Pasadena is not only the home for Run on Sun, it is also my home for many years now. Pasadena likes to think of itself as a forward looking, environmentally conscious city. So it was a bit of a blow to see the latest Power Content Label for our home-grown utility, Pasadena Water and Power (PWP), which reveals that when it comes to powering this city sustainably, we still have a long way to go!
Under California law, (Senate Bill 1305, Sher, Statutes of 1997), electricity retail suppliers are “required to disclose to consumers which types of resources are used to generate electricity being sold." October 1 is the deadline for utilities to report this info to the California Energy Commission, and they are then required to disclose it to their customers by way of a flier included in the bill. The disclosure is known as a Power Content Label and it breaks down energy sold by source and compares it to the overall mix in the state.
Here is PWP’s PCL for 2015:
|ENERGY RESOURCES||2015 PWP POWER MIX||2015 CA POWER MIX|
|Biomass & waste||15%||3%|
| Large Hydro
| Natural Gas
Wow, that’s a lot of fossil fuels, with the majority of it coal. Contrast that with the rest of the state where coal is roughly 1/6 of the factor that it is at PWP, and keep in mind that you produce 2.1 pounds of CO2 per kWh when burning coal (on average) compared to just 1.2 pounds from burning natural gas.
Worse still, solar makes up 0% of PWP’s overall mix, compared to 6% for the state overall.
If there is a silver lining in these numbers it is this: 2015 is an improvement over the past. As recently as 2013, coal was a whopping 52% of PWP’s total power. So our hometown utility is getting better, but we are a long way from where we need to be!
(*Unspecified means “electricity from transactions that are not traceable to specific generation sources.")
Every September we pack our bags and head to the largest solar conference and exposition in the country; Solar Power International. This is when we get to connect with the broader solar community, advocates, and friends working far and wide for the betterment of the world through distributed clean energy. It is also the time when manufacturers unveil their latest technologies. These technology improvements come fast and furious in an attempt to stay ahead of the curve in a competitive industry. Just two years ago when I started working with Run on Sun we were able to get 270 watt panels from LG. What is coming from them in the next year will blow your mind. Here is my run down of the top take aways from SPI 2016…
Some of you may have seen the three part series Run on Sun’s CEO, Jim Jenal, wrote recently about what we need to do to be sustainable as an industry facing a crisis of increasingly shoddy workmanship and shady business practices. As part of the convention’s educational program, Jim was invited to participate on a panel of solar professionals to discuss the future of residential solar. The panel consisted of a wide range of backgrounds including a representative from a national company, Sunrun’s Michael Grasso, Rick Luna from a municipal utility CPS Energy, Ed Murray from a medium sized company, Aztec Solar, as well as national advocacy group SEIA, and Jim representing the small installer at Run on Sun.
The panelists discussed their take on who will dominate the residential solar space and what will the predominant business model be in five years. This was a perfect platform to raise the very real issues of quality facing the industry and Jim did not disappoint! Of course Sunrun’s Grasso asserted that national scale companies continuing the leasing model with storage will dominate in the future. But there were many nods of agreement in the audience when Jim insisted that the current status quo is not sustainable. Giant publicly traded national companies operating in the red and pushing customers into bad deals are going to cause a backlash. We’ve already seen many law suits and bankruptcies in the industry. Solar City’s Better Business Bureau rating in the Bay area is an embarrassing 80% negative. The notion that Ed Murray, from SEIA, put forth that the market will naturally take care of the bad companies is just not a sustainable way forward or an ethical one. As more and more consumers get hit with bad contracts and solar systems, the market will be left with a bad taste for solar. The people in this industry who are doing it for the right reasons, aiming to help people save money and reduce their impact on the ecosystem need to demand that there is more oversight over the quality of systems and some legal standards around contracts.
Jim’s comments seemed to be well received in the audience as most people attending were people who work in solar for the right reasons given they are investing in the hefty price-tag to attend the convention. But the disparate opinions on the panel itself was interesting to say the least. I don’t know if the reps for big companies are just out of touch with what is happening on the ground or if they are in denial.
Everyone agreed that a future will include storage or other bundled options for improving home efficiencies. However, Jim noted that storage needs to be presented to clients in a transparent way so they understand the true value of storage and whether it makes sense for them or not. If you are on a tiered rate system with no demand charges there likely is no value in storage. Solar stakeholders from advocates to installers need be fostering business practices that focus on transparent education for consumers instead of just closing every sell if we are to survive as an industry and continue to grow solar as the incredibly valuable resource that it is.
We have been installing exclusively LG panels since 2012. Why? We believe LG panels are the best for our clients for two main reasons. 1. As a diversified company we, and our clients, can rely upon them to stick around to back their 25 year warranty no matter what happens in the wider solar industry. And 2. LG has an incredible R&D department churning out ground-breaking improvements keeping them at the top in both quality and output year after year.
Last year LG announced 320 watt panels would be coming and we were fortunate to be one of the first to install these at a beautiful home in Altadena last Spring. This year they have several incredible new announcements:
The Enphase booth was seriously hoppin’ throughout the expo! Unsurprisingly with a total redesign of their system from the microinverter to the cable and even a special junction box.
All of these improvements come together to create a system that includes the microinverters we know and trust at a lower cost with a simpler and quicker installation.
The large majority of Run on Sun’s solar installations are being held together by the great racking products from Everest. This is because their materials are the most solid and well thought out racking product for standard pitched roofs on the market today. Their booth at SPI included a new “shared rail system” which allows two panels to come together on a single rail cutting down on the total number of rails needed for an installation. This system incorporates the same beefy product we trust with a reduced overall cost and installation time on the roof. It also doesn’t hurt that the entire team at Everest Solar Systems are great people and local to SoCal too!
Pasadena’s Idealab, an incubator, has been consulting with Jim on a revolutionary new product - the PV Booster - at their start up Edisun. They unveiled their dual axis tracker system at SPI. The system is designed for large flat roofs (and even carports) and potentially can increase output by up to 40% by tracking the sun throughout the day.
We were excited to see the system on display as they have developed quite a bit over the last six months of consulting with Jim. There was a lot of interest in the system at the show and we hope to help move their vision forward by installing some projects using their system locally here in Pasadena in the coming year.
Every year Run on Sun participates in Solar Fred’s Tweetup. It has become an event of close friends and allies. This year was a very special Tweetup as mainstays Pam Cargill and Martin Hamon got hitched in a truly extraordinary ceremony! Pam was walked down the “aisle” by a mascot Sun to the tune of “Here Comes the Sun". The ceremony included as many solar-love metaphors and quips as possible as Reverend Solar Fred officiated. Apologies for my blurry photo but it really was an event to remember. If you have pics to share with the happy couple you can share them on their dropbox here and relive the moment on Twitter with #SPIdo.
It is easy enough to cast aspersions, but it is far more valuable to offer suggestions for improvement. Having devoted 3,000 words to the former, it is time offer some thoughts on the latter.
I attended a solar workshop sponsored by our favorite distributor, BayWa r.e., and I heard the head of a solar company offer what might have been the saddest assessment of success I had ever heard. This man had built his company to become the largest player in his region, but most of the time, he said, “I wish I could go back to being just two guys and a truck." Growth is hard, and with it comes the risk of shoddy work creeping into your projects. (Indeed, one of the jobs that we highlighted in our first post was done by a company that once had a great reputation, but grew too fast and lost control of quality.)
When a company becomes too big to fulfill its obligation to provide top-quality work, it is too big.
A greater emphasis on training is one way to grow while still keeping the quality high. NABCEP is a good step in that direction, but companies need to support their employees to get the training that they need. (Of course, this says nothing about companies that are looking to rip people off - they represent an entirely different type of problem. More about dealing with them later.)
Right now the solar industry treats consumers like customers, and that’s a problem. Customers represent a transactional relationship - gas stations and fast food restaurants have customers. The customer hands over their money and gets a commodity in return - end of story. But purchasers of solar power systems are entering into a long-term relationship with the product that we are selling - quite likely the longest lived product they will ever own, short of the house itself. A relationship can only last that long when it is founded in trust, and that is the nature of a client relationship.
Recognizing that we are entering into a client relationship changes the focus from the short term transaction to the long-term process of building confidence. That means starting with absolute candor and at every step in the process enhancing the client’s trust. The solar professional owes the client three duties: a duty of candor, a duty of communication, and a fiduciary duty. The consequence of those duties is that you have to keep your client in the loop, and you must safeguard your client’s financial well-being.
How do you fulfill those duties? By communicating clearly at every step in the process, identifying and disclosing problems as they arise, and by providing comprehensive contracts and then living by that contract (i.e., keeping change orders to a minimum).
Solar companies need to provide comprehensive disclosures to their clients. At a minimum, such disclosures should include:
Such comprehensive disclosures would eliminate the scourge of “generic solar systems,” and would allow consumers to make more accurate comparisons of competing bids.
I spoke about many of these issues on a panel this week as SPI. There was a great deal of agreement among the panelists, despite our disparate backgrounds ranging from a (refreshingly progressive muni utility) to Sunrun to me. But the one comment that bothered me the most came from industry veteran and CALSEIA board member, Ed Murray. In response to my stated concern that the bad business practices documented in my first two posts in this series constituted a serious threat to the industry, Mr. Murray’s response was that “the market will take care of it, bad companies will fail and the good ones will survive, hopefully without too much of a black eye to the industry.”
If only it were that easy.
We rejected such laissez faire notions with the rise of the modern regulatory state decades ago, and to suggest that the solar industry can or should survive without additional regulatory involvement is misguided. The solar industry is far less regulated here in California than it is in many states. For example, to participate in the solar incentive program in New York solar installers must be NABCEP certified. Such a requirement here in the largest solar market in the country would go a long way toward cleaning up our act.
CALSEIA has a consumer complaint process - consumers who feel they’ve been badly treated by a solar company in California can start the process by clicking here to fill out their complaint form - but the process itself is secret, and the rest of the consuming public never learns about those complaints.
Similarly, utilities often have experience with bad solar contractors who do shoddy work, but they don’t publicize what they have learned so the public remains uneducated about the bad actors out there. That should change.
Unfortunately, that leaves us, for now, in a position where the burden remains on the potential client to do the homework needed to find a reliable contractor. NABCEP’s member list is a good resource (although made less so since you can no longer sort results by zip code), as is CALSEIA’s. State contractor’s boards - responsible for licensing contractors - are a good source to verify that the contractor is properly licensed, and to determine whether there are any outstanding complaints against them. (For California, here is a link to the “Check a License” page at the state contractors board.) Yelp, Angie’s List, and the BBB can all be helpful. But consumers must demand to be treated like the clients that they are, and reject solar companies that fail to honor that demand.
Editor’s Note: In Part One of this three-part series on the crisis facing the residential solar industry, we wrote about the growing potential for a client backlash due to the increasing prevalence of shoddy work. Today in Part Two we turn to an even greater threat to our industry’s sustainability: the unethical, and sometimes outright illegal, business practices employed by some solar companies.
Solar companies used to have a pretty simple business model: find a potential client (usually because they contacted you), do a site evaluation, write up a bid, sign a contract, and do the job. The density of solar companies in a given area was pretty low so there was very little direct competition. There was no such thing as social media and you never heard an ad for a solar company on the radio.
By the time we founded Run on Sun in September 2006, that model was starting to change. SolarCity was a thing, but its lease model wasn’t. Major players like Sunrun, Vivint Solar, and Verengo did not yet exist. But with the dawning of the California Solar Initiative in 2007 and the end of the cap on the federal ITC in 2008, the solar industry was turning into the Wild West. Add in the collapse of the housing market at the end of 2008, and all of those investor dollars that had been earmarked for mortgage-backed securities had to go somewhere else.
Voila, enter the solar lease (and its evil cousin, the residential PPA). Readers of this blog know that Run on Sun has never offered leases, and we have explained our reasons for avoiding leases in great detail many times. Yet for awhile, they were all the rage. As one potential client who decided to go with a competitor’s lease explained to us, “How can you compete with free?" Of course, those leases were far from free, but he had a point. If the leasing salesperson glosses over the details, as numerous lawsuits have alleged that they do, the consumer being pushed to sign on the dotted line may get swept away with an offer that sounds too good to be true.
Proper disclosures would go a long way toward solving this problem, but the solar industry certainly isn’t pushing them. Indeed, driven by the largest players in the industry, trade groups generally resist calls for standardized disclosures under the absurd logic that the marketplace will handle this itself. Ah yes, the “invisible hand." But when the leasing giants bring armies of marketers, pushy salespeople, and corporate lawyers into the marketplace, what chance does the average consumer have? This is an unfair fight and it is stacked against consumers - our potential clients - and the powers that be know that, and are ok with it.
But that approach is unsustainable.
Even crazier than the lack of proper financial disclosures is the abject failure to even disclose the products that are going to be placed on the consumer’s roof and left there for the next twenty years! We are constantly being contacted by people who have been pressured to sign a contract for what can only be described as a generic solar system. When you press them on the details it turns out that the high-pressure solar salesperson never disclosed the actual equipment that is being proposed.
A gentleman who called the other day is representative - he has been talking to SolarCity for six months but all he knows is that they are purporting to put a “6.6 kW solar system” on his roof for $27,000, to be financed over 20 years at 3% interest. That 6.6 kW system starts out at $4.09/Watt (not a deal, even in SoCal) before you tack on an additional nearly $9,000 in interest over the life of the deal, bringing that actual cost (before ITC) to $5.45/Watt!
But here’s the kicker - this homeowner does not even know the make or model of the panels that will be on his roof. He doesn’t know what type of inverter will be used, or its make or model. And he certainly doesn’t know what sort of racking is going to hold this all together.
So let me just ask you this: who among you would spend $36,000 on a generic car? No info on the car at all, other than you are stuck with it for the next twenty years and it is a generic, four-door sedan. I submit no one would; and yet, major players in the solar industry are asking consumers to purchase an over-priced generic solar system, every day of the week.
That is not sustainable.
Years ago I worked for an environmental group that funded its operations in part by way of a canvass; that is, eager young men and women who would fan out each evening into a targetted neighborhood going door to door, explaining our work and trying to encourage strangers to contribute. My role in this process was to educate the canvassers on the policy issues that we were then pursuing so that they could answer questions with homeowners at their front door. If that sounds like a tough way to make a living, it is. Many canvassers are paid on commission - have a dry night and you come up empty.
But some of the environmental group’s canvassers were consistently successful. They had the moxie to press until they could close - and if that meant stretching the truth a bit, or a lot, they felt it was alright because they were working in service to a greater good.
And so it seems to be with solar canvassers. The ones who succeed won’t take no for an answer, and they are apparently comfortable saying whatever is necessary - regardless of how disconnected it might be from reality - in service of the good of getting more solar on more roofs. Or is it more in the nature of self-service, just plain old greed?
Run on Sun doesn’t run a canvass, but we regularly hear from potential clients who have had someone camp out on their doorstep and all but refuse to leave until the hapless homeowner signs a contract. (We spoke with one woman, not a native English speaker, who had signed a contract with a canvasser who would not leave, for a system roughly twice the size of what could effectively be installed on her roof.) More distressingly, these tactics seem to be especially aimed at senior citizens, who for whatever reason, find it harder to turn these people away.
Is there anyone out there who enjoys being on the receiving end of such high-pressure tactics? Of course not. So why do we subject consumers to them? That’s simple, because they often work, at least in the short term. And if all you care about is the short term, then this works for you as a solar company.
But it is unsustainable.
Which brings me to lead generation, quite possibly the most annoying aspect of solar business models today.
Several times a day, each and every day, we receive emails imploring us to purchase leads for hot solar prospects. Once or twice we have followed up on a proffered lead that was provided to us, only to discover that the person on the other end of the phone is irate over having been called twenty times in the last two days when all they did was try to make use of a “free” solar calculator on a website that required them to submit their contact info before they could use it.
Many lead gen mills use robo dialers to repeatedly call potential customers, and often do so without concern for such niceties as the National Do-Not-Call registry. Such tactics might generate leads, but they are also illegal, and the solar company that contracts with the lead gen mill is liable for their conduct - as Verengo found out when they were sued and forced to settle the case for more than $2,000,000.
By definition, that which is illegal is unsustainable.
No industry can long survive treating it’s customers with such contempt.
The graph of customer experience for SolarCity is from the BBB website serving the San Francisco Bay area. 82.9% of SolarCity’s customer reviews were negative! Now it certainly stands to reason that unhappy customers are more likely to write a review than happy ones, but a six to one ratio is a troubling statistic no matter how you spin it.
Not just class action lawyers are taking notice, as state Attorneys General and even members of Congress are calling for investigations into questionable business practices of solar companies across the country.
For example, Arizona’s Attorney General, Mark Brnovich, has brought multiple cases against solar companies for fraudulent business practices, including this one against the aptly named, Stealth Solar, alleging that the company made fraudulent claims:
Some examples of those statements include: “cannot even add one cent to your personal budget,” its customers can “save tons of money every single month,” and that “utility bills will rise 8-14% per year if you don’t get a PV System”.
The Arizona Attorney General’s Office received approximately 50 consumer complaints against Stealth. Many customers did not receive the promised savings and even experienced an increase in their electricity outlay due to the cost of solar equipment.
We ignore this building backlash at our peril.
In my final installment I will offer some suggestions for change from within the industry—before it is imposed upon us from without.
Here in SoCal we are blessed with endless warm sunny days. The down side however is that it can be many months between invaluable air-purifying rain showers. For your solar array, this means there is nothing to wash away the accumulated dust and detritus from nearby trees. In summer months ash from nearby mountain fires adds to the mix. Consider this a Run on Sun PSA…
IT’S TIME TO RINSE OFF YOUR PANELS!!
These panels needed to be cleaned just to get the inverter to turn on!
(Didn’t help that the installer put the panels under a tree!)
When discussing solar with new clients often the topic of cleaning comes up. This is because some solar companies use the concept of cleaning your array as a way to convince you you need a leased system with ongoing maintenance. However, we believe this is a bit of a scam. You don’t need to pay someone to get up on your roof with a squeegie every week. Most home owners have the ability to douse dusty panels from the ground with a strong nozzle attached to a garden hose. Really the benefit is nominal unless it has been six months since the last rain, such as the case in Southern California. As for cleaning the panels, rinsing with a hose is fine (though some insist that is heresy and only deionized water should be used). Do it first thing in the morning so there is no thermal shock to the panels.
Check out this recent case study that brought this issue to our attention:
Shiny new panels at Chandler School
Last week we heard from a client who did some great analysis using the Enphase monitoring on their system before and after he decided to clean his panels. He found there was an 8% improvement in the period after cleaning. Run on Sun’s CEO Jim Jenal compared this to the monitoring on another system (Westridge School) which wasn’t cleaned and had a similarly unshaded southern facing array. Over that time period Westridge School’s daily average production reduced 8.66%. This means that our client actually had an increase of production of 16.6% by cleaning his panels!
Generally, cleaning an array results in an improvement of between 5-10%, so his panels were exceptionally impaired by the fallout from our summer fires! Not surprisingly, given his location in the foothills of the San Gabriel Mountains. However, for anyone in the Los Angeles metro area, early September is a great time to get out and restore the shiny clean sheen to your array. After all, who knows when the first winter rain will come?
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