Meters are available with accompanying software programs allowing customers to track their systems' output via computer. Revenue quality meters are necessary for accuracy and timely reporting of energy production. Eligible revenue-grade meters must use a web-based reporting system or a utility reading and reporting system and include the option to attach a wireless modem (potentially through an RS232 cable jack or RJ45 phone jack).

The cost of adding a utility revenue-grade meter to a PV system is modest. For single-phase residential-scale systems, digital display electronic meters are available at an installed cost of roughly $100. Three-phase commercial-scale meter costs are in the range of $200 - $500. For systems over 30 kW this equates to about 0.25% of system costs.¹²

Remote Solar System Performance Data Collection and Reporting

Energy Division staff desires to explore options for web-based meter reporting/data collection, as well as potential later on-bill system performance and incentive data reporting for the CSI Program. Energy Division recommends exploration of these web-based reporting options with the goals of reducing administrative costs and providing valuable system performance data to the customer and respective administrators; Internet based remote meter reading may provide a cost-effective approach for data collection and reporting. Web-based systems are accurate to plus or minus 5% and can provide the customer with real-time electricity production and usage information resulting in a potential for energy conservation. Web-based metering is a centralized data management tool providing independent, real-time monitoring of energy generation from a customer's PV system. Information from a digital meter is transmitted through a phone line system modem, wireless modem, or Internet connection to a data collection and management system. Access through a website or other vehicle is provided to the customer and administrators remotely. This data can be transmitted to the utility billing system for inclusion on the customer's monthly energy statement. There are at least three such web-based management tools currently available to customers.¹³

· For example, Automated Energy, Inc. recently provided Internet-based meter reporting services to the City of Palo Alto's remote meter reading pilot program. This Remote Reading Application enables users to retrofit existing Interval Data Recording (IDR) meters to communicate over the Internet. This eliminates the need for dial-up phone lines and reduces the risk of missed data. Costs for meters capable of communicating via the Internet are slightly more expensive, although more in line with three-phase commercial-scale meter costs. Communication and software costs for this approach might cost $30 to $50 per month.

Alternatives On the horizon

Other participants mentioned the near-term prospect of communicating meter systems that can be "baked" into the design of solar systems. SoCalGas and SDG&E suggested that a development effort could provide for remote monitoring of solar unit operating characteristics. Once developed, these systems would be available to vendors to integrate into equipment components or installation designs. Depending on customer preferences, the utility or a third party could perform the role of system monitor. Such technology offers the promise of smart monitoring arrangements that can provide prompt notification if a solar system's production falls short of targets, or stops entirely for any reason. This monitors unit safety, security, diagnostics, and maintenance conditions. Expectations are that this approach for communication and software might cost an average of $25- $50 per year.

Energy Division staff recommends that a work group of solar and metering communications industries, utility, and regulatory representatives convene to explore how technology and remotely transmitted meter data from the PV system can be best incorporated into third-party reports or into utility billing networks with the ability to display information on the customer's monthly energy bill. Recommendations regarding promising metering and communications techniques should be made to the CPUC staff and the CSI program administrators for their consideration. If the recommendations are found to be technologically feasible and cost-effective accepted, these recommendations could be reflected in future editions of the CSI program handbook(s). .

7.1 Large systems > 100 kW

Recommendation:

1. All CSI participants must have a dedicated system meter to measure output.

2. The meter must have the following attributes:

a. Be of revenue-grade.

b. Must use a web-based reporting system or a utility reading and reporting system

c. Must include the option to attach a wireless modem (potentially through an RS232 cable jack or RJ45 phone jack).

d. Systems 30 KW and above must be able to communicate remotely via the internet.

1. All CSI participants must have a dedicated system meter to measure output.

2. The meter must have the following attributes:

· revenue-grade.

· use a web-based reporting system or a utility reading and reporting system

· include the option to attach a wireless modem (potentially through an RS232 cable jack or RJ45 phone jack).

· Systems 30 KW and above must be able to communicate remotely via the internet.

Rationale:

Energy Division staff proposes the above recommendations for meter requirements, data collection, and reporting are applied to large PV systems over 100 KW that wish to participate in the CSI program. A performance-based incentive payment requires a system dedicated revenue-grade meter in order to accurately measure generation of the PV unit allowing for incentive payments on a cents per KWh basis.

In addition, ED along with industry and utility representatives will be exploring options for including PBI payments and performance data within the applicant's energy bill. In order to have a cost-effective means of developing this reporting tool, meters that can communicate remotely are desirable; Internet based remote meter reading may provide a cost-effective approach for data collection and reporting. Web-based systems are accurate to plus or minus 5% and can provide the customer with real-time electricity production and usage information resulting in a potential for energy conservation.

Questions and Unresolved Issues:

· Utilities should advise if web-based on-bill reporting of incentive and performance data could be in place by January 2007, or if not, what kind of interim solution could be in place, such as a quarterly report that coincides with off-bill incentive payments.

· Utilities also should discuss set-up costs for web-based on-bill system data reporting.

7.2 Small systems < 100 kW

Recommendation:

· Staff recommends that all CSI applicants be required to obtain revenue-grade meters.

· Systems over 30 KW should have the ability to communicate remotely via the Internet as described above.

Rationale:

Due to lack of on-site maintenance staff, residential systems have a higher likelihood of having availability issues than large non-residential systems. It appears that the availability uncertainty primarily is due to a lack of information about the performance of their solar systems. The best solution is a good, low-cost system to inform residential customers how well their systems are performing and, if their system has a problem, to notify them and advise what to do about it.

At the March 16^th, 2006 CSI workshop participants indicated meters capable of communicating via the Internet are cost-effective for PV systems 10 KW and above. The definition of cost-effective was 1% of total system costs.

Questions and Unresolved Issues:

● ED would like feedback regarding the applicability of requiring meters capable of communicating remotely for solar systems sized between 10 - 30 kW, including cost information for these systems.

7.3 Net Energy Metering Considerations

Recommendation:

o Utilities are required to file estimated cost impacts for providing net energy metering to accommodate CSI participants, up to 3,000 MWs, and address other questions posed in the "Questions" box below.

Rationale:

Pending legislation proposes to increase California's net energy metering cap from .05% of statewide aggregate installed capacity to 2.5%. Traditionally, net metering has been assumed to be a necessary component of wide-scale solar proliferation. An eligible customer-generator up to 1 MW receives the bundled retail rate for solar production to offset onsite consumption of utility-provided electricity. Net energy metering customers are exempt from interconnection and standby charges, and pay the public goods charge and DWR-related surcharges based on net consumption. These costs are shifted to utility ratepayers.

The CSI will have the intended effect of increasing solar installations over the next ten years, potentially up to 3,000 MW by 2017. Policymakers require more information regarding the costs and benefits to subsidize up to 3,000 MW through net metering. The Commission is already in the process of developing a cost-benefit methodology to calculate the attributes of solar and other DG projects. As part of this effort, the Commission should require parties to provide estimated impacts of net energy metering (NEM) under various scenarios.

Questions and Unresolved Issues:

The utilities and other parties with this knowledge are should address the following:

· What percentage of SGIP projects participate in net metering?

· How much energy (versus their MW system capacity) is credited via the NEM mechanism for NEM participants? What % of renewable DG customer gross demand is credited back?

· What does this amount to in terms of % of each utility's system wide retail sales?

· How critical is NEM to eligible projects? How does the credit mechanism affect a project's economics?

· Provide estimated annual costs not paid by NEM customers since the maximum system capacity requirement was increased from 10 kW to 1 MW. Estimate the impact on other ratepayers if the NEM cap is increased to 2.5% and 5% of aggregate peak demand.

· If the NEM cap were increased to meet the CSI goal of an additional 3,000 MW of solar capacity added in 2006-2016, what percentage of total gross peak electrical demand would be met by solar technologies and at what cost? Parties should include and identify assumptions regarding the percentage of CSI projects (1 MW or less) that would be eligible for NEM, and what portion of their gross solar production would receive a NEM credit.

·  Taking the potential benefits of NEM-eligible DG into account, what is the net subsidy to NEM customers? Calculations should use E3's recently-updated avoided costs, and at minimum, should include transmission, distribution, peak energy production, and diversity. 

·

8. ENERGY EFFICIENCY REQUIREMENTS TIED TO SOLAR INCENTIVES

Recommendation:

o Program participants must obtain a building audit through an online, telephone, or onsite utility program, or through a non-utility provider.

o The audit requirement is waived if the home or building already is energy efficient as demonstrated via LEED-certification, Energy Star-certification, or having a previous acceptable energy audit report during the past 3 years.

o CSI participants are encouraged, but not required at this time, to make the recommended energy efficiency improvements .

Rationale:

In D.06-01-024, the Commission determined that energy efficiency audits are required for retrofit buildings to participate in the CSI. The manner in which the audit requirement is implemented must provide adequate signals to promote efficiency improvements concurrent with solar installations, but not act as a barrier to either action. At a minimum, a building audit must establish an efficiency baseline, and educate the applicant regarding the increased efficiencies and economic benefits these improvements provide.

PG&E, SCE, SDG&E, and SoCalGas provide no-to low-cost online, telephone, and onsite energy efficiency audits for residential, commercial, and non-residential customers. Some audit programs focus on public buildings, schools, or specific industry sectors. We expect that the utilities will continue to offer these programs throughout the CSI ten-year implementation period (though, of course, improvements may be made to the audit programs). All audit programs should be continuously available and funded by the utilities, and the program administrators should work together to facilitate seamless coordination between the audit programs and the CSI.

For purposes of the CSI, program participants may choose from among the applicable online, telephone or onsite audits provided through the IOU's energy efficiency programs. We expect that the IOU-sponsored telephone and onsite programs can accommodate many, but perhaps not all, of the increased audit requests due to this CSI requirement. Therefore non-utility audit solutions are also allowed. Applicants will receive an automatic waiver of audit requirement if the home or building shows it is already energy efficient via LEED-certification, Energy Star-certification, or previous acceptable energy audit report in past 3 years.

Applicants are required to submit audit results to the CSI program administrator during the application process. At this time applicants will be encouraged but not required to make building efficiency improvements to be eligible for CSI incentives..

Questions and Unresolved Issues:

· What certification or audit protocol should we accept for acceptable energy audits by providers outside the utility audit programs?

· In the future, should the Commission consider reducing the authorized solar system size (e.g. to one-half the otherwise allowed size) if a building has not undertaken recommended efficiency measures that have a simple payback of less than 3 years?

Appendix A

On March 16, 2005 the CPUC held a workshop on performance based incentives, which also included discussion about the federal tax credits recently enacted as part of the Energy Policy Act of 2005. Prior to the workshop, the CPUC received proposals from the following parties regarding how to structure a PBI program:

· Electric Utilities

o Pacific Gas & Electric (PG&E)

o Southern California Edison (SCE)

o San Diego Gas & Electric/Southern California Gas (SDG&E/SoCalGas)

· Industry Representatives

o PV NOW

o Americans for Solar Power (ASPv)

o California Solar Energy Industry Association (CalSEIA)

o Golden Sierra Power

· CPUC Division of Ratepayer Advocates (DRA)

The workshop included an introductory presentation on PBI design issues by Tom Hoff of Clean Power Research, a presentation by Brandon Rose of the California Energy Commission (CEC) regarding the CEC's pilot effort in PBI, and a presentation by Ryan Wiser of Lawrence Berkeley National Laboratory regarding the implication of the recently enacted federal tax credit for installation of solar. ¹⁴ In a series of panel discussions, parties responded to questions from CPUC staff and members of the audience regarding their proposals.

Categorization of Incentives Proposals Submitted at PBI Workshop

Category	Utility				Industry Representative			Consumer Advocate
Customer Type	PG&E	SCE	SDG&E/ SoCalGas	Golden Sierra Power	PV Now	CalSEIA	ASPv	DRA
Commercial
PBI	X	X	X	X			X
CBI								X (New Construction)
Hybrid					X	X		X (Retrofit)
Residential
PBI			X	X			X
CBI	X	X			X		X (EPBB)	X (New Construction)
Hybrid						X		X (Retrofit)

Appendix B

Summary of Proposals Submitted for March 16, 2005 PBI Workshop (Source: LBNL)

Party	Customer Class	Type of Incentive	Payment Period	Payment Structure	Changes in Incentive Rates over Time	Basis for Determining Incentive Amount	Incentives Should be Reduced to Reflect Federal Tax Credits?	Alternatives Considered and/or Other Details
PG&E	Non-Residential	PBI	10 yrs	Flat PBI rate for each project over its payment period	Incentive rate declines over time for projects installed in later years, according to incentive schedule in CPUC order	_ Set at a level such that NPV of payment stream is no greater than CBI in CPUC order _ Use a reasonable discount rate that appropriately incorporates all stakeholders' risks	-	_ If over-subscription becomes an issue, should conduct auctions _ Rather than a flat rate, could "front- and back-load" incentives over each project's 10 yr payment period _ Supports consideration of a feed-in tariff to combine PBI and net metering into a single incentive structure that declines over time
	Residential	CBI	n/a	-	-	-	-	_ Possibly move to PBI for residential down the line
SCE	Non-Residential	PBI	5 yrs (or less, for projects with >20% capacity factor)	Flat PBI rate for each project over its payment period	Incentive rate declines over time for projects installed in later years, according to incentive schedule in CPUC order	_ Convert CBI levels in CPUC order into PBI rate assuming a 20% capacity factor _ Total payment per project capped at the equivalent to the CBI levels in CPUC order (i.e., systems performing at >20% capacity factor would receive the same total incentive as systems with 20% capacity factor) _ Proposed rate schedule converts CBIs to PBIs.	Yes	-
	Residential	CBI paid over time	5 yrs	Half of CBI paid upon installation; remaining half split into equal annual payments over five yrs, following annual inspection to verify continued system operation	Same as above	_ Based on CBI rates in CPUC order _ Adjustment to annual payments needed to account for time-value (general statement, no details on how)	No	-
SDG&E/ SoCalGas	Did not specify	PBI	Seems to suggest that it should be based on the usable life of the facility	Flat PBI rate for each project over its payment period (possibly moving to a time-differentiated pricing structure in the long run)	-	-	Yes	_ Rather than a flat PBI rate, a portion of total incentive could be paid out over a short time frame
Division of Ratepayer Advocates	Non-residential retrofit	CBI+PBI	3 yrs for the PBI (although they say 4 yrs)	Flat PBI rate for each project over its payment period, in addition to up-front CBI	Rates should decline 10% per year for 2007-2009; no discussion of later years	_ In their example, the CBI is 25% of $2.8/W and the remaining 75% is converted into a PBI rate, based on 3 years of output, 18% capacity factor, and 0% discount rate	-	-
	Residential retrofit	CBI+PBI	They say 2 yrs for the PBI (but probably mean 1 yr)	Same as above	Same as above	_ Same as above	-	-
	Non-residential new construction	CBI	n/a	$2.8/W	No change incentive rates for 2007-2008; no discussion of later years	_ The incentive should be based on the connected load of installed central A/C and lighting	-	-
	Residential new construction	CBI	n/a	Same as above	Same as above	_ The incentive should be based on the connected load of installed central A/C	-	-
ASPv	Non-residential projects >100kW	PBI	10 yr	Front-loaded PBI rates; i.e., the PBI rate declines annually over the payment period for each project	Declines over time for projects installed in later years	_ ASPv developed a model to calculate optimum PBI rates	Yes	-
	Non-residential projects <100kW	Adjusted CBI or choice between Adjusted CBI and PBI	10 yr (for PBI, if offered)	PBI payment structure is same as above; Adjusted CBI is an up-front payment	-	_ CBI is adjusted based on design, orientation, installation, shading _ If a choice is offered between adjusted CBI and PBI, the relative levels of the CBI and PBI should reflect the impact of performance risk on customers' discount rate	Yes	-
PV Now	Non-residential	CBI+PBI	5 yrs for PBI	Flat PBI rate for each project over its payment period, in addition to up-front CBI. Rates vary by year of installation.	Total incentive (CBI+PBI) declines over time for projects installed in later years, but PBI becomes an increasingly larger fraction of the total (and thus in some years increases relative to the prior year)	_ PV Now developed a model to calculate optimum incentive rates	-	-
	Residential	CBI	n/a	CBI paid up-front	Declines over time for projects installed in later years	_ Same as above	-	-
CalSEIA	-	Generally favors hybrid approach; cautious about PBI for small systems (<30 kW)	Multiple payment terms (duration and amount) should be offered	Flat and declining PBI rates could both be offered; payments should be made monthly	PBI should be phased in over time as an increasing portion of total incentive	-	-	_ Market research should be conducted in advance of the program, to gather data on customer reaction to potential PBI structures _ Continued PBI pilots should focus on large systems (>250 kW)
Golden Sierra	-	PBI	-	-	-	_ Suggest that the PBI should be 10% more than the current CBI ($2.80/W)	-	-

¹² "Designing A Performance-Based Incentive for Photovoltaic Markets", Bonneville Environmental Foundation, Thomas J. Starrs, July 2004.

¹³ "Decision on Pilot Performance-Based Incentive Program", California Energy Commission, January 2005.

¹⁴ All proposals submitted by parties and presentations from the March 16^th PBI workshop are available on the CSI Web site.