SDG&E says new rates should boost use here
By Bruce V. Bigelow, staff writer
The San Diego Union-Tribune

May 4, 2008

The California Solar Initiative provides rebates to homeowners, businesses and nonprofit organizations that install rooftop solar panels, also known as photovoltaic systems.
Now a progress report reveals that fogbound homeowners in San Francisco and Northern California are rushing to "Go solar" at a much higher rate than residents in sunny San Diego and the rest of Southern California.

The difference is practically like night and day.

Solar proponents offer a variety of explanations for the difference, but most agree that utility and government support have been stronger for installing rooftop solar systems in Northern California.

But that could change in San Diego.

San Diego Gas & Electric Co. officials and clean-energy advocates say new optional electricity rates that took effect last week are expected to help energize local participation in the statewide solar program.

The California Solar Initiative was intended to spread the benefits of clean energy and fundamentally alter the industry's economies of scale by spending $3.4 billion over 10 years to subsidize solar installations. The program provides rebates to homeowners, businesses and nonprofit organizations that install rooftop solar panels, also known as photovoltaic systems.

Yet most of the residential applications for solar rebates during the first 15 months came from Pacific Gas & Electric's service area, according to the progress report prepared by the California Public Utilities Commission.

Of the 8,786 applications that homeowners filed for solar installations on existing homes, 6,247 came from PG&E's service area. In contrast, 697 residential applications came from San Diego Gas & Electric territory over the same period.

When adjusted for SDG&E's smaller customer base, the application rate among PG&E homeowners is almost 2.5 times the pace in San Diego.

"PG&E really does stand out in that they really do have a lot more residential applications," said Molly Tirpak Sterkel, who supervises the solar initiative for the commission's energy division. "But I would say just because Northern California is surging forward does not mean that San Diego is lagging behind."

The numbers for new homes are even more lopsided, according to data collected by the California Energy Commission from January 2007 through April 2008.

Of the 3,981 applications submitted for new homes that include rooftop solar panels as a standard feature, 3,521 came from PG&E's territory.

In contrast, the commission counted 121 solar rebate applications for new homes in SDG&E's service area - despite San Diego's famously mild climate and a lower latitude that translates to about 10 percent more radiant solar energy than in Northern California.

Of California's three major utilities, SDG&E has been the most intransigent in terms of encouraging development of local solar systems, said Michael Shames, executive director of San Diego's Utility Consumers' Action Network.

The difference between SDG&E's attitude toward solar and PG&E's "is like night and day, which is striking since we have a lot more sun than any other area of the state," Shames said.

SDG&E officials dismiss such criticism, saying the utility is committed to developing solar and other renewable energy sources, notably in the Imperial Valley as part of its controversial Sunrise Powerlink project.

Sterkel and other solar proponents say there are many facets to the initiative and San Diego compares more favorably in other measures of the progress so far.

Residential installations account for only part of California's effort to subsidize enough solar installations to generate 3,000 megawatts of electricity by 2017 - enough capacity at peak output to match six modern natural-gas-fired power plants.

More than half of the total is expected to come from "nonresidential" solar installations, which include industrial and commercial buildings as well as schools and nonprofits.

San Diego's applications for nonresidential solar installations under the initiative are more proportionately "on par" with SoCal Edison and PG&E, said Andrew McAllister of San Diego's California Center for Sustainable Energy. The nonprofit center in Kearny Mesa administers the solar incentive program in SDG&E's territory.

Such applications represent about 20 megawatts of solar-generated electricity, or about 17 percent of the 10-year goal for San Diego, according to the commission's progress report.

That is proportional to the rate of nonresidential applications in the 10-year goals set for PG&E and SoCal Edison, which have far more industrial customers than SDG&E. Together PG&E and SoCal Edison represent about 61 percent of California's statewide load for electrical power.

SDG&E, on the other hand, accounts for 7 percent of the statewide power load. The San Diego utility's 1.4 million customers include 1.2 million residential meters.

Still, the disparity between solar fervor in Northern and Southern California has become a topic of discussion in the state's halls of government, said state Sen. Christine Kehoe, D-San Diego.

"People who know both ends of the state, so to speak, say that Northern Californians - and especially people in the San Francisco area - are embracing green energy and the California Solar Initiative at a much higher rate," Kehoe said.

Experts say the biggest reason is that PG&E's electric rate structure has been much more "solar friendly" than either SDG&E's or SoCal Edison's - at least until SDG&E implemented new optional rates for solar customers.

"The rate structures make a big difference - probably the biggest difference," said Sue Kateley of the California Solar Energy Industries Association.

"Your rate structures were not what I would consider solar friendly at the time the initiative started," Kateley said. "It wasn't that anyone made them intentionally solar unfriendly. We were all on the frontier when the solar initiative started. It's just that we look at rates differently now."

Officials of several San Diego school districts acquired a deeper respect for the nuances of SDG&E's electric rates after installing solar systems.

Unlike residential utility customers, who are billed for the electricity they use, there are two parts to the electric bill that SDG&E usually sends to schools and other nonresidential customers.

One part of the nonresidential bill is based on electricity "time of use" - how much power is used and when. The most-expensive charges are imposed during the peak period of energy demand, from 11 a.m. to 6 p.m., with lower charges set for semi-peak or off-peak hours.

But another major part of the nonresidential bill is based on the fixed costs of SDG&E's power grid, and it depends on the customer's maximum power demand over the previous year. This "demand" charge represents how much standby power-generating capacity the utility must be ready to deliver to each of its biggest customers.

The schools that installed solar power systems could offset the "time of use" charges during the day when they are generating their own electricity, but they were surprised by the size of SDG&E's demand charges.

"The new tariff should be better," said McAllister at the California Center for Sustainable Energy, which began working on the problem with a number of school districts last year.

Under a new nonresidential tariff, solar customers have the option of choosing a different billing rate that charges more for the time-of-use energy drawn from the power grid and substantially reduces the fixed-cost demand charges.

SDG&E analyzed the utility bills at 30 schools equipped with solar systems in San Diego, and it concluded that savings under the new optional rate would range from 10 percent to 66 percent, said SDG&E spokeswoman Denise King.

Other nonresidential solar customers also should be able to offset their higher time-of-use charges, depending on the size of their solar-power systems, said Joe Velasquez, SDG&E's director of commercial and industrial services.

SDG&E also implemented a similar optional rate for residential solar customers that likewise imposes higher charges for energy used during peak demand periods, King said.

"Solar can be a good option for our customers," King said. "The key is to know that we are available to help our customers understand the new rate so they can make an informed decision about the best size of solar installation for their home or business."

Bruce Bigelow: (619) 293-1314; bruce.bigelow @ uniontrib.com