ORIGINAL REPORTING: A New Approach To Rooftop Solar Support

SMUD on the Verge of Net Metering Breakthrough

Herman K. Trabish, September 7, 2021 (California Current)

Editor’s note: The SMUD Board approved this plan and it is being held up as the direction state regulators need to take in providing a successor tariff for solar statewide.

The Sacramento Municipal Utilities District is considering a multi-faceted rate design that reduces the retail compensation to solar owners but adds features to drive the growth of solar plus storage. The proposal by staff includes a critical peak pricing rate that will give customers a very high per-kWh price for supplying generation stored in batteries at critical periods of demand when solar generation is reduced, like after sunset.

It also includes an upfront rebate that will help customers cover the high cost of adding a storage system, and programs to low-income customers for offsite local solar system investments.

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“Retail rate NEM transformed the market and brought solar into the mainstream, but it is not good for the industry to argue that there hasn’t been a cost shift at SMUD,” solar advocate Vote Solar Senior Director for Grid Integration and former SMUD board member Ed Smeloff told Current. SMUD’s “new outside the box NEM design couples a reduced rate with incentives for storage to create more value.”

Under SMUD’s current $0.12/kWh retail NEM credit, solar owners may be paid $0.05/kWh to $0.09/kWh more for their electricity than its value to SMUD, according to a disputed Energy and Environmental Economics (E3) Value of Solar study. That now adds up to $45/month for the average non-solar owning residential customer and could cost them $90/month in 2030.

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“We’re encouraged that the proposal seeks to engage solar and storage customers to meet SMUD’s ambitious climate goals,” Tesla Managing Policy Advisor Damon Franz said at a public SMUD meeting. He praised SMUD’s critical peak pricing, virtual power plants, and other incentives for storage. The new NEM proposal appears to align with Tesla’s business model focused entirely on solar plus storage systems.

In addition to Tesla, public endorsements have come from leading battery provider STEM, the California Energy Storage Association, the Natural Resources Defense Council and the Environmental Defense Fund. Some solar plus storage proponents have concerns about Sacramento’s net energy metering proposal because it could contract the overall solar market… click here for more

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