The numbers and assumptions included in some answers below are based on Idaho Power’s current service offering. Ongoing cases with the Idaho Public Utilities Commission (IPUC) could change the billing and compensation structure for on-site generation in the future. Existing residential and small general service on-site generation customers as of Dec. 20, 2019 have been grandfathered into the current offering by the IPUC.
Investments for homes in San Jose and Boise with identical energy use
|San Jose, California||Boise, Idaho|
|Average monthly electric use:||500 kWh||500 kWh|
|Average monthly bill:||$150||$50|
|System size to offset nearly 100% of use:||4 kW||4.3 kW|
|System net cost after tax credit:||$12,300||$9,000|
|Simple Savings1 Calculation|
|Estimated break even point:||7 years||17 years|
|Total 20 year payback:||$27,000||$1,700|
|NET PRESENT VALUE1 CALCULATION|
|Estimated break even point:||8 years||Beyond 20 years|
|Total 20 year payback:||$14,400||-$1,400 (loss)|
*For simplicity, the chart shows a pure yellow color. However, the home may still rely on the grid even when solar is at its midday peak. For example, when a cloud goes by or a large appliance needs a boost, the grid is there to meet the home’s energy needs.
Idaho Power’s on-site generation tariffs are not contracts and are subject to change. The current rules do not represent a guarantee of future pricing. Modifications to the tariff’s billing or compensation structure, including measurement interval and the credit value of excess energy generation, will affect the amount a customer would be compensated. As stated in the Idaho Residential Energy System Disclosure Act, legislative or regulatory actions can affect or eliminate one’s ability to sell or get credit for any excess power generated by the system and may affect the price or value of that power.
The Idaho Public Utilities Commission (IPUC) grandfathered existing residential and small general service customers with on-site generation as of December 20, 2019, under the rules of Idaho Power’s service offering as of that date. The end date for grandfathering is December 20, 2045. The IPUC grandfathered existing large general service, industrial and irrigation customers with on-site generation as of December 1, 2020, under the rules of Idaho Power’s service offering as of that date. The end date for grandfathering is December 1, 2045. The IPUC’s grandfathering provisions apply to the on-site generation system rather than the Idaho Power customer — meaning the original system will remain grandfathered if a customer moves. However, if the system is moved to a new location, it will not retain grandfathered status. System expansions and modifications may affect the grandfathered status of the system. (See FAQ What if I want to add solar panels or additional turbines to my system or replace my inverter?) Not sure if your system is grandfathered? Call Idaho Power’s customer solutions advisors at 1-800-632-6605 to confirm your system’s status.
The Idaho Public Utilities Commission (IPUC) grandfathered existing residential and small general service customers with on-site generation as of December 20, 2019, under the rules of Idaho Power’s service offering as of that date. The end date for grandfathering is December 20, 2045.
The IPUC grandfathered existing large general service, industrial and irrigation customers with on-site generation as of December 1, 2020, under the rules of Idaho Power’s service offering as of that date. The end date for grandfathering is December 1, 2045.
The IPUC’s grandfathering provisions apply to the on-site generation system rather than the Idaho Power customer — meaning the original system will remain grandfathered if a customer moves. However, if the system is moved to a new location, it will not retain grandfathered status. System expansions and modifications may affect the grandfathered status of the system. (See FAQ What if I want to add solar panels or additional turbines to my system or replace my inverter?)
Not sure if your system is grandfathered? Call Idaho Power’s customer solutions advisors at 1-800-632-6605 to confirm your system’s status.
(1) Measurement Interval: What is the difference between monthly and hourly net billing?
In general, net billing means excess energy produced and exported to the grid at any time during the defined measurement interval can offset the energy consumed from the grid during that same interval (e.g., monthly or hourly in our example). Monthly net billing allows excess net energy to offset a customer’s energy needs anytime during that month, even at night when all energy needs for a customer with solar are typically supplied by the grid.
Hourly net billing means excess energy produced in one hour can only offset the energy used within that same hour. Any net excess energy exported to the grid is typically compensated at a rate different than the retail rate.
(2) Excess Energy Credit: How are excess energy credits applied?
At the end of the net billing cycle, unused excess energy credits are converted to bill credits. Bill credits apply toward charges for energy supplied by Idaho Power in future net billing cycles. Under the existing net monthly billing, each kWh of excess net energy can be carried forward to offset future kWh consumption.
(3) Value of Excess Energy: How does the credit value impact an investment in on-site generation?
If a change in the compensation structure results in a lower credit value, it will take longer for a customer to recoup an investment in on-site generation because they are receiving less of a bill credit than under the existing compensation structure.
The payback scenarios used the following inputs:
- Home’s energy use: Average residential customer use of 11,800 kWh per year (980 kWh per month) with energy use highest in winter and summer for heating and cooling.
- Solar generation: Hourly and annual generation for a 6 kWDC solar array (a common size for Idaho Power customers) in Boise. Estimates are from National Renewable Energy Laboratory’s (NREL) PV Watts Calculator, using the calculator’s default settings.
- System cost: $3.00 per watt based on Project Sunroof’s cost estimates for a similarly sized system in Boise. The cost for the example 6 kW solar system is $18,000 before tax credits and deductions.
- System degradation: 0.7% annually based on data from NREL’s 2018 Benchmark Report.
- Tax credits: 26% federal tax credit and full Idaho state tax deduction.
- Energy costs: Idaho Power’s pricing for Schedule 1, Residential Service, with an average kWh cost of approximately 8-10¢.
- Utility bill increases: 1% to 3% per year. By comparison, Idaho Power’s energy fuel costs are estimated to increase 1.3% per year, as noted in the current Integrated Resource Plan (IRP).
- Loan details: 20-year loan at 3.99% interest is a common solar loan term.
- Discount rate (required rate of return): 6%. This input should be based on one’s personal needs. When deciding your required rate of return, at a minimum, consider inflation (typically 2-3%) and your loan interest rate to make sure you break even. Decide what is the best use of your money right now by comparing the expected returns from different investment options, like stocks, bonds, other purchases or simply saving for your future.
- Solar Energy Credit Value: For the current estimate, 8-10¢ reflects the retail kWh value for Schedule 1. The actual future value for customers’ excess solar energy will be determined by the Idaho Public Utilities Commission after a study of the costs and benefits of distributed on-site generation to Idaho Power’s system. The study and the future value of excess energy will be determined during future filings with the Commission and will involve the public and stakeholders representing a diverse set of customer interests. For the modified estimate provided, 2-3¢ is based on Idaho Power’s recent purchase contract for the new Jackpot Solar facility, which is the price Idaho Power will pay per kWh for solar energy from this facility.
Connecting Your System
There are two configurations for energy storage devices (such as batteries): those that share an inverter with a generation facility (direct current [DC] coupled); and those that have a standalone inverter (alternating current [AC] coupled). Idaho Power requires that energy storage devices not coupled with a generation facility taking service under Schedule 6, 8, or 84 (exporting system) may not export energy onto Idaho Power’s system. Starting March 23, 2021, the total system size for on-site generation systems with energy storage devices will be calculated as follows:
- DC Coupled: For energy storage devices that are DC coupled, the total nameplate capacity of the system is defined by the inverter (kilovoltampere [kVA]).
- AC Coupled: For AC coupled energy storage with an exporting system, the total nameplate capacity is the total nameplate capacity of all distributed energy resources on the customers’ side of the interconnection point (i.e., the AC capacity of the solar PV system plus the AC capacity of the battery.)
For an energy storage device coupled with a non-exporting system, the total nameplate capacity of the energy storage device shall be considered 0 kVA.
Note: modifications may also require a state/city electrical inspection. Be sure to check with your authority having jurisdiction to ensure the work complies with all electrical codes.
Modifications to grandfathered systems are allowed; however, the way the new system is connected may result in changes to the grandfathered status of the existing system. The new panels and inverters must be separately metered to retain grandfathered status for the existing installation if adding solar panels. The new portion of the system will not be grandfathered, will take service under the rules in place and will be subject to future changes in billing and compensation structure. If the expansion is not separately metered from the grandfathered portion, no part of the system will retain grandfathering.
The Idaho Public Utilities Commission allows for replacing degraded or broken solar panels without affecting a system’s grandfathered status. When replacing panels, customers may increase the grandfathered system’s capacity by no more than 10% of the initially installed nameplate capacity or 1 kW, whichever is greater. The total number of panels must remain the same or less than the initially installed system.
To determine your grandfathering status and expansion requirements, contact our customer solutions advisors at 1-800-632-6605.
Excess Energy Credit Transfers
- Excess energy credits must be available.
- Service agreements must be held by the customer and be for the customer’s use.
- Service agreements must be on the same contiguous property and be served by the same primary feeder as the customer generation (i.e., on-site generation or net metering) service agreements.
- Transfers can only occur between Residential and Small General Service accounts (Schedules 1, 6, 7 and 8) or between Large Commercial, Industrial and Irrigation accounts (Schedules 9, 19, 24 and 84).
- If multiple service agreements are eligible for aggregation, excess credits must first be applied to eligible service agreements on the same rate schedule as the on-site generation/net metering service agreement. Remaining excess credits may then be applied to offset consumption at eligible service agreements on differing rate schedules in accordance with the criteria detailed above. For example, if the transfer is occurring from a Schedule 6 (Residential) service agreement to two eligible service agreements, one Schedule 1 (Residential) and the other Schedule 7 (Small General Service), you must transfer some portion of your credit to the Schedule 1 service agreement to be eligible to transfer a portion to the Schedule 7 service agreement.
Schedule 84 Customer Generation (Case IPC-E-20-26)
Idaho Power proposed two modifications to Schedule 84:
- To modify the metering requirement in Schedule 84 for new commercial, industrial and irrigation (CI&I) customers from a two-meter system to a single-meter system, simplifying the interconnection process.
- To grandfather existing Schedule 84 customers in Idaho under the current 1 kilowatt-hour (kWh) to 1 kWh net monthly compensation structure.
In its Order No. 34854 issued on December 1, 2020, the commission ruled:
- To modify the metering requirement in Schedule 84 for new CI&I customers from a two-meter system to a single-meter system, as proposed by Idaho Power.
- To grandfather existing Schedule 84 customers in Idaho under the current 1 kWh to 1 kWh net monthly compensation structure for 25 years.
CI&I customers taking service under Schedules 9, 19 and 24 in Idaho and Oregon.
- CI&I customers taking service under Schedule 84 as of December 1, 2020.
- Customers with an active application to take service under Schedule 84 received by Idaho Power on or before December 1, 2020, who interconnect their system by December 1, 2021.
- Customers who have made a binding financial commitment as of December 1, 2020 to install on-site generation, submit a Customer Generation application by February 13, 2021 and who interconnect their system by December 1, 2021. Customers must provide documentation demonstrating a binding financial commitment.
Interconnected is defined as successful completion of the Idaho Power inspection, which confirms the system meets the requirements of Schedule 68 – Interconnections to Customer Distributed Energy Resources and Schedule 84 – Customer Energy Production/Net Metering Service.
Grandfathered systems are subject to the existing two-meter design standard. Systems are grandfathered at the originally installed nameplate capacity of the system.
Existing customers or applicants may choose a single-meter option; however, grandfathered status would be forfeited.
A customer who moves into a property with a grandfathered system will “inherit” the grandfathered status of the system. Grandfathered status does not travel with a customer if they move.
If a system is offline for longer than six months, or is moved to another site, the grandfathered status is forfeited.
To allow for the replacement of degraded or broken panels, customers may increase the capacity of their grandfathered system by no more than 10% of the originally installed nameplate capacity or 1 kW, whichever is greater. The total number of panels must remain the same as the originally installed system.
Grandfathering applies to the original approved nameplate capacity of the system. Customers who want to expand their system have two options:
- Keep the grandfathered system behind the second meter and place the new system behind the load meter.
- Combine the systems and follow the rules in effect at that time (lose grandfathered status) and place the combined system behind a single meter.
Customers should note that Idaho Power’s on-site generation tariffs — Schedules 6, 8 and 84 — as with all tariffs, are not contracts and are subject to change at any time upon order of the IPUC. The IPUC noted that “the program fundamentals are likely to change in the not too distant future,” so customers should expect program changes as a result of ongoing evaluation. Changes to the on-site generation tariff in the future may include, but are not limited to, modifications to rates, billing components, billing structure, compensation structures, and the value for excess energy produced by the customer’s on-site generation system (which affects the amount a customer would be compensated).
Yes. The company intends to submit a filing to formally initiate a comprehensive study of the costs and benefits of distributed on-site generation upon completion of Case Nos. IPC-E-20-26 and IPC-E-20-30, which address changes to Schedule 84 and customer generation interconnection requirements, respectively.
Schedule 68 Customer Generation (Non-export Option)
Some customers do not want their generation systems, like solar panels, to export power to the electrical grid and wish to interconnect their system so they consume all energy generated on-site. However, these systems are still grid-connected and, as such, need rules in place to ensure they do not negatively impact the grid. Effective March 23, 2021, Schedule 68 outlines (1) technical solutions to prevent export; (2) an interconnection and application process so Idaho Power can verify compliance with the interconnection requirements and (3) mitigation efforts should the customer’s system export power beyond the allowable amount, referred to as the inadvertent export limits.
Under both the export and non-export options, residential (Schedule 01) and small general service (Schedule 07) generation systems are limited to a maximum AC size of 25 kilowatts (kW) (or kilovoltampere [kVA]). This limit will allow these customer groups to transition between non-export and export (by submitting an application) without making costly retrofits to their systems.
Large general service (Schedule 09), irrigation (Schedule 24) and industrial (Schedule 19) customers may install up to 100 kW (VA) AC for exporting systems. There is no limit to system size for non-exporting systems for these customer groups.
All customer generation applications will undergo a Feasibility Review to determine Idaho Power’s electrical grid’s capability to incorporate the proposed generation system and to determine if upgrades are necessary. In some cases, proposed systems may require an additional Feasibility Study to determine if upgrades or protection equipment is needed. Idaho Power will conduct Feasibility Studies for systems under 3 megawatts (MW) on a case-by-case basis. Systems over 3 MW will require additional study.
- Advanced Functionality: Use of an internal transfer relay, energy management system or other customer-owned facility hardware or software system(s) to ensure power is never exported across the interconnection point.
- Reverse Power Protection: Uses a reverse power relay to ensure power is never exported across the interconnection point.
- Minimum Power Protection: Uses an under-power protective function to ensure a minimum amount of power is consumed at all times, and therefore, power cannot be exported.
Customers whose systems export above the allowed inadvertent export limits (three hours of the distributed energy resource’s total nameplate capacity in any 30-day period) will be notified and expected to take corrective action.
For residential (Schedule 01) and small general service (Schedule 07) customers, the inadvertent export must be rectified within 30 days. After 30 days, the customer may elect to turn off the system or move to Schedule 6 or 8 (exporting service). For Schedules other than 1 or 7, the customer must immediately open the AC disconnect until the issue that caused the export is remedied.