Solar firm tells its Long Island customers to opt out of new electric rate; PSEG pushes back

Sunrun, one of the nation’s largest solar installers, is telling its thousands of Long Island customers to opt out of LIPA’s new time-of-day rates, but PSEG Long Island says not so fast.

In a message to customers this summer, Sunrun, which has been marketed through Costco stores and offers primarily leased solar systems, said the new rates will likely cost its customers money, with few exceptions.

"This new rate could result in a higher utility bill for you," Sunrun said, urging them to check their bill to see if they’ve been switched to rate number 194 — the new standard rate from PSEG. "In order to maximize potential savings, we strongly encourage you to opt-out of the new time-of-day off-peak rate and choose to remain on rate 180," a flat rate.

However, PSEG Long Island, which operates the grid under contract to system owner LIPA, said Sunrun’s advice doesn’t apply to all customers and noted many could just as easily see lower bills. And the company emphasized that customers have a year to test out the new system under a price guarantee that gives them the difference back if the new rates lead to higher bills.

PSEG has switched around half of LIPA’s 1.1 million customers to the new rate, and it plans to finish the migration by year's end. Meanwhile, nearly 1 in 10 LIPA customers have solar, the highest penetration rate in the state.

Customer-financed solar installations on Long Island and across the country are facing a big challenge after the Trump administration’s "Big Beautiful Bill" nixed a 30% federal credit for rooftop solar panel purchases by year’s end, a loss of thousands of dollars for systems that can cost from $20,000 to $40,000. Leased solar systems such as those Sunrun markets got a carve-out through 2027.

The new standard time-of-day rate charges customers a higher rate during the daily peak period of 3 p.m. to 7 p.m., but reduces the charge for all other hours. Those who can move even more usage to the 10 p.m. to 6 a.m. hours can save even more. The peak hike doesn’t apply to weekends and holidays.

PSEG, in an email to Newsday, said customers, even those with solar panels, should carefully consider their usage patterns and solar production before switching.

While the new rate could increase some bills for customers with solar, "it also could result in a lower bill," said spokeswoman Elizabeth Flagler. She emphasized there’s "nothing about the use of solar net metering" — the system that allows customers to bank excess solar credits for use when the sun’s not shining — "that would inherently lead to higher bills." Only around 2% of customers have opted out of the new rate, PSEG said, and the early evidence for the half million on the new rate overall is that they are saving money.

Whether the new rate is viable for solar customers depends on several factors, PSEG said: the size of the solar system "relative to annual consumption, the orientation of the solar panels (south versus west), and the pattern of usage from other appliances."

The challenge under the time-of-day rate for solar customers is to keep close track of peak versus off-peak usage to keep it aligned with a new system that banks stored solar energy in separate peak and off-peak banks. Stored off-peak solar credits are automatically applied to off-peak usage, while banked peak credits can be used during the 3 p.m. to 7 p.m. period.

PSEG also has a process that allows customers to exchange credits among banks when needed. It requires them to request the change, with peak credits having a higher value than off-peak. There’s also a super off-peak bank for credits used during that time.

"Customers can exchange credits from one bank to the other, at an exchange rate proportional to the value of the credits," Flagler noted. "In that way, customers can save money on time-of-day rates, but it requires a once or twice per year bank exchange. This is particularly useful for customers who have a large solar system relative to their annual consumption. Customers can track their usage and decide if or when to request an exchange."

Sunrun’s email doesn’t explain that prospect for customers. Half the message involves showing its customers the various means for opting out, including calling PSEG’s customer help line.

Wyatt Semanek, a spokesman for Sunrun, said the message was part of an ongoing effort to "keep our customers informed about policies and changes that could impact the value they receive" from their solar system.

"This new time-of-day rate is likely to be less favorable for many of our customers — especially those without batteries — and could result in higher utility bills," he wrote in response to Newsday questions. "To maximize savings, opting out will be the best choice."

Those with batteries can use the system to make money, charging up the battery at night during the cheapest super off-peak rate and discharging the battery back into the system during peak hours as part of a PSEG program that pays them for their battery’s power.

PSEG noted it worked with solar companies as it was developing the time-of-use rates, and in the end, the solar industry "strongly endorsed the program."

"According to our industry research, we’ve found that we offer one of the most generous solar banking programs in the industry," Flagler said. "We track and credit bills in kWh. This means that when any excess generation is used, it covers the equivalent full cost of a kwh at that time it’s used. Many utilities convert to a small dollar credit to track the bank, a fractional portion of the kwh cost and only for a portion of the power supply component of the cost."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.