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The Million-Dollar Question (As originally published in The Danville/Alamo/Lafayette Today Newspaper, May 2013)

Read Original Newspaper Article PDF here

I’am a big fan of the program Who Wants to be a Millionaire? I think it’s inevitable that sometimes soon the million-dollar question will be, “I see you are in PG&E’s service area. Please tell me what you are paying for elctricity?”

For most of you, your answer(for million bucks) may be “I’am paying a tiered rate.” As we know, the more energy we use, the more we pay per unit (kilowatt) of energy used. It’s called “progressively increasing price points.”

Unfortunately, it’s not as simple as that. PG&E’s progressively increasing price points change based on which utility rate and territory the customer is in. The price points also change daily, by time of day, and seasonally. All residential (and soon all business) rates have “tiered and time of use attributes.” Weekdays cost more than weekends, and summer costs more than winter. Daytime costs more than nighttime, but not always, because it depends on one’s usage.Some kilowatts cost as low as 3.8 cents, and some cost more than 55 cents. The difference in cost depends on your utility tariff and your “tiered and time of use” habit patterns of electric use. As you can see, all kilowatts are not created equal.

Wouldn’t it be nice if there were “frequent flyer miles” when spending more for energy? Many of our customers may have never gone solar had such perks been forthcoming. In reality, PG&E would rather you use less energy than more. Energy demands keep rising, and power generation is not rising to meet the demand. Stabilizing and managing the grid and having reliable energy sources to provide energy to the grid are top priorities for PG&E.

For this reason, solar and PG&E happen to make excellent yet seemingly strange bedfellows. This PG&E/solar partnership is mutually beneficial.The grid’s energy demands and customer’s energy costs are highest from May through October. Not so coincidentally, solar power systems have their highest outputs during these months as well. For PG&E, excess energy is expensive to generate, and it’s difficult to transmit and manage, especially during hot days. Non-solar customers are penalized by a higher cost of electricity during these summer afternoon hours. Solar customers are incentivized by PG&E to generate and export power to the grid during these higher cost summer afternoons. The old moniker “buy low and sell high” is the simplest description as to how solar system generate excellent financial return for their owners. For nighttime car charging, for each solar kilowatt sent to the grid during the day, I get credited multiple kilowatts back at night. Car charging is essentially free for me because solar is able to leverage the peak vs. off peak energy costs. PG&E is indeed selling my excess solar generation to my neighbors, and they’re possibly marking it up as well. The “mark-up” of course depends where my neighbors are on the “tiered and time of use” continumm at that moment in time. Solar systems save PG&E money in energy generation and transmission costs.

Much like the other 147,366 California solar customers,(as of April 18th)I saw no return on investment with monies paid to PG&E. I’d rather be an energy provider, and I’m happy to know that on most days, I’m providing clean energy to my neighbors while being compensated nicely by PG&E for doing so. It’s a great partnership.

Since businesses haven’t voluntarily reduced energy use during peak hours, they’re being forced to switch to time of use electric rates, which will be fully implemented by November 2013. I have a feeling this transition to time of use rates for business will generate more solar business as a customer tries to escape the ever rising cost of energy. Hedging energy costs by “going solar” is one of the few stable and safe investments with reasonable returns still around. PG&E and solar, strange bedfellows indeed.

By Mark Becker, GoSimpleSolar

Mark Becker is the President of GoSimpleSolar, by Semper Fidelis Construction Inc, a Danville based Solar Installation Firm(License 948715). Mark can be reached at 925.915.9252. Visit GoSimpleSolar’s showroom at 114 West Prospect Avenue in Danville or www.GoSimpleSolar.com, or email Mark@GoSimpleSolar.com.