As the California Public Utilities Commission weighs a controversial decision on PG&E’s volumetric rate for smaller commercial customers, two things are clear: it’s increasingly risky to base on-site solar economics on favorable utility rate structures, and commercial facilities that can balance the volatility of their solar generation on-site will have the greatest control over energy costs.
The CPUC is deciding how to change PG&E’s A-6 tariff, which, unlike most California commercial rates, is based solely on energy consumption. The tariff imposes higher rates during peak periods, but doesn’t impose any demand charges. The A-6 has been available to facilities with average power consumption of up to 500 kW over a three-month period, a profile that matches a broad swath of commercial buildings, campuses, government agencies and small industrial sites. Solar output tends to be at its height during peak periods, so the economics of solar for these facilities—which get paid market rates for any excess power they produce—have been quite favorable.