Solar Net Metering & Time-of-Use
Solar billing rate schedules in Pacific, Gas and Electric territories. More great ways to save money can be found on the Solar Rebates and Tax Credits page.
Grid-tied Solar System Credits and Net Metering
Grid-tied solar homes push power back onto the grid during the sunny periods of the day and draw electricity from the grid as needed at night. When the meter spins backwards, extra electricity is credited to your account at the retail rate. Solar electricity produced by modern inverters is high quality (true sign wave). It is produced locally and not subject to distribution shared uses and transmission efficiency losses from transporting energy over long distances. The excess AC electricity is pushed back onto the grid for your neighbors to use during the day when the meter spins backwards.
At the end of each year (at the true-up annual billing cycle), if your solar system is sized to zero out the electric bill, you will not pay anything (other than the minimum monthly meter charge). Otherwise you will be billed for the electricity used in excess of what is generated (based on the value of this electricity at the time it is used or generated). As of May 2009 PG&E customers are not financially paid for energy production that exceeds usage for this annual billing period (although there is a bill in the California state legislature, AB920, that is designed to reimburse solar customers for excess energy production). A contract arrangement between you and your electric company is called a net energy metering interconnection agreement. This billing arrangement is a key reason why it is financially attractive to own a PV system. In California there is a net metering state law that requires utilities to credit one's electric bill at the retail rate for grid connected PV systems. Billing is done annually which means that electric credits accumulated during summer periods of maximum sunshine can be applied to night time and winter electric usage.
All PG&E customers must pay a minimum monthly electric meter charge (which varies between $5 to $12) to be connected to the grid, even if all electricity usage is netted out by a PV system. (Refer to ABC's of Net Metering.pdf)Time of Use Billing with Solar
For residential PG&E customers who choose a time-of-use meter (using the E-6 rate schedule) the credits banked during summer on-peak periods (1 PM through 7 PM) are more than 3 times greater than off-peak rates paid for electricity at night. The PG&E residential E-6 rate schedule has a partial peak period (10 AM till 1 PM and 7 PM till 9 PM during week days with another partial peak period from 5 PM till 8 PM on weekends during the summer period). The concept of having on peak and partial peak periods is to better reflect the utility costs of generating power at various times of the day when demand is high. The summer period is May 1 through October 31. During the sunniest times of the year, when a PV system is generating the most energy, the value of this energy in terms of retail price credits is much higher using a time-of-use electric rate schedule. This is a key reason why PV systems are financially attractive. This enables one to zero out the electric bill by installing a smaller system (about 28% smaller for south facing arrays using the E-6 rate schedule). During the winter billing periods (Nov. 1 through April 30), the on-peak and off-peak electric rates vary slightly with on-peak being about 10% more expensive than off-peak. Since the sun's energy is less during winter (due to clouds, sun angle and shorter days), these less valuable price credits reflect the sun's availability. Ask for a financial analysis that considers your particular energy usage profile, as in some cases it may be better to stay with your existing rate schedule (especially if a solar array is facing east), then to opt for a time-of-use rate schedule.
The idea is to conserve energy during on-peak rate times, so the meter spins backwards as fast as possible and to use energy at off-peak times when it is cheapest. For working families who are away from home during the day, this rate structure is easy to live with and thus maximizes energy credits with minimal need to change energy use habits based on time of day. Those who stay home during the week have a financial incentive to schedule the heaviest electric use during the off-peak periods when electric rates are lower.
Download "Net Energy Metering: Understanding your bill" a fact sheet on how to read your monthly PG&E statement for the E6 time of use rate schedule currently offered to solar customers.
Currently PG&E customers are required to pay a minimum meter charge of about $12 a month under the E6 time of use rate schedule.
Solar power may be less expensive than PG&E Electric Retail Rates
The cost per kWh of a solar electric system when amortized over a 30 year economic lifetime (after factoring in current California financial incentives) is typically less expensive than current PG&E retail electric rates. This is especially true when factoring in electric price inflation. (refer to PG&E E1 Rate Graph).
How does one calculate the life cycle cost of electricity for a PV system? One way this can easily be computed is by dividing the after rebate cost of a PV system by the number of kilowatt hours (kWh) the system is forecasted to generate during its estimated useful life.
According to the Clean Power Estimator, a PV system on a south facing 20 degree slope will generate 1,700 kWh per rated AC kW each year in Santa Clara County, California. A residential sized 3 kW solar system can be installed for about $15,000 with California rebate levels of $1,500 per kW and the 30% federal income tax credit. A formula to compute the cost per kWh over a 30 year period is:
$15,000 ÷ 3kW X 1,700 kWh per kW per year X 30 years = $0.10 per kWh
Thus over a 30 year period, the cost per kWh of electricity for a 3kW PV system is about $0.10 per kWh. As of May 2009. PG&E baseline rates are about $0.12 per kWh. The rate charged for electricity in the higher usage tiers is much higher. As of May 2009 the top tier, or tier 5, (the category for electricity used at 3+ times the baseline rate), is $0.44 per kWh. Thus solar electric system costs are slightly less than baseline PG&E rates and significantly less than electric costs in upper tiers. Thus the net value of a PV system exceeds its costs for residential electric consumers in PG&E territory. For homeowners, with a sunny location, solar power can be a "no brainer" to save money when considering life cycle investment benefits vs. costs. (Refer to Solar Value.pdf)Pacific Gas & Electric Residential Electric Rate Schedules
PG&E offers several residential electric rate schedules. A Time-Of-Use (TOU) schedule normally benefits solar customers the most, because electric rates are highest during on-peak periods and this correlates nicely with peak summer sun, also winter rates tend to be low and this also correlates well with lower solar output levels and during the winter more energy is typically used than is generated by a photovoltaic (PV) system. Each of these schedules have tiers that charge more for energy as more energy is used. For solar customers with properly sized PV systems designed to zero out the financial portion of the electric bill, lots of energy is billed or credited at the Tier 1 rate. Here are the most common residential electric rate schedules in PG&E territory:
E-1 This is the standard rate schedule used by most residential customers who do not have a PV system. This schedule has multiple tiers with various rates. With this schedule the more energy you use the more you pay. This is not a TOU schedule, as electric rates are the same throughout the day (i.e. rates do not vary with time of day use).
E-6 This TOU schedule is currently the rate schedule used by virtually all new residential solar customers as of January 2008. There are on-peak, partial-peak and off-peak periods with this schedule. The on-peak period generates valuable credits at about three times the off-peak period. With the exception of the E-9 schedule this is the only TOU rate schedule that residential PG&E customers can select as of 1/1/2008. •UnderstandE6bill.pdf
E-7 This TOU schedule has on-peak and off-peak periods. This schedule is closed to new solar customers as of 1/1/2008.
E-8 Residential seasonal rates. This a non-TOU rate schedule and it is closed to new customers.
E-9 Experimental TOU residential rate schedule for low-emission vehicle customers. There are on-peak, partial-peak and off-peak periods with this schedule. The off peak rates on this schedule are very low which works well for charging electric vehicles. The on-peak rates are high with E-9, however the E-9 on peak times may not benefit solar customers as much as the E-6 rate schedule would, under most circumstances.
New solar customers, choose a PG&E rate schedule for the Net Energy Metering agreement that is submitted to PG&E. PG&E installs a digital meter that records energy flow in both directions.
Here is how to read the E6 electric meter
Here is a PG&E E7 fact sheet on how to read the E7 electric meter.
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