Are solar panels worth it for Pacific Gas and Electric electric customers?
PG&E has more customers with solar panels than any other utility in the nation. There are three main reasons for this.
- PG&E electricity rates are amongst the highest electric utility rates on the US mainland;
- The PG&E service area includes parts of central and northern California with high levels of solar irradiation and therefore solar panels installed in their jurisdiction generate more power than those installed elsewhere; and
- PG&E provides net metering, which is a generous opportunity to receive a retail rate for surplus solar power that you are transmitting to the grid. Without such benefits, solar panels would be much less appealing.
How does PG&E net metering work?
Net metering is a means of compensating solar panel owners for the solar power they produce during the day that exceeds their home’s day-to-day electricity needs and is thus sold to the PG&E network. Net metering has existed in California for some time and is the most significant reason to promote solar in California, along with the 30% solar tax credit. The California Public Utilities Commission (PUC) approved the NEM 2 law in 2016, which applies to all California publicly owned utilities, including PG&E. Net metering is available across the territory of PG&E. Net metering is relevant because it would not allow PG&E to pay you a retail price for your surplus solar energy generated without this incentive. Most customers do not know how good this opportunity is and how necessary it is for them to install their solar power system before limits are reached in the territories of PG&E.
NEM 2 was a victory for the solar industry, but the amount of compensation you get for power exported to the grid has been slightly reduced. The PUC agreed that there were certain non-bypassable charges to be charged on every kilowatt-hour (kwh) of electricity used from the grid that covers the expense of certain social programs that all grid users pay for (such as low-income power bill subsidies).
Today, the non-bypassable charges add up to around 2.5 cents per kWh, which ensures that you actually get 2.5 cents less than the full retail cost for the electricity you sell.
How much do solar panels cost for your home?
One of the best in the nation is the payback period for PG&E customers installing solar panels. The estimated cost of installing a 9.32kW solar system is $23,673, which is $2.54 per watt, for a typical PG&E consumer who owns a single family home and has a power bill of $270 a month. Upfront incentives (including the 30% federal solar tax credit) reduce this cost by $7,102 making the net cost $16,571.
What incentives, tax credits and rebates are available to PG&E customers for installing solar?
PG&E no longer offers upfront cash rewards charged by the government to allow their customers to install solar panels, as is the case with most utilities across America. Several discounts are available for low-income buyers and some are available for new home construction. If you are eligible for any such benefits, you can ask your local solar company. Solar may also be eligible for some broader grants or credits for energy efficiency, although the extent and implementation of these are also limited.
The 30% federal solar tax credit is the major financial incentive currently available until the end of 2019. However, the way this works is that the installer has to pay the full cost of the system and this tax credit can be claimed back as cash when you do your taxes next.
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