Solar Energy Companies Say Edison Burns Their Customers, Business

The California Solar Initiative was supposed to encourage solar photovoltaic installations, but PV companies say the exact opposite is happening in Southern California Edison's service territory.

According to the California Solar Energy Industries Association, Edison's high time-of-use rates-34.3c/kWh for summer, on-peak usage-are driving away solar PV customers. The utility's standard residential rate begins at 11c/kWh, but under the CSI, photovoltaic customers must be on TOU.

"You spend $30,000 on a PV system, you don't expect your energy bill to quadruple," Sue Kateley of CalSEIA told California Energy Markets on Wednesday. She estimated that the solar PV business was "down by half" in Edison's service territory. CalSEIA has about 100 contractor members, and 75 percent of them install panels in Edison's area.

Gordon Bloom, executive vice president of GenSelf Corp., which sells and installs solar PV panels in Southern California, said that Edison customers represent 80 percent of GenSelf residential installations, "and that has been completely shut down."

"Our Edison residential business has basically gone to zero," said Bloom, whose company usually does 100 solar installations a year or more. "We have a few people who are signed up, but they don't want to do the job until mandatory TOU goes away."

As outlined in SB 1 signed into law last year, the $1.7 billion CSI program adopted ratepayer-subsidized incentives to encourage the installation of 1,750 MW of solar PV by 2017. In a March 2 petition, PV Now, a coalition of solar companies, asked the California Public Utilities Commission to modify a December decision implementing SB 1. As part of that decision, the CPUC mandated that new CSI applicants must take service on existing time-of-use tariffs but agreed to further explore TOU tariffs in utility rate cases or another appropriate proceeding [D06-12-033].

PV Now argued that Edison solar customers that "use more than 4 percent of their annual electricity during peak times would be better off under a flat tariff" than the utility's TOU rate. The group also argued that SB 1 "plainly directs" the commission to develop a TOU tariff.

In comments Edison submitted in December to the CPUC, the utility argued that a commission-adopted TOU rate would "turn the language of SB 1 upside down." The law "was not a directive to design a TOU rate that would provide the maximum financial incentive to solar customers," the utility stated. It added that its TOU rates "already provide a price signal to encourage customers to install solar energy and self-generation systems."

On Thursday, however, Edison spokesman Tom Boyd told CEM that the utility was now "conducting an analysis of our rate structure as it relates to the solar initiative" and would share results with the CPUC.

Southern California legislators have also hopped into the debate. In a Feb. 26 letter to the CPUC, Assemblymembers John Benoit (R-Palm Desert) and Bonnie Garcia (R-Cathedral City), along with Sens. James Battin (R-La Quinta) and Denise Ducheny (D-San Diego), complained of Edison's TOU rates.

"Customers who install a system that provides less than 100 percent of their electricity demand are shocked at the prices they must now pay for electricity as a result of the TOU rate requirement," stated the letter. "Many who have installed a solar energy system are now faced with paying electricity bills significantly higher than the bills they paid prior to their major investment in solar energy."

The legislators said their districts "have a large retiree community and high summer cooling costs. Our constituents . . . should not be penalized because they could not afford or accommodate a solar energy system that provides 100 percent of electricity demand."

In a March 6 letter to Benoit, CPUC President Michael Peevey agreed the situation "is an unfortunate and indeed perverse result" of the TOU requirement. He added that the commission would work to identify a solution, and is "100 percent committed to creating a solar program that drives solar installations and moves this industry forward."

In an attachment to the PV Now petition to modify the CPUC's decision implementing SB 1, Bloom said Edison's TOU rate "is particularly bad for smaller users whose usage never leaves the lower tiers under the standard domestic rate. Many solar electric systems sold are not sized to eliminate the user's entire electrical usage."

PV Now also complained that Edison's TOU rate for winter-peak usage, 21.9c/kWh, hurts solar customers. PV systems would be producing more power than needed then, but would be credited with a lower rate.

CalSEIA previously complained about Pacific Gas & Electric's new residential TOU tariffs, saying they extended the payback time for solar systems by 25 percent.

PV Now, however, stated that PG&E is approaching a settlement in Phase 2 of its general rate case for solar TOU rates that "are an improvement" over current ones. In addition, San Diego Gas & Electric is also designing solar, time-variant rates for its upcoming rate case.

Bloom said Edison refused an offer to join solar companies asking the CPUC for a temporary stay of the TOU requirement, which was a "small line item" in the commission's decision implementing SB 1 that "no one caught." While regulators try to fix the law, "groups will go out of business in the meantime" [Chris Raphael].



Copyright © 1996-2006 by CyberTech, Inc. All rights reserved.