Regular readers of this blog will know that solar-friendly policies are under constant attach by the utilities, especially the three Investor-owned utilities (or IOUs as they are known), PG&E, SDG&E and our own SCE. Well they are at it again, with rate proposals before the California Public Utilities Commission (CPUC) that could harm both solar and energy efficiency measures alike. Fortunately, we have an opportunity to have our say - here’s our take. (H/t our friends at CalSEIA.)
Current policies in California, most notably net metering, along with a tiered rate structure (whereby you pay more for electricity as you use more) have provided powerful incentives not only for consumers to install solar, but to also take proactive measures to reduce their energy consumption. As a result, energy use in California over the past twenty years has grown slower than the growth in population despite the explosion of new electronic devices in homes and businesses during that time. Indeed, California has lead the way for the rest of the Nation, proving that you can have a twenty-first century lifestyle and still reduce your energy demand.
In other words, these policies have been a success.
The proposals being floated at the CPUC would change rates throughout the three IOU service areas (i.e., much of California) and threaten that success. In particular, they are seeking to add a flat, monthly fee to everyone of $10 to all bills, regardless of use and to reduce the number of tiers from four to two. In addition, the rate for the lowest tier would increase, making this a double-whammy not just to solar owners, but to the poorest electric customers who will see a rise in their rates. (So much for the utilities’ concern over hurting the poor!)
Fortunately these changes are not yet cast in stone and the public, particularly advocates for solar and energy efficiency, have a chance to have their voices heard. The CPUC is holding a series of public hearings, some in the Run on Sun service area, as well as others around the state. Here are the upcoming hearings:
September 29, 2014
2:00 pm & 6:30 pmFontana City Council Chambers 8353 Sierra Avenue Fontana, CA 92335
September 30, 2014
2:00 pm & 6:30 pm?Temple City Council Chambers 5938 Kauffman Avenue Temple City, CA 91780
October 2, 2014
2:00 pm & 6:30 pmPalmdale City Council Chambers38300 Sierra Hwy, Suite APalmdale, CA 93550
October 9, 2014
2:00 pm & 6:30 pmHoliday Inn Chico – Conference Center685 Manzanita Ct.Chico, CA 95926
October 14, 2014
2:00 pm & 6:30 pmFresno City Council Chambers2600 Fresno StreetFresno, CA 93721
We are planning on attending the hearing in Temple City. If you attend one of these important hearings, please let us know about your experience in the comments.
It is with considerable sadness but much gratitude that we announce the departure from Run on Sun of co-founder, Brad Banta. (We are consoled by the knowledge that Brad has agreed to remain connected by way of our Advisory Board, so we will still have access, from time-to-time, to his sage insights.)
The story of Brad and Run on Sun go all the way back to the beginning.
It was the Summer of 2006 and I was toiling away as a lawyer in an AmLaw 100 firm in downtown L.A. Brad was an entrepreneur who I had successfully defended from a bogus lawsuit. Brad possessed a great skill set; not only did he have an impressive technical background, but he also had an MBA and terrific business sense—two attributes I totally lacked. I had gotten the novel notion that starting a solar company might be a bright idea and I decided to pitch it to Brad during a Dodgers game. If memory serves, the Dodgers were on a terrible losing streak that month, but over beer and brats, I pitched, Brad listened, and the Dodgers broke out of their slump in mega-fashion.
It was an omen!
We founded Run on Sun two months later and over the years we settled into our fitting roles: I as CEO and the public face of the company, Brad behind the scenes as CFO, keeping us afloat even while the economy tanked and many others folded shop. Today, with Run on Sun sporting its biggest pipeline of projects ever, Brad is moving on to new challenges. To say that we wish him well is a massive understatement. Truth is, we never could have done this without his help. So thanks, Brad, for everything.
The fossil fuel industry has a problem—its customers hate its product. We purchase gasoline to fuel our cars and natural gas to heat our homes or cook our food, but we know as we do so that we are making the world hotter and dirtier. And the electricity that we get from the grid, far too much of it comes from burning coal, and every aspect of that industry, from mining (black lung disease, cave-ins) to burning (think belching smoke stacks like the one on the right) makes one recoil in disgust.
The natural result of that revulsion, is that we are constantly striving to use less of their products. Which hurts the bottom line, and that is something the fossil fuel industry cannot abide.
Particularly when it comes to solar. As solar becomes more affordable—and as more advantageous financing mechanisms become available—more and more people “go solar". Which means less revenue for utilities which drives their rates higher. Which makes solar more financially viable (if not necessary), thereby driving even more utility customers into the welcoming arms of your friendly, neighborhood, solar installer. This virtuous cycle for consumers is a vicious cycle for utilities, leading inexorably to their demise unless they change their ways—or solar goes away.
So far most utilities appear to be holding out for option B.
Of course the fossil fuel industry in general, and utilities in particular, are not sympathetic entities with the public so they need a different angle, a better hook if they are going to convince people to abandon solar.
Cue the Koch brothers funded Americans for Prosperity (AFP), and their faux concern for the poor.
In an article titled “How State Solar Policies Hurt America’s Poor,” (h/t Solar Wakeup) AFP Policy Analyst Justin Sykes advances the canard that net metering polices harm poor consumers. In a piece rife with inaccuracies, Sykes makes a number of misleading statements. Try this one:
Specifically, the average household income of solar-customers was $91,210, compared to the a median income of $54,283 for non-solar customers. A similar report this month on Nevada’s net-metering policy found 73 percent of solar-customers there have higher median incomes than the statewide average. Figures like these exemplify how net-metering policy fosters inequality in the way Americans receive and pay for energy. On average, low-income households spend an estimated 37 percent of their income on household energy bills, a burden that grows when coupled with increasing rates due to cost-shifting.
Sorry, but the data simply doesn’t support those statements.
Let’s start with the assertion that solar households have much higher median incomes that non-solar households.
We looked at all residential solar installations in California from 2008 to 2013 using data from the California Solar Initiative and ranked them by zip code. We then compared that to U.S. Census data reporting median household income for those zip codes. (If you click on the graphic you can actually explore the interactive visualization on our website.)
In every year, whether purchased or leased, the majority of solar was in zip codes where the median household income was at or below $75,000, with only a relative handful in neighborhoods above $125,000. Indeed, there were more installations in zip codes with a median income of less than $50,000 than there were in zip codes with a median income above $125,000!
Now to be sure, zip code averages are not the same thing as actual customer income, but actual household income of solar customers is not a publicly available piece of data, so this is the best proxy available (and presumably the same proxy available to the likes of AFP’s Mr. Sykes.)
And while we are debunking things, let’s take a look at the statistic about how “low-income households spend an estimated 37 percent of their income on household energy bills." Seriously? The link supporting that stat takes you to an article that provides no support for the number. But more to the point, how could that number even be possible? According to the U.S. Department of Health & Human Services, the 2014 Poverty Guideline for a family of four is $23,850, of which 37% would be $8,824.50, which works out to a monthly energy bill of $735!
Once again, the data tells a very different tale. According to the U.S. Energy Information Administration, the average U.S. household spends roughly $2,000 per year on all household energy (excluding transportation) and that figure is across all households, not just low income households. (In California, that average is below $1,500 thanks to energy efficiency measures adopted in the state.)
This is how the battle against solar is being fought: with misleading claims and made-up statistics.
But here is the reality: as solar gets cheaper, and innovative programs like solar loans and HERO PACE financing become widely available, more and more people will realize that they can afford solar and will jump at the chance, rich and poor alike.
UPDATE - We heard back from BWP - details at the end of the post…
The wizards at Burbank Water and Power have announced their solar rebate program will resume, but only for the lucky few who happen to be facing West. Here’s our take.
Having a stable, predictable solar rebate program is the key to making a solar program successful. Municipal utilities like Pasadena Water & Power, and investor-owned utilities (like SCE) participating in the California Solar Initiative, have had great success with their programs.
Then there are other munis, like Burbank Water & Power (BWP), that just can’t seem to get it right. BWP, like its similarly misguided neighbor, Glendale Water & Power, has had an on-again, off-again rebate program that baffles all who attempt to make use of it. Now, for a brief moment, BWP’s solar rebate program is on-again, sort of. During the month of August, potential Burbank solar customers are allowed to submit rebate applications (submission deadline is August 29 at 5:00 p.m.) for a lottery to be held on September 8th. The lucky 60 residential and 15 small commercial (<30 kW) customers who make the grade (no details on how the auction will actually be conducted have been released) will be advised of their good fortune by September 12th. Rebate amounts are $0.96/CEC AC Watt for residential and $0.73 for small commercial.
But wait, there’s more.
For the first time in our experience, a utility is limiting rebates for solar systems to only those which face in a generally westerly direction. In fact, systems facing true south are completely ineligible for rebates (as shown in the image to the left), even though such systems are the most productive!
BWP is essentially precluding the overwhelming majority of building owners from even having a chance at a rebate in their lottery system.
This continues a trend we have seen with other muni utilities (GWP we are talking about you) where solar programs are designed to be unsuccessful. It will be interesting to see if we can extract any data from BWP about the results of their lottery.
BWP’s Stated Rationale for Restricting System Azimuth
But why the restriction in the first place?
According to BWP, it is to insure that the power produced comes closest to overlapping with BWP’s peak afternoon demand from 4-7 p.m. Thus to qualify, systems have to be oriented between 200 and 270 degrees and have a minimum tilt of 5 degrees.
That seemed pretty arbitrary to us.
While we could understand a utility wanting to limit providing rate payer money to systems that yield the maximum benefit to those rate payers, there is certainly nothing magical about a limit of 200-270 degrees. In fact, somewhere around 270 should be the sweet spot for afternoon production, with a fall-off on either side. So why cutoff systems beyond 270 degrees?
We decided to run some models using NREL’s PVWATTS tool. We assumed a 10 kW system at a 10 degree pitch (a common residential roof pitch) and accepted the other defaults for the model. We then calculated the hour-by-hour output for systems with azimuths ranging from 200 to 330 degrees. Here are the results for the critical hours from 4 to 7 p.m.
All of the azimuth angles in the green box are acceptable to BWP, whereas all of the azimuth values in the red box are deemed unacceptable for a rebate from BWP.
But here’s the thing… see that green horizontal line? That represents the 4-7 p.m. output for our hypothetical array with an approved azimuth of 200 degrees. Yet five out of six azimuth values modeled here that are rejected by BWP, actually produce more power during the critical period than does our approved system at 200 degrees!
So what exactly is going on here? BWP’s asserted rationale does not hold up to scrutiny. Which begs the question, why, really, is BWP so seriously limiting who can participate in their lottery? It certainly is not justified by their desire to maximize 4-7 p.m. production. If that were truly the case, they should include azimuth angles all the way to 320 degrees. They would get more timely power production while opening their rebate lottery to many more potential customers.
How about it, BWP, what is going on here?
If you are a potential BWP customer who falls outside of the “accepted” azimuth band, you might want to contact the Solar Support program managers:
John Joyce: firstname.lastname@example.org or
Alfred Antoun: email@example.com
If you get a response, please add it to the comments.
UPDATE - We heard back from John Joyce, Solar Support Program Manager at BWP, about the outcome of the lottery process. According to Mr. Joyce:
105 lottery entries have been submitted and the budget is sufficient to allow each of these applicants to participate, therefore no lottery will be held.
We have a further inquiry in to Mr. Joyce to see if there is still budget left over to allow more applications going forward. We will update this again if we hear back.
There is a fair amount of talk lately (in nerd circles) about a graph being circulated by the utilities and the California Independent System Operator ( CALISO, the entity that manages the electric grid in the state). Known as the “Duck graph,” it is being presented as a dire prediction of impending grid instability due to the increasing role of renewable energy sources. But where some see doom and gloom, others see opportunity. Here’s our take. (H/T John Farrell at REWorld.)
Here’s the graph (credit, CALISO):
As recently as 2012, this wasn’t a duck at all as net load had two peaks, one in the morning and one late in the evening.
But look at the center of the graph: as more and more renewable sources come online, the demand during the middle of the day falls dramatically, so much so that the utilities are complaining that there will be a risk of “over generation” - producing more energy than is needed and cutting into the baseline production (from power plants like coal and nuclear that need to operate continuously to be efficient.)
Also predicted is a rather steep increase in evening demand between now and 2020.
The net result is a curve shaped much like a duck, apparently a fowl predictor of grid chaos.
Frankly, we look at that graph and see progress and opportunity. Progress in that renewables, which not so long ago were sneered at as being a, “tiny amount of energy that will never amount to anything serious,” are now completely rewriting the load curve in the nation’s most populous state. Talk about coming a long way, baby!
The opportunity, of course, is right there as well. While adding large amounts of smart storage to the grid is an obvious fix for this “problem", as we noted just the other day (see Can Renewables Power the US?), we can handle this evolving energy future in a relatively simple manner—it just requires changing how we approach the problem. Here’s the video:
We can, and will, teach this Duck to fly.