From Keeping Current - CCEnergy's newsletter, Summer 2002 Edition

Slashing Utility Bills

by Peter Asmus

Jim and Grace Weaver of Escondido forked out $40,000 to install their new solar system, but expect to get roughly half of that back in the form of a state rebate check. "We didn't want to be independent of the grid, but we didn't want to be slaves to it," Jim said, summing up the appeal of grid-connected solar and wind systems. "We kind of like watching our meter run backwards," he added, referring to the state's net metering law that lets residents bank excess electricity with their utility for later use. (Read more about pending legislation that will affect net metering.)

If a customer's system is sized to supply as much electricity as a customer otherwise uses on an annual basis, the customer could avoid most of their utility bill and end up paying only the monthly customer charge. Thus, the net metering program values all the electricity produced by the solar PV or small wind system at the retail rate. But here's a cautionary note: most of California's private utilities do not pay for surplus electricity not used within the 12-month true-up cycle. In other words, if over the course of one year's time you wind up producing more than you purchase, the utility will not pay you for that extra amount of power. But it does mean that you could have a $0 electricity bill after adding and subtracting each monthly bill over this time period.

Generally speaking, it does not pay to oversize a PV system beyond what a customer could use in a year. Still, connecting your renewable energy generator to the grid not only cuts your power bill, but also supplies the state's grid with much needed clean peak power. Solar PV and small wind turbines can also reduce your electricity consumption so that you may avoid costly future rate shocks. Your new solar or wind installation can serve as an insurance policy against future hikes in electricity rates.

Another happy solar PV customer is Kenneth Lot of Mariposa, a rural former gold-mining town located in the Sierra foothills at roughly 3,000 feet elevation. Though he would have purchased his 920 watt PV system without a rebate check from the California Energy Commission, Lot is grateful that state funds helped make his solar energy purchase more affordable.

He purchased the solar system to ensure reliability and back-up power for his wife's beauty salon. "My wife really couldn't stay in business without this system," he acknowledged. Even before last year's headlines regarding power outages, the Lots were accustomed to power losses that could last a day or two due to extreme weather conditions.

Solar PV panels have reduced their monthly electricity costs by 30 to 35 percent throughout most of the year. Lot is so pleased with the performance of his solar panels, he wishes he had purchased enough to generate twice the electricity he now gets. "I sell real estate and I've been pushing solar to many of my prospective clients. It typically costs the same amount of money to install a new solar system as to extend a power line," he noted. "With solar PV, however, you have an alternative source of power and you are not tied into the high cost power on the grid."

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