off-grid...Dgrid%20living. ). To effectively do that, particularly during winter months when solar generation wanes, I would need to cut consumption or utilize costly alternative generation resources and energy storage equipment. Far less expensive is my current approach, utilizing "the grid for energy storage service". Is SDGE's current billing structure, where I'm not having to pay what others might suggest is a fair cost for this service, fair to other SDGE customers?

[foggysail]

Society eventually figures things out. The wealthy will always make out better. Incentives like tax credits encourage growth in an industry and mostly increase the cost of a product temporarily. Might be time to pay back some of those incentives. There are those who get excited about things that haven't happened. There were those who hoarded light bulbs when the government took them away, complained about LED being expensive, short lived, poor color. Here we are today and the lamps are just fine.

Those who thought they would sell back to the utility and make money are just freeloaders and shouldn't be worried about.

AHHhhhh!!! Now I understand! Commercial solar farms ''growing'' where ever there is available land such as along highways to sell their products to utilities is just fine while a guy who installs a few extra panels hoping to sell whatever ts not used back to his POCO is just a greedy freeloader. Yeah....sure

[SolTex]

I find this thread very thought provoking. We live in a deregulated part of TX where we have a limited choice of energy providers. Under our current 3-year contract with Chariot Energy, we can zero out our monthly electric bill as long as we export sufficient excess solar power to the grid. Some months we do - some months we don't. But the point is, although we are by no measure "rich", we were financially able to afford the cost of a nice PV system including some storage. To enable the measurement of power imported and exported, our digital electric meter had to be modified to record two channels of data. There was no charge for having our meter modified. Which brings me to my suggestion for a way to "tax" the owners of solar systems. Rather than basing the "solar fee" on earned income, simply charge a fixed extra monthly fee for having a 2-channel meter. Property owners who have solar would pay the extra fee - those without solar don't pay it. This would, of course, lengthen the time to achieve ROI, but seems to me more fair than a income based sliding penalty. Is this solution too simple minded?

[J.P.M.]

Buried in my posts was a specific choice. Here in California, I could have elected to go "off-grid" and avoided continuing my status as an SDGE customer (see https://energytheory.com/is-off-grid...Dgrid%20living. ). To effectively do that, particularly during winter months when solar generation wanes, I would need to cut consumption or utilize costly alternative generation resources and energy storage equipment. Far less expensive is my current approach, utilizing "the grid for energy storage service". With SDGE's current billing structure, where I'm not having to pay what others might suggest is a fair cost for this service, fair to other SDGE customers?

What you're doing is no different than what most every other residential PV customer with an NEM agreement with their POCO is doing - using the POCO and their grid as a storage device of effectively infinite capacity - nothing new there, but I doubt if few POCO customers realize that's what they're doing or think it through.
Seems like sort of an almost unrelated side issue to me.

Other than you can't have one without the other, I'm not sure what the connection is between using the grid as an infinite storage capacity scheme and having an NEM with a POCO and the arguments for/against NEM or its "fairness", or that what may be considered grid storage is somehow
unfair to non-NEM customers.

What does seem unfair to me or at least low/no class (but not surprisingly) is the way the POCOs seem to want to paint NEM users as villains who are taking money out of poor people's pockets and getting over like fat rats in a cheese factory to deflect criticism and heat away from investor owned POCOs and their stockholders who seem to be doing OK.

Whether or not any of this is fair will probably never cease to be discussed. I doubt however if most opinions will be objective about it.

While talking about (lack of) fairness (if you're poor): Why are so many/most NEM residential customers located in affluent neighborhoods ?
Look out a landing airplane's window for quick if anecdotal confirmation on that one.

While there's enough blame for all sides in this mess, this whole idea of fairness is a still a red herring sideshow with the POCOs as the carney barkers.
While having some validity, blaming NEM customers for high rates is no more than the POCOs' attempts to change the narrative, take the blame and the heat off the POCOs for high rates and put it onto NEM users. What transparent B.S.