Large commercial client in Fresno installed a 200 kW rooftop solar array. They expected demand charges to decrease since solar generates during on-peak hours. But PG&E is billing demand on GROSS demand ? the total load drawn from the grid ignoring solar generation ? rather than NET demand which would credit the solar offset. The solar array reduces net building demand from 480 kW to 320 kW during peak hours but PG&E is still billing 480 kW. Is this right?
PG&E demand charges after NEM solar installation ? net or gross?
Phyllis ? this is one of the biggest misconceptions about commercial solar and demand charges. PG&E bills demand based on the maximum grid draw in any 15-minute interval. Solar reduces grid draw only when its generating. But the building peak might occur at 5-6pm when solar production is declining rapidly. If the peak demand interval occurs when solar output is low, the demand charge barely decreases even with a large solar array.
Barbara ? that makes sense for late afternoon peaks. But my clients interval data shows their building peak consistently occurs between 1-3pm when solar production is highest. Even during those intervals PG&E is showing grid demand of 480 kW. The solar generation during those intervals should be offsetting at least 150 kW of grid draw. Something doesnt add up.
Phyllis ? check the metering configuration. Is the solar generation metered behind the main service meter or on a separate production meter? If the solar has its own production meter and the building has a separate consumption meter, the demand is measured at the building meter BEFORE solar offset is applied. The solar kWh credits appear on the bill as net energy but the demand measurement point is upstream of the solar interconnection.
Hector ? you nailed it. The solar production meter is on a separate circuit. The building demand meter is between the grid and the building. Solar feeds into the building electrical system downstream of the demand meter. So the demand meter never sees the solar offset. The metering configuration is correct per PG&E interconnection standards but it means solar provides zero demand charge benefit.
This is a common problem with commercial solar installations. The solar installer should have explained that the standard interconnection configuration provides energy (kWh) savings but NOT demand (kW) savings unless the solar is interconnected upstream of the demand meter. Reconfiguring the interconnection point can solve this but requires PG&E engineering approval and possibly new metering.
Natalie ? PG&E does NOT use net demand for NEM accounts on their standard commercial tariffs. Demand is measured at the service delivery point which is upstream of the solar. The only way to get net demand billing is to move to PG&Es NEM-Paired Storage tariff which requires battery storage. Without a battery the solar-only configuration gets energy credits but no demand reduction. Major design flaw in the NEM program from the commercial customers perspective.
Final note: client is now evaluating a 100 kWh battery system specifically to capture solar generation and discharge during peak demand intervals. The battery would effectively reduce net demand by shifting solar generation to the exact 15-minute interval when the building peaks. Estimated demand charge savings of $1,800 per month would pay for the battery in 4.5 years. Without the demand charge benefit the battery payback would be 12+ years.
Idaho Power has a commercial solar tariff that specifically addresses this by calculating demand on a net basis regardless of metering configuration. They use the production meter data to mathematically adjust the demand reading. Not all utilities do this but its the technically correct approach. Phyllis should check whether PG&E NEM tariff has provisions for net demand calculation.