"Once we go solar, we'll now be able to use as much electricity as we want, right?"

Just after deciding to move forward with solar projects and just after beginning to feel the excitement that accompanies going solar -- many of my customers often call me up with one more question:

"Once we go solar, we'll be able to use as much electricity as we want, right?"

And my reply is often:

"Well, yes and no. Let me explain..."

You see, people ask this question for a variety of reasons. Some believe they'll be restricted by the utility company to using the electricity they produce with their system while others believe they'll  be able to use an unlimited supply of electricity now that they've gone solar. There is often confusion about what happens after installing a system...

"...and what's the deal with my meter spinning backward? Is that normal?"

And my reply is:

"Yes, that's a very good thing. Let me explain further!"

The utterly amazing thing about going solar is the fact that you're not restricted to using any specific amount of electricity. In other words, if you care to conserve, you're free to do so and if you'd like to run your air conditioning in the summer and plug in an electric car, you're certainly welcome to go that route. In essence -- just like a regular utility customer -- solar allows you to conserve or use as much electricity as you'd like. Only the benefit is much more exciting for solar customers.

Here in San Diego Gas and Electric territory, customers use what is called a "tiered system" where the lower tiers cost less to use and the higher tiers are more expensive. Prior to going solar, if you conserve and use less electricity, your bill not only goes down because you're using less power from the grid but also because the power you're using is from the lower, less expensive tiers. Seems pretty logical, right? 

Here's the tiered structure for SDG&E:

Tier 1 (baseline)                            ...  14¢ per kilowatt

Tier 2 (101 - 130% of baseline)  ...  16¢ per kilowatt

Tier 3 (131 - 200% of baseline)  ...  29¢ per kilowatt

Tier 4 (over 200% of baseline)  ...  31¢ per kilowatt

Use more electricity, pay higher tiered prices. Conserve and save money not only from using less, but also from paying lower rates on your electricity.

So let's play out a few scenarios and find out what happens in each of these situations.

First, let's examine a house without solar which

uses 1,000 kWh each month. From the SDG&E website:

 

		Total Rate	kWh used	Estimated Billed Amount
Baseline	Tier 1	14¢	336	$47.04
101% - 130% of baseline	Tier 2	16¢	101	$16.16
131% - 200% of baseline	Tier 3	29¢	235	$68.15
Over 200% of baseline	Tier 4	31¢	328	$101.68
Totals			1000	$233.03

So, a customer who uses 1,000 kWh per month, prior to going solar, would be paying, on average, $233.03 per month in 2011 and nearly half of the bill would be billed in tier 4. Use 328 fewer kWh that month -- roughly a third lower usage -- and the bill would be reduced nearly 50%. This shows why using more electricity costs significantly more; the higher the usage, the higher the tier and the more expensive each kWh becomes.

Next, let's examine a house with solar 

which uses and produces 1,000 kWh each month.

(Same amount of electricity used and produced.) 

 

		Total Rate	kWh used	Estimated Billed Amount
Baseline	Tier 1	14¢	0	$0
101% - 130% of baseline	Tier 2	16¢	0	$0
131% - 200% of baseline	Tier 3	29¢	0	$0
Over 200% of baseline	Tier 4	31¢	0	$0
Totals			0	$0

As you can see, the rates don't mean much to a solar customer since he or she will be producing the electricity that is used. With that said, however, I bet most of you out there would be thrilled to receive a bill that looks like this.

Lastly, let's examine a house with solar which produces 

1,000 kWh each month but uses 1,200 kWh each month.

(More electricity used than produced.)

		Total Rate	kWh used	Estimated Billed Amount
Baseline	Tier 1	14¢	200	$28.00
101% - 130% of baseline	Tier 2	16¢	0	$0
131% - 200% of baseline	Tier 3	29¢	0	$0
Over 200% of baseline	Tier 4	31¢	0	$0
Totals			200	$28.00

 

So, when a customer with solar uses more electricity than they produce, as you can see in the above example, SDG&E places that electricity in the least expensive tier, tier 1. Solar removes the highest and most expensive tiers first, allowing solar customers to purchase any excess in the lower tiers. Not a bad deal if you ask me...

"...So you're saying I can use as much electricity as I want and once I use more than I produce I'll begin paying in the lowest tiers? My wife is going to love this!"

Pey Shadzi 

Operations Manager at Cosmic Solar

pey@cosmicsolar.com 

(760) 532-9712