3pm or 4pm? The Most Important Hour for Solar

This week’s blog post is a shout out to our friends at Aurora Solar who have just issued a white paper detailing how California’s upcoming Time-of-Use (TOU) rate change will affect the value of residential solar systems. Their study is based on 15-minute interval data for over 600 California homes. The data geeks here at WattzOn love it! The bottom line: Aurora’s work shows that the value of solar remains strong under TOU rates. There is still a significant economic benefit to going solar. The study could not be more timely. Greentech Media just reported that the California PUC will be deciding a very important question this week: Will the highest priced TOU rate block start at 3pm or 4pm? When the highest TOU rate block starts at 3pm, the sun is still shining. Solar energy used in the home displaces electricity from the utility at 45 cents per kWh. (Per SCE’S TOU D-A Rate, also used in the Aurora study.) If the TOU block start is delayed to 4pm, then the value of solar at 3pm is only 28 cents per kWh. Aurora’s analysis shows that a large part of a family’s bill savings from solar come in the 3 -5pm window (high rates, sun is shining). Delaying the start of the TOU rate block hurts the value of a solar home. Because TOU rates give consumers new price signals, we expect there to be a series of TOU rate proceedings, as utilities respond to changes in energy use by consumers. New prices, new usage patterns. And then utility costs will change, leading to new changes in the TOU rates. The question as to when to start the evening rate block — 3, 4, or 5pm — will addressed over and over. Congratulations to Aurora for a job well done. TOU rates are a huge change, and their work cuts through a lot of issues to show clear results.