SE Engr. Solar Policy, Economics, and Sustainability 4 — Questions and Answers
Question 1: How does a California NEM 3.0 (Net Billing Tariff) customer's export compensation compare to NEM 2.0?
- Exports are credited at lower avoided-cost-based rates instead of near-retail rates (Correct answer)
- Exports are credited at double the retail rate
- Exports are credited at a flat wholesale rate fixed for 20 years
- Exports receive no credit at all
Correct answer: Exports are credited at lower avoided-cost-based rates instead of near-retail rates
The Net Billing Tariff pays exports based on the Avoided Cost Calculator, which is well below retail rates on average.
Question 2: Under the NEM 3.0 Net Billing Tariff, which addition most improves the economics of a residential system?
- Switching to a flat-rate tariff
- Battery storage to self-consume solar and shift exports to high-value hours (Correct answer)
- Using lower-efficiency modules
- Oversizing the array to maximize exports
Correct answer: Battery storage to self-consume solar and shift exports to high-value hours
Low export values make self-consumption and evening dispatch from storage more valuable.
Question 3: A commercial customer has high monthly demand charges driven by a short 4 PM peak. Why might PV alone fail to reduce those charges reliably?
- PV increases the customer's peak demand
- Utilities don't measure demand for solar customers
- Demand charges apply only to exported energy
- Clouds or late-afternoon sun angles can leave the peak interval with little PV output (Correct answer)
Correct answer: Clouds or late-afternoon sun angles can leave the peak interval with little PV output
Demand charges are set by the highest interval, so one cloudy interval at peak can wipe out the savings without storage.
Question 4: A PV system costs $24,000 after incentives and saves $3,000 per year. Ignoring degradation and rate escalation, what is the simple payback?
- 6 years
- 12 years
- 8 years (Correct answer)
- 10 years
Correct answer: 8 years
$24,000 divided by $3,000 per year is 8 years.
Question 5: Which effect makes LCOE higher when everything else is held constant?
- A longer system lifetime
- A lower annual degradation rate
- A higher capacity factor
- A higher discount rate (Correct answer)
Correct answer: A higher discount rate
A higher discount rate raises the cost of capital and shrinks the present value of future energy, so LCOE rises.
Question 6: What is the main purpose of the federal antidumping and countervailing duty (AD/CVD) orders on solar cells and modules?
- To offset unfairly priced or subsidized imports (Correct answer)
- To fund residential solar rebates
- To set interconnection standards
- To require module recycling
Correct answer: To offset unfairly priced or subsidized imports
AD/CVD duties counter imports sold below fair value or supported by foreign government subsidies.
Question 7: In community solar, how do subscribers usually receive the benefit of their share of the shared array?
- Bill credits on their utility bill in proportion to their share (Correct answer)
- An annual federal tax refund check
- Free equipment installed on their roof
- Physical wiring from the array to each home
Correct answer: Bill credits on their utility bill in proportion to their share
Virtual or community net metering credits each subscriber's bill based on their allocated output.
SE Engr. Solar Policy, Economics, and Sustainability 4
How does a California NEM 3.0 (Net Billing Tariff) customer's export compensation compare to NEM 2.0?