Despite San Diego’s reputation as a solar mecca, San Diego Gas & Electric and the rooftop solar industry are consistently at odds.
In some ways, the game is rigged for these two to be foes: Rooftop solar has grown rapidly with the help of incentives and mandates, forcing SDG&E to integrate it. State requirements have ensured disagreements between the two play out publicly at the statehouse and at the Public Utilities Commission.
SDG&E has long argued, for example, that solar customers aren’t paying their fair share for use of the power grid, an argument being pushed by utilities across the nation. The solar industry and its supporters say SDG&E’s missing the big picture and discounting the value of rooftop solar, which allows everyday San Diegans to help the region reduce its greenhouse gas emissions.
That’s far from the only dispute, though.
Here’s a breakdown of the realities contributing to SDG&E’s strained relationship with the solar industry.
More rooftop solar means more unique pressures for the grid.
Power from rooftop solar panels isn’t as predictable as power from traditional sources. It’s intermittent. Sometimes there’s not much of it. Sometimes there’s even too much of it.
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The utilities hate solar because they service the fossil fuel industry. At http://www.sullivansolarpower.com, we work to help San Diegans declare independence from the fossil fuel industry. Sullivan Solar Power has been fighting for solar customers for years and will continue to do so for years to come.
A friend who used to work for SDG&E told me that he was once told by an executive that SDG&E would start supporting local rooftop solar "when we can put a meter on the sun". The utilities like huge solar farms out in the desert, since they can sell that power to their local customers. They haven't yet come to terms with local customers making their own power via rooftop solar. They see that as competition cutting into their own electricity sales, despite the fact that their energy sales and allowed revenues were decoupled decades ago.
Good summary. The biggest challange I see after reading this is that all Power Utilities are required to buy power when it's generated at the retail rate, and not a wholesale rate. Net metering does that. The wholesale rate for daytime electricity for residential areas is far less than the 42 cents a KWH that SDG&E is required to pay for it. May be as little as .20 cents a KWH.
When a individual is buying electricity on demand, they are paying retail rates. Since SDG&E needs more power in the evening for residential areas, they have to create or purchase that power. They buy it at a wholesale rate, mark it up, and sell it at a retail rate. This is business 101. When they buy solor generated electricity at retail at noon, and sell it at retail at noon, not much profit there.
The big issue is that SDG&E are REQUIRED to buy at retail rates, even if they don't want or need it at that time. Any time you require a business to buy something at a price that is not sustainable you will get pushback.
Fix net metering pricing and SDG&E becomes a solar advocate.
Mr. Younger: I'm curious about your calculations. I don't think there is any time that SDG&E can't use power generated by home generated solar energy (at least currently). Perhaps you have information on that? On the fees, here's what SDG&E says. Could you elaborate in context of this?http://www.sdge.com/clean-energy/overview/overview-nem-rates
@Chris Brewster Hi Chris,
The primary point I was trying to make (and did not do very well) was that if SDG&E is required to buy power at the retail rate, and control it/ move it to where it is needed, to only sell it at the same retail rate; There is no way that business transaction is sustainable.
Better for SDG&E to buy power at a wholesale rate and sell it at a retail rate. That is a more sustainable business model for them. If Net Metering replecated the wholesale and retail costs it could work.
As Mr. Brewster notes, the true bottom line here is the fact that SDG&E is an investor-owned utility, not a publicly-owned one. They must protect their owners and their profit even at the detriment of their customers. Until this is changed, we the people will always come out as losers.
Couple that with the obvious and continuing collusion of the state regulatory agency and we ratepayers -- solar and non, large and small -- are screwed.
It's important to always keep in mind that SDG&E is a company that exists primarily to make a profit for investors. It is not a utility in the sense that most of us understand utilities, such as the water department (i.e. nonprofit entities). Its PR people exist to tell a story that benefits its profit model.
As Ms. Halverstadt notes, SDG&E only makes money by building things and maintaining things. Thus the more they build and the more they maintain, the more money they make. Solar (and other renewables) reduces the amount of power generation needed in the aggregate and thus has the potential to reduce the need to build power generation infrastructure. That would reduce future profits. While SDG&E likes to imply a genuine concern for ratepayer equity, the real concern is likely corporate profits (which are guaranteed under the investor owned utility model in California).
There is little question that there are peaks in power that ramp up mid-day and extend into the evening. Part of this occurs at times of day that solar production is low or nonexistent. Nevertheless, there is tremendous value to the community at large when solar offsets fossil fuel generation needs for air conditioning, for example, which coincide with sun and solar power generation. As technologies emerge that allow for efficient energy storage, excess solar generation during the daytime will be able to be used at night. That is the real threat to SDG&E's profit. That may be why we hear so little from SDG&E about finding ways to store excess energy for nighttime use. It's not in their best interest. It's only in ours.
So SDGE says the peak demand is at 8 at night, and not during the day when businesses are operating? Why do I have a hard time believing anything SDGE says?
@Gordon Wagner I noticed the distinction in the article about residential production and residential consumption. I find it hard to believe SDG&E can send electricity produced via residential and have it used only by residential customers. Most businesses are open during the day when rooftop production happens. Even though residential peak demand is greatest at night, many businesses are closed in the evening, offsetting that overall demand.
@Gordon Wagner Many of SDG&E's non-residential customers are on time-of-use meters and pay much more for peak power, which used to happen during business hours. Photovoltaic power is now shaving the mid-day demand peak; given enough photovoltaic installations, demand for the utility's power becomes flattened. Within a few years there will be no meaningful peak!
Gordon you are SO correct! SDG&E is offering a lot of rhetoric; the whole concept of 8PM peak demand is laughable non-scientific mumbo-jumbo dreamed up in a Sempra boardroom. Did you notice that it was put up as a straw-man concept with no hard facts to support it?