Published on March 30th, 2014 | by Roy L Hales


Solar Storage Scandal In California (In Depth)

March 30th, 2014 by  

Originally published on the ECOreport.

solar storage scandal

SolarCity spokesperson Will Craven said that about 500 of their California customers have agreed to install batteries for power storage, but the state’s three biggest utilities have only connected 12 since 2011. He decided to go to the press after Southern California Edison (SCE) said they were going to charge $2,900 to install a meter,  whereas SolarCity has found that an adequate meter can be purchased for between $75-150. The situation has greatly improved since Craven was interviewed by Bloomberg and PV Tech.

Craven reports that SCE now says they will charge between $400 and $600 for that meter — which is still high, but better — and  San Diego Gas and Electric (SDG&E) has dropped their price (for that same meter) from $600 to $495.

He said all three utility companies have been charging an $800 connection fee that is illegal under California net metering statutes. The California energy commission ruled that when battery storage is paired with solar it is an “addition and/or an enhancement to solar” and therefore falls under all prevailing net metering statutes and one of those statutes is that there may be “no application fee charged.”

Hanan Eisenman, from San Diego Gas & Electric (SDG&E), insisted the interconnection fee is assessed in compliance with California Utilities Commission rules. In addition, they need to install a new meter (the one Craven was talking about), which costs approximately $400, to accommodate this technology.

He added, “SDG&E’s position is that each customer should pay for the services they receive and not the ones they don’t. SDG&E incurs costs to be ready to provide standby service to energy storage customers to ensure that their peak demand can be met when their equipment fails to operate. SDG&E believes that energy storage customers should pay these costs rather than other customers who do not benefit from these investments.”

Utilities also incur costs when they provide standby service to energy storage customers to ensure that their peak demand can be met when their equipment fails to operate.

As there is not a set policy at this time, Eisenman said, “SDG&E has decided to waive the standby charges for storage devices at this time. SDG&E may reexamine standby charges for storage in the future as part of broader examinations of rate design and equitable treatment of all customers in proceedings in front of the CPUC.”

Pacific Gas & Electric (PG&E) provided a California Public Utilities Commission report that shows the present rate system is not structured in a fair manner. However the inequality appears to be within the net metering sector and, as a class, they “pay their cost of service.” (p 105 & table 56):

Table 56: Shows the inequalities within NEM rates & that viewed as a class they are fair - but Will Craven pointed out that they count energy produced and used by homeowners as an expense, though it never touches the grid.

“As shown in Table 56, the median NEM customer’s annual bill is only 57% of the cost of serving that customer. Approximately 78% of NEM (Net energy Metering) customers pay less than their cost of service. Nevertheless, as discussed in Section 5.2.2, NEM customers as a group pay their cost of service. This aggregate result is driven by a minority of large, non-residential NEM customers who significantly overpay their cost of service.”

Craven challenges this study, which adds onsite consumption of solar to the alleged “cost” of net metering and also fails to consider a complete range of societal benefits to the environment and the economy.

As regards the popular conception that this is another outbreak of the solar vs utility conflict, Dave Eisenhauer, of Pacific Gas & Electric (PG&E), said, “Our record demonstrates our commitment to rooftop solar. One out of every four solar installations in the United States is made in our territory. More than 100,000 in total.”

In one of his company’s recent news releases, it states, “Since 2002, PG&E has signed 155 contracts for more than 10,600MW of eligible renewable power. PG&E has the cleanest energy portfolio among American electric utilities. More than 55 percent of our electricity comes from non-greenhouse gas emitting sources …”

A large proportion of that electricity comes from natural gas, but 22.5% came from renewable sources.

SDG&E stated they provided grid services to approximately 34,000 rooftop installations that can produce 240 megawatts of electricity at peak output.

In his interview with PV Tech, Craven said that battery storage customers are being made to wait from “29 weeks to infinity, with the best case scenario in PG&E territory, where 11 customers have been interconnected to date, followed by SDG&E with just one and SCE lagging far behind with no interconnections to date out of 140 applications submitted since 2011.”

He also mentioned that “some utilities have been interfering with the interconnection process.”

The ECOreport has heard a similar report from one of its contacts.

SDG&E has a new online application and fast track process to make the interconnection procedure faster and easier than ever before. They said it takes an average of just four or five calendar days to authorize a solar customer following the initial inspection by the city or county, which is the fastest approval time in the state. By using the fast track options, customers can interconnect their solar panels on the same day.

Eisenman said, “SDG&E also supports energy storage technologies and believes these systems have the potential to enhance reliability, integrate electric vehicles and smooth the fluctuations in supply of intermittent renewable resources.”

He added that “SDG&E has responded promptly to the energy storage applications it has received. SolarCity has submitted only two complete energy storage applications to SDG&E. Once the facilities were installed, the applications were submitted and the city inspections completed, these two applications were authorized by SDG&E within days. A third application has not been completed by SolarCity and we are awaiting additional materials. SolarCity has not submitted any other applications to SDG&E.”

Eisenhauer said PG&E has done so many rooftop solar installations that jobs are usually authorized within five days of the initial inspection. It takes longer to process interconnecting residential storage systems to the grid: eight to ten weeks. This will speed up as they become more familiar with the process.

He did not know how many applications SolarCity has sent it, but PG&E has received a total of 20 residential applications, of which 8 are now operational and the rest are in process. They have also received 35 commercial applications, and 16 are now online.

Craven said they have not submitted more $800 applications because the queue  is not moving. That can get expensive. When the utilities start clearing up the backlog, SolarCity will add more.


On a somewhat related issue, the California Public Utilities Commission has set targets for the state’s investor-owned utilities to procure a total of 1,325 megawatts (MW) of energy storage technology by the end of 2020.

PG&E’s portion is 580 MW and Eisenhauser said they are well on there way to achieving it.

SDG&E’s share is 165 MW, which Eisenman said they will reach.

Southern California Edison did not respond in time for this article, but there will undoubtedly be further clarifications.

Photo at top of the page: Cover of the California Public Utilities Commission Report “California Net Energy Metering, Ratepayer Impacts Evaluation” (Oct 2013), which is used in the article

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About the Author

is the President of Cortes Community Radio , CKTZ 89.5 FM, where he has hosted a half hour program since 2014, and editor of the the ECOreport, a website dedicated to exploring how our lifestyle choices and technologies affect the West Coast of North America. He writes for both writes for both Clean Technica and PlanetSave on Important Media. He is a research junkie who has written over 1,600 since he was first published in 1982. Roy lives on Cortes Island, BC, Canada.

  • MikeW

    Forget the intransigent companies in CA and bring the battery systems to AZ. I have a large photovoltaic grid system here and am eagerly awaiting a battery system from Solar City and Tesla so I can have emergency power if the grid goes down. APS is not happy with solar either, but they have not been as duplicitous as their counterparts in CA. Our Arizona Corporation Commission seems less political than the CA bureaucracy.

  • Hans

    “SDG&E’s position is that each customer should pay for the services
    they receive and not the ones they don’t. SDG&E incurs costs to be
    ready to provide standby service to energy storage customers to ensure
    that their peak demand can be met when their equipment fails to
    operate. SDG&E believes that energy storage customers should pay
    these costs rather than other customers who do not benefit from these

    I find this statement strange.

    1) Storage will most likely reduce the peak demand of costumers.
    2) If you adhere to this principle it should apply to other costumers as well. Costumers with a smooth demand profile should pay less than costumers with irregular demand. Since this is not the case, the argument is just an excuse to sabotage the self-sufficiency of costumers.

  • Rockne O’Bannon

    Nice report. Among the best I have read on this site.

  • JohnHartshorn

    I would ask those who have gone off grid if they have a generator for emergency backup. There are real costs to maintaining the capacity to supply peak loads that are determined solely by the size of the peak load. The smaller the average load is compared to peak, the more burden for peak capacity maintenance has to be pushed into the rates for off peak. If most homes have solar and get 60-90% of power therefrom, the cost per Kwh for the everyone else escalates sharply thus creating more incentive to solarize. Adding batteries to solar reduces the unpredictable loads imposed on the grid, hence deserves a lower rate than solar alone. There are several contradictory demands shaping the prices for various classes of users and the regulators and utilities don’t yet seem to be balancing them optimally in determining rate structures.

    • Mahdi

      One house is hard to be predicted (consumption f.e. has serious peaks). Total consumption of 1000 houses is easy to be predicted. Also the FV panels. One house is a problem. 1 000 000 houses in f.e. California are no problem, easy to be predicted. It’s (mathematical) Law of large numbers.

    • Rockne O’Bannon

      John and Mahdi. Really good comments and you are both right. I have given a lot of thought to the way Japan is handling these types of pressures on a national level and it is fascinating because they are getting set up for deregulation in a year or two, coming off of the chaos of the last three years. Still, they are getting it right.

      Eventually, matters will settle down in the US as the rates and options available to people become clearer. Oddly enough, I think that the game PGE is playing with rate payers arises from fear alone. PGE is not going to lose a ton of money to some guy with a battery in his garage, and that person is not going to get rich either. The battery will provide services to the user that will be about equal to the cost of the battery, and the utility will charge its fees whether the solar owner purchases a lot of electricity or not. In the greater scheme of things, it is just noise. Mahdi would agree with that.

      Japan has rates that are about 3 times higher, and still all this battery controversy does not arise. In fact, many households are using batteries and fuel cells. They are also heating with electricity, and heating water with it, and utilities are burning coal. The upshot is that the utility will get what it needs (decent, but not excessive profits) by increasing rates or fees, or decreasing costs, or lowering the FIT, or just having less need to worry about covering peak demand. I predict that, in the end, utilities will view fuel cells and batteries and PV arrays as “just another appliance” and will offer better and different services and programs. Homes will generate more electricity, and store more, but they will also eventually use more.

      The utilities’ business is providing services, NOT making a profit. They are chartered AS MONOPOLIES to do that. If US utilities can just lose the fear and help their customers, things can just move on…

  • Bob Fearn

    Why bother with utilities when it is now so easy to go off-grid??

    • Bob_Wallace

      Are you off the grid?

      • Bob Fearn

        Yes I am and as another post says batteries should last 10 years +.

        In any case most of us spend all sorts of money on things we don’t need and think nothing of it. The $60k truck, which is common in my area, vs the $25k 4×4 that would do the job. So we are we so concerned about a few thousand $$ supporting a new way of powering our homes which will only get more efficient over time?

        • Rockne O’Bannon

          Good on you, Bob, but you know what? Most people want to do other things with their lives. They could go off grid, but it would introduce risk and inconvenience, and conflict.

          It makes sense that you make this comment here because utilities are making it difficult for people to do what they appear willing to spend large amounts of money to do. If I were managing a utility, I would accommodate these people instead of pissing them off to the point that they want to leave the grid. So your point is well taken.

          But I think it represents failure of all parties to get what they want. In the long run, it will not be great for anyone to just dismantle the grid.

          • Bob_Wallace

            I am not recommending people go off the grid, Rockne.

            In fact, I think staying on the grid makes sense for almost everyone. In my case the grid was $300,000 away.

            I am trying to use my 2+ decades experience of living off the grid to give some perspective to those who think that cutting loose from the grid just means putting some solar on the roof and batteries in the basement.

            There’s a lot of naivete on the part of those who are talking a “screw the utility company, go off grid” line.

          • A Real Libertarian

            Rockne’s talking to Bob Fearn.

          • Bob_Wallace

            Missed the Fearn.

          • Rockne O’Bannon

            Please look at the header of my comment. Please note that I was addressing Bob Fearn.

            I have no comment for you.

    • ronwint

      Sure it’s easy to go off grid but the cost of replacing your batteries every 3 to 5 years will raise the cost of your electricity substantially higher than simply remaining on the grid. I know, offgridsolar .com

      • If you are having to replace batts every 3-5 years then you are sizing them incorrectly or using crap batteries. You should be aiming for a minimum 10 years, which is a typical lifespan of a batt bank in a correctly designed system. What daily DoD are you specing?

        • Bob_Wallace

          Ordinary golf cart batteries have been the lowest cost alternative for off-grid storage (dollars over decades). Expected life is in the 5-7 range.
          Trojan has a new RE series for off-grid use that should last 10+ years. (4,000 20% DoD cycling.)

          Batteries are a real cost. Between battery replacement and backup generation going off grid doesn’t make sense in most utility markets. Perhaps in a place where costs are unusually high such as Hawaii or Australia.

          The one place where going off grid makes financial sense is when the cost of a grid connection is unusually high. ($300,000 in my case.)

        • ronwint

          L-16s with a 50% DOD. That is unless you want to spend a fortune for a shallower DOD for a typical residential application.

          I’m not talking about a cabin here. I’m talking about a typical consumer who is not going to want to give up their current lifestyle or appliances. That’s what the average reader of this article is going to expect. Low cost batteries while freeing themselves from the grid. Not going to happen.

  • h2osmb

    So the utility company I suppose with this logic can charge BPA when the power goes out. They sometimes sell them excess power, right? BPA is tied into the grid, right? Or is it just a matter of degreed, sorry I meant degree, I think?

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