CPUC removes mandatory time-of-use rates for solar customers

Michael Peevey,
San Francisco, CA, U.S.A. — (METERING.COM) — June 20, 2007 – The California Public Utilities Commission (CPUC) has removed the state Solar Initiative’s time variant pricing requirement until time-of-use (TOU) tariffs are developed in the next general rate cases of utilities in 2009.

Under Senate Bill 1 (SB1) all California Solar Initiative incentive recipients are required to take TOU rates, which value daytime peak energy usage and production higher than off-peak energy usage at night and in the morning. Most solar customers benefit from TOU rates, because solar production replaces peak load and is credited to the customer at the higher cost peak price.

However, some customers, who have high daytime electric use but are unable to install a solar system to meet 100 percent of that demand – for example those in hot, dry desert climates where air conditioning load drives demand, and who must buy their remaining electricity at the higher, daytime peak TOU rate – had discovered that their electric bills on TOU rates could be higher with solar than if they stayed on their existing rate without solar. Similarly, for other customers, even though their bills with solar would be lower, the TOU requirement could reduce the amount of those savings substantially and dramatically increase the payback period of a solar system.

To alleviate these consequences, Assembly Bill 1714, passed by the State Legislature on June 6 and signed by Governor Schwarzenegger the following day, allows the PUC to delay implementation of the mandatory TOU requirement.

“The TOU requirement contained in SB1, though well-intentioned, has clearly resulted in some unintended consequences, which may slow the development of solar in the residential and small commercial markets,” said CPUC president Michael Peevey.
California has a goal to install 3,000 MW of new, customer-sited solar projects by 2017 under the California Solar Initiative.