PG&E and Solar

Understanding how (and why) PG&E Quietly Subsidizes Solar

Residential Electrical Pricing: Net Metering

One of the great things about solar is that it creates energy when the PG&E grid most needs it: daytime in the summer.

Net Metering is an option that PG&E offers solar panel owners. It helps PG&E, since PG&E benefits by your summer daytime production. And it helps you, since you’re able to use PG&E as a giant battery, giving them your extra power when you don’t need it, and taking back power when you do need it.

Two time-shifts are taking place: a daily trade of daytime production for evening consumption, and a seasonal trade of long summer day production for long winter night consumption.

Net metering gets really interesting when you combine it with time-of-use rates. That’s because PG&E will buy any extra power produced at the retail rate in effect when that power is produced. That means that, on weekday afternoons, PG&E will buy your excess production for as much as 31 cents. And when you get home at night, you’ll buy back the energy you need at the rate in effect at that time — perhaps 20 cents, and as low as 12 cents, if it’s late.

Is paying homeowners 31 cents per kilowatt, when the wholesale rate for energy is about 4-7 cents a kilowatt-hour a subsidy? It sure seems like it, though averages hide a lot of information. If PG&E is forced to switch on — or even build — another plant, the incremental cost for that mid-day energy may very well be similarly high.

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