By Michael Palmquist
As California’s new “Net Billing” program (aka “NEM3”) quickly approaches, those of us here on the SolarNexus tech side have breathed a sigh of relief that we had already built SolarNexus to handle the NEM3 scenario within our analysis engine. Our engine already handles 8760 hourly analysis of load, PV production, and energy storage/dispatch. All we really needed was our rates provider (Arcadia) to provide the rates. We are happy to say that SolarNexus is producing NEM3 project economic analyses for all 3 CA investor owned utilities.
We have run analyses on some representative project solutions in each of the IOU territories to get comparisons of results. We looked at PV only, and PV + ESS systems under both NEM2 and NEM3 scenarios. Some key takeaways:
- PV Only jobs: NEM3 adds ~2 – 3 yrs to payback period
- PV + ESS jobs: NEM3 adds ~1 – 2 yrs to payback
The biggest and most important takeaway is that investment returns appear to remain fairly attractive on NEM3 projects. Our initial results show paybacks appear to be shorter than the 9 year break-even point that the utilities and CPUC had been targeting.
The table below shows our test results:
|NEM2: PV Only||NEM3: PV Only||NEM2: PV + ESS||NEM3: PV + ESS|
|PG&E||4.5 – 5 yrs||7 – 8 yrs||6 – 6.5 yrs||7.5 – 8.5 yrs|
|SCE||4.5 – 5 yrs||6.5 – 7 yrs||5.5 – 6 yrs||7.5 – 8 yrs|
|SDG&E||3.25 – 3.75 yrs||5.25 – 5.75 yrs||4.5 – 5 yrs||6 – 6.5 yrs|
Of course, the main drivers of these numbers are the price assumptions. In the cases above we assumed $3.60/W for PV, and $0.90/Wh for storage, and assumed customers were paying cash.