Sacramento, CA to buy Solar Energy from Customers

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Sacramento, CA, US

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Type: Policy

Status: Enacted

Source File: http//


The Sacramento Municipal Utility District (SMUD) will buy excess solar-powered electricity produced by their customers at the retail rate. In 1993, the SMUD PV Pioneer program established a partnership with customers willing to assist in the early adoption of photovoltaic (PV) technology. SMUD originally began the PV Pioneer program by purchasing, installing, owning, and operating 2 to 4 kilowatt (kW) residential rooftop PV systems on the "borrowed" rooftops of SMUD customers.

Since the beginning of PV Pioneer program, more than 550 PV systems have been installed on the homes of these pioneering SMUD customers who volunteered to lead Sacramento toward the promise of affordable, clean, renewable solar energy. These pioneers turned their homes into miniature power plants by volunteering to let SMUD site a PV system on their roofs.

These PV Pioneers helped lower the future cost of PV electricity by allowing SMUD to gain experience in the installation, operation, maintenance, pricing strategies, and other aspects of residential PV systems. As a result, SMUD customers are now able to buy their own PV system and use its electricity for themselves. The program has evolved so that SMUD's customers now purchase the PV systems from SMUD. SMUD's buydown of the PV system costs enables their customers to purchase a system at a substantial discount and receive credit on their electric bills for the energy the system produces.

In 2001, the customer's cost to buy a typical 2,000 watt solar PV system, that would provide about half of the annual energy needs of an average SMUD customer, is $4,800 ($2.40/W). The full cost of the system is over $9,000 with SMUD contributing a buy-down of almost half the cost. This SMUD buy-down, combined with reduced pricing based on SMUD's volume purchasing of PV equipment, allows SMUD customers to get systems at about half of the cost a non-SMUD customer would pay today.

Utility funding of programs in areas of renewable energy, energy conservation, and research and development is required by State electric restructuring legislation. SMUD has chosen to use a portion of these mandated funds to help their customer-owners who support solar energy to become Solar PV Pioneers. Solar energy is beneficial to both SMUD and its customers, so SMUD wants to make PV systems affordable for its customers. When the PV system produces more energy than the customer energy consumption, the excess is sold back to SMUD at retail rates, in effect turning the meter backwards. If customers consume more electricity than is generated by the PV systems, customers have the option of paying each month or to pay a settlement.