When Policy Contradicts Physics: Unpacking the VNEM PD with Data
The California Public Utility Commission (CPUC) has tied itself in a knot, according to its recent findings in the VNEM PD which directly contradict accepted laws of physics. While Finding of Fact 45 states that sending the right price signals to the tariff customers would provide more benefits to the grid, Finding of Fact 25 contradicts this by suggesting that onsite consumption of renewable energy isn't a necessity for multi-tenant properties. This not only goes against the first principles of energy physics by claiming electrons do not follow the path of least resistance but also encourages behavior that could harm the grid. This is because the tariff design under the ACC price does not factor in the customers energy consumption in the value of onsite resources, which disaggregates onsite supply from onsite demand, ultimately telling customers there is no correlation between the onsite generation and their net load impact on the grid.
The main cause for concern? Based on the proposed decision, if multi-tenant properties shift their energy use using solar and storage to support the grid, it would not have an effect on the financial benefits gained. Without a financial benefit, this would deter multi-tenant properties from grid supportive behavior and in effect have a negative impact on the grid and all ratepayers. Essentially, the proposed decision encourages anti-behavior that works against the objectives of Finding of Fact 45, and is a missed opportunity to benefit the grid through rate design.
What behavior are we talking about? Simple things like:
Charging cars at better times that don’t rely on the grid imports.
Running central building load when solar is available.
Shifting peak time loads to better times that don’t rely on the grid imports.
Automating appliance use during better times that don’t rely on the grid imports.
Most importantly - Programming a battery to store surplus solar power and discharge it to avoid use of grid imports.
Real-World Data Analysis
Given the CPUC’s decision to label all energy generated from onsite solar and storage as ‘exports’ to the grid compensated under the ACC rates, Ivy took the initiative to model the potential impact. Utilizing real meter readings from a 130 unit apartment complex with a 375 kW solar array in California operating under the current VNEM tariff, Ivy simulated a 750 kWh battery paired to the solar array operating under various control logics.
Grid Implications of the ACC Rates
Using a battery controller optimized for self-generation value as provided by the ACC rates, Ivy aimed to understand how this would truly impact the grid and the CPUC's objectives.
The results were telling. The ACC price signal creates a convoluted communication line between the generator and load. As previously found on the record, the laws of physics such as Kirchhoff's voltage and current laws, apply to VNEM systems. This means that when onsite generators (solar+storage) are producing energy the electrons follow the path of least resistance and serve onsite loads before exporting to the grid. In the recent PD, the CPUC is designing the VNEM successor ignoring these fundamental principles. This directly explains the discrepancy in the grid beneficial behavior of a VNEM system maximizing its value with the ACC price as a signal because it does not have to consider its net-load impact on the grid when producing energy.
The Potential of Netting
A different approach, disregarded by the commission, is to simply net the energy based on the physics, that is to consider that energy generated onsite up to the energy consumption onsite is consumed onsite, and any generation greater than consumption is exported. Here, the battery maximizes onsite consumption, taking into account the actual load of the 130 benefiting accounts and the net-load impact of the property on its grid connection.
This strategy sends a clearer signal to both generator and load activity, ensuring a smoother 'duck curve' at their grid interconnection point. The resulting balance and demand planning benefits all ratepayers by avoiding costly transmission and distribution upgrades.
How does it do this? By reducing max energy demand in most months as well as reducing ramp rates and peak power demand needs for this community.
Introducing the Hybrid Controller
However, it's not all black and white. Ivy explored a 'hybrid' approach, melding the ACC price signal with self-consumption. This controller adjusts its strategy depending on the month, promoting self-consumption for most of the year but switching to the ACC method during peak grid use months (August and September).
Quantifiable Grid Impacts: A Comparative Analysis
To understand the true implications of each controller, Ivy studied the net-load profile impacts. The key considerations:
Maximum Average Hourly Demand: By comparing just a solar system with a combined solar and storage system, it was observed that, for every month barring August and September, the ACC battery controller placed a higher maximum average hourly demand on the grid than self-consumption controllers.
Average Ramp Rate Between 4-9PM: Across all months, except August and September, batteries controlled by ACC exerted significantly more pressure on the grid during peak hours than those optimized for self-consumption.
In Conclusion
The CPUC's findings seem to be at odds with practical implications for the grid and ratepayers. Ivy's analysis demonstrates the potential challenges and offers easy alternatives to avoid negative impacts. It’s clear that any decision will have widespread implications, not just for the future of California's energy, but for ratepayers and the stability of the grid.
If you are interested in digging into the analysis in detail, go to thislink.
Pioneering the Future of Multi-Tenant Solar Energy Management
2024 was a trailblazing year for Ivy Energy, where we shattered barriers, redefined possibilities, and delivered innovative solutions to address the multi-tenant solar split incentive challenge. By driving product advancements, forging impactful partnerships, and scaling operational processes, we empowered multi-tenant properties to embrace clean energy with confidence.
A Year of Growth and Market Expansion
Ivy has grown its active project pipeline 450% compared to 2023, with a line of sight to clear +600% in active projects by the end of the year. Our tech-enabled solutions empower more communities than ever. With $18M in Series A funding (Read more) and the strategic acquisition of Glow Energy (Read more), we are poised for unprecedented growth and impact. This investment enables us to enhance our technology, streamline operations, and expand our reach into new markets nationwide.
Entering new markets with increased resources allows us to address diverse energy challenges and deliver tailored solutions to property owners and tenants. Additionally, the launch of our consulting arm provides expert guidance for our clients and partners to save money and enhance ROI while navigating intricate solar investments.
Meaningful Operational Updates
At Ivy, innovation isn’t just about technology—it’s about creating digital tools that empower our clients and their tenants:
PropTech Integrations: Partnered with RealPage, Entrata, and Yardi to automate rent roll syncing, move-in/move-out updates, and direct charge posting to resident ledgers. These integrations reduce monthly processing time by up to 2 hours per property while enhancing data accuracy and operational efficiency.
NEM Credit Delay Optimization: The Utility Coordination team adopted the CPUC informal complaint process to reduce delays in NEM activation after PV solar system commissioning. This improvement cut the average resolution time for delayed NEM credits from 123 days in 2023 to 49 days in 2024, allowing property owners to see Net Operating Income over two months sooner on average.
Platform Advancements that Lead the Industry
Our engineering team broke new ground, ensuring our platform stays ahead of the curve:
Migrated to a new infrastructure processing system for faster processing and further automation improvements across operational features.
Introduced IvyDual in response to regulatory requirements in California, which allows us to enter new markets where consolidated billing is not viable.
AchievedSOC 2 Compliance, reaffirming our commitment to data security. (Read more)
Built initial public API for Conservice integration and new utility data access pathways, strengthening our platform’s versatility and reliability.
Empowering Positive Experiences with CX
At Ivy Energy, our customers rely on us as true partners in their clean energy journey, helping them achieve long-term NOI growth while providing exceptional support for property owners and tenants. We consistently deliver this experience by simplifying complex utility processes and offering our white-glove service that ensures our clients feel supported, informed, and empowered to succeed. This year, Ivy’s Customer Experience Team launched two significant platforms:
Ivy Implementation Portal: A step-by-step, transparent portal that simplifies solar implementation for our clients and partners across multiple organizations. (Watch a walkthrough of the new portal here.)
Resident Help Center: Educate tenants about the solar program with helpful resources and offer direct support online or by phone. (Explore the Help Center)
Shaping the Future Through Thought Leadership
In 2024, Ivy Energy reinforced its position as an industry leader; our Virtual Grid 3.0 impressed the judges and earned first place in Solar Power World’s “Best in Show” award for large-scale solar innovation. (Read more)
Leadership team members Alex Dogan, Tanya Kuhn, and Sean Nam were celebrated in San Diego Business Journal’s Leaders of Influence in Technology 2024 for their contributions to advancing sustainable energy. (Read more) Ivy was also featured in Alt Energy Magazine (Read more), San Diego Business Journal (Read more), and on Solar Academy. (Read more)
Logan Carter showcased Ivy’s groundbreaking innovations in a main stage speech at Cretech NY (Watch here), an engaging appearance on the IMN Podcast (Listen here), and a deep-dive interview with Chris Moreno, also known as “Mr. PropTech.” (Watch here) Ivy’s policy team further expanded its influence by authoring a Model VNEM Whitepaper, a critical guide to enabling multi-tenant solar models nationwide. (Read the Whitepaper).
Measurable Environmental Impact
This year, Ivy Energy amplified its environmental contributions, with contracted units in implementation set to offset an astounding 109 million pounds of CO2. Meanwhile, active units have already offset 9 million pounds of CO2, demonstrating our ongoing dedication to reducing carbon emissions.
Looking Ahead to 2025
As we celebrate 2024’s successes, we are always looking to the future. In 2025, we’ll continue to push boundaries, deliver innovations that empower our clients, improve tenant experiences, and lead the multi-tenant housing sector toward a sustainable future.
A Message from Dover Janis, CEO of Ivy Energy
“2024 was a year of progress and adaptation. While utility-caused delays challenged our growing pipeline, our focus on agile problem-solving reduced their impact and kept the market moving forward. This is a testament not only to the dedication and focus of our team but also to the strong macro-level foundation that the onsite energy business model provides for real estate owners, even in the face of monopoly-driven resistance. With a large and expanding customer base and hundreds of projects, we have continued to validate the transformative potential of clean energy solutions for shared communities. I’m incredibly proud of our team—now among the most mature, knowledgeable, and experienced in the industry—as we trail blaze the path forward. The market is primed to grow and drive transformative change in local communities. I’m deeply grateful to our partners and customers, whom we have the privilege of serving every day as we continue to lead the way.”
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