Everyone in the solar industry is focused on soft costs—that is all the extra expenses that are rolled into the cost of installing a solar power system. Since prices for solar modules have dropped to below a dollar/Watt, the percentage of an overall system price consumed by soft costs continues to increase. But soft costs are really hard to reduce and we just had a painful example to help drive that point home.
One of the most pernicious of the soft costs are those associated with getting approvals from the Authorities Having Jurisdiction (AHJs) over the project. That includes both the utility that must approve any rebate application and interconnection agreement, as well as the local building and safety department which must issue the permit and inspect the project. The requirements for approving a solar power system vary considerably from jurisdiction to jurisdiction and that lack of standardization—combined with just plain arbitrariness that runs rampant in some places—means long, pointless delays in moving projects forward.
We are working on a medium-sized residential project in Los Angeles. If we were doing this in Pasadena, it would be installed by now, but as everyone knows, LA isn’t Pasadena. We submitted the requested materials for reserving the rebate on this project on December 3 of last year and then sat back while we waited to hear from them. Weeks went by without a peep—while we reassured our client that we would update them as soon as we heard something.
Then, finally, we did. On February 19th, seventy-eight days after we submitted the application, we got an email telling us that the application was “incomplete” and that:
If you fail to submit the requested documentation by the above date your incentive application will be subject to cancellation without further notice.
(It really was in red type.) How long did they give us to respond? Two weeks. In other words, we get less than one fifth of the time that LADWP took to, in its sole discretion, identify “deficiencies", to cure those deficiencies.
If that wasn’t bad enough, LADWP adds insult to injury by sending a copy of the “deficiency” email to the client! Pity the poor client—they have picked a contractor, signed a bunch of paperwork, and made a down payment, all months ago with nothing to show for it, and then they get an email that suggests for all the world that their contractor has botched things and their project is about to go south! How helpful.
So now the contractor has to spend time reassuring the client that despite the dire tone of the email, everything will be ok. Then you spend more time addressing the “deficiencies” that have caused all the ruckus in the first place.
I won’t bore you with the entire litany of nonsense that we were asked to cure, but my favorite one was this: when you submit information about the system online, you are supposed to show the cost of modules, the cost of the inverter(s) and the balance of system (BoS) costs. You are also required to submit a copy of your contract for the sale. This we did. But they complained that the contract price and the system price entered online did not agree. Now here’s the thing, once you submit the rebate application to LADWP you can no longer see those details, so the contractor has no way to know where this “error” came from. So, with no other options, you tell them that the contract is the controlling document as to the system cost so they should use that.
Instead, they send out yet another email, this time with the scary heading: “FINAL NOTICE” (yes, all in caps) with the following declaration:
The Los Angeles Department of Water and Power (LADWP) has received your Solar Incentive Program application, and it is still incomplete.
And yes, they send a copy of this email to your client as well.
Now if they had actually read the contract they would have understood that the discrepancy is due to the rebate amount itself. Online, the total cost reflects the price before rebate. But because we front the rebate for our client, the contract price is net of the rebate amount. (The contract itself spells that all out, of course, but then LADWP would have to actually read the contract.) We thought about explaining this before coming to our senses and realizing that was a lost cause. Instead, we created a letter requesting that they modify the online data to reduce the BoS amount by the rebate, and uploaded that to their system. Voila, just like that, they reserved the rebate.
By my count, it took eight emails to get this resolved.
Just about everything about this interaction is wrong. The delay in the initial contact is wrong. The tone of the email sent out is wrong. The absurd disparity between the timing LADWP allows itself versus that to the contractor is wrong. And the lack of understanding of what they are reviewing is infuriatingly wrong. It builds in delays and costs to deal with those delays. It is what makes soft costs so damn hard.
It needs to change.
Unemployment is a continuing problem in California but for one group of our neighbors it is stubbornly higher still. That group is our recent veterans—folks who volunteered to fight in our wars but when they muster out are finding anything but a grateful and welcoming work environment. Now the folks at The Solar Foundation and Operation Free are trying to highlight a potential bright spot for veteran employment: the solar industry.
First some background. According to a Washington Post article, as of last October the unemployment rate for post 9/11 vets stood at 10 percent whereas the overall U.S. unemployment rate was 7.2%. The Post story cites numerous factors driving those numbers, including the depressingly high number of disabled vets, but one reason that could be addressed by nothing more than concerted action is this: lack of civilian work experience. Think of it, many young vets went directly from school to service with no stops in the civilian work world. They may be long on life experiences, but still very short on job experience.
According to the joint report issued by The Solar Foundation and Operation Free titled, Veterans in Solar, those numbers are even more stark when you focus on vets under the age of 24. For that group, as of last December, a whopping 16% were unemployed. Not much of a “thank you” for your service.
The solar industry, by comparison, has been a source of hope. Out of an estimated workforce of roughly 143,000 people, the solar industry employs 13,192 veterans or 9.2% (this contrasts with vets making up just 7.6% of U.S. workers overall). These jobs are distributed throughout the industry as illustrated by this chart:
Clearly, while veterans are able to work in a wide variety of positions throughout the entire solar industry, installation provides the easiest entre to the field.
The folks at The Solar Foundation and Operation Free are committed to not only documenting the role of veterans in the solar industry, but in facilitating their involvement in ever growing numbers. One such example of their plans to aid veterans is the “creation of a skills transfer tool designed to help employers easily match skills obtained by veterans with those that are sought by leading solar companies.”
Here at Run on Sun, we like to think of ourselves as a “leading solar company,” and we would like to take part in this worthwhile effort. So here is our commitment: On every commercial project that we install going forward, we will hire one or more veterans to work side-by-side with our NABCEP certified team, thereby giving those veterans the opportunity to learn the skills needed to participate in this industry from some of solar’s best.
Google don’t be Evil.
Isn’t that the refrain? That the Internet behemoth would refrain from using its incredible powers (to say nothing of wealth) to do harm, and instead focus its energies on making the world a better place. For the most part, we have felt that Google was on the right track, investing millions in clean energy companies—and in clean energy projects for its many locations around the globe.
But Google’s admitted membership in ALEC - the ultra-conservative American Legislative Exchange Council - undermines all of those efforts.
We have written before about the efforts by ALEC to roll back progress in the states on renewable portfolio standards and net metering, so it is a bit of a shock to discover that Google is a corporate member of ALEC. (Sadly, Bill Moyers has documented a number of other, extreme right-wing causes that Google is apparently supporting.)
Our concern, however, is specifically with Google being involved in an organization which, if it had its way, would severely cripple the solar energy industry in this country. Hard to understand how Google can find common cause with such an outfit.
Of course, that doesn’t mean that some won’t try. Over at Forbes, contributor Tim Worstall offered up this lame explanation:
So, why be a part of something like ALEC? For the same reason that they’re both part of any lobbying organisation at all. Sadly, the way that the modern economy works is that government, at all levels, has a great deal of influence over how business works. This is as true of my native UK as it is of the US. So, it is necessary for a large business to flash the cash around to both sides, to join lobby groups from all sides of the political compass. Simply because they have to be there to influence the politicians: no, not so much to get them to do what the corporation desires but to stop them doing something stupid which will screw over the corporation.
Respectfully, that is just nonsense. By that reasoning, every large company in America would belong to ALEC (newsflash: they don’t). And it isn’t as if Google cannot afford to have their own lobbyists to tailor their message in a way that reflects Google’s professed values.
So come on, Google, don’t be evil—renounce your membership in ALEC now.
While the buzz around REC Solar this week is that their residential and distribution segments have been bought by Sunrun, we were struck by a press release that they circulated a couple of weeks ago and which was picked up in a story by Greentech Media. In it, REC puts forward a shocking statistic which, if true, is something of a scandal for the residential solar industry—but is it true?
It was the GTM piece that originally sparked our curiosity. Titled, “The Secrets of Selling Solar: Drivers of REC Solar’s Strong Growth,” the piece appears to have taken REC’s press release pretty much at face value. Here’s the money quote:
While 40 percent of solar install orders are canceled industry-wide, only 5 percent of REC Solar’s customers cancel. “When we qualify customers, we are honest and educate them about solar,” [REC Solar VP/General Manager Ethan] Miller explained. “That way, we are more likely to meet their expectations.”
That casual indictment—40% of solar install orders are canceled industry-wide—jumped off the page at me. How could it be that so many people were signing up to go solar, only to cancel the order after the fact? And if that was true, why on earth was it happening? What had been done to those poor people to get them to sign on the dotted line in the first place, only to have sufficient regrets that they cancelled their contract?
Unfortunately, the article provided no source for that shocking stat. Checking with folks at GTM for a source pointed us back to the REC press release. Here’s how that same stat is presented there:
Just 5 percent of REC Solar customers cancel before completing their system, compared to a 40 percent cancellation rate across the solar industry. This statistic reflects that REC Solar’s superior customer service enables more projects to come to fruition than any other solar installer.
Once again, the 40% figure is tossed out without citation. The only contact info on the press release was to someone named Sara Mier so we sent her an email asking for the source of the number. She replied promptly, if not helpfully, saying:
A good place to look for statistics on cancellation rates is California Solar Statistics.
Hope that helps!
Now I have as much respect for the insights possible from the CSI data as anyone, but this struck me as just strange. First of all, REC’s quote referred to the cancellation rate for the entire solar industry, whereas CSI data doesn’t even cover all of California. (In particular, the CSI data only covers systems interconnected to the state’s three Investor Owned Utilities: PG&E, SCE and SDG&E. Notably missing are municipal utilities like LADWP and PWP.) Moreover, presumably this 40% number is driven, at least in part, by contracts that are cancelled during a state-law mandated “cooling-off period” which in California is three days. As a general proposition, CSI data would have no visibility into such cancellations, even for contracts signed in IOU territories, since those contracts most likely never have rebate applications submitted, thereby making them invisible to CSI.
But given those caveats, what does the CSI data tell us about projects going south?
CSI categorizes cancelled projects as “delisted” and we wrote about delisted projects last August. In that slice of CSI data (limited to the first six months of 2013 and just in SCE’s service territory) we found that only 3.26% of projects were delisted—less than a tenth of the figure cited by REC! We even published a chart that showed the top companies with delisted projects (where they had at least 10 projects delisted), and guess what? REC made that list, albeit at just 2%! Indeed, only one company—out of 149 different companies that had delisted projects—showed a cancellation rate at or above the 40% figure that REC has published.
My email back to Ms. Mier pointing out these limitations invoked no response but silence.
Having failed in that avenue I decided to reach out to Mr. Miller directly and after some sleuthing was able to determine his email address. Unfortunately, our email to him requesting comment on this question was similarly met with silence.
So what is the basis for this damning number? We have no idea. Which makes Mr. Miller’s quote somewhat ironic:
While 40 percent of solar install orders are canceled industry-wide, only 5 percent of REC Solar’s customers cancel. “When we qualify customers, we are honest and educate them about solar,” Miller explained.
One wonders just how honest you are with your potential customers when you toss out baseless statistics to make your own performance look better.
We have written about the occasional PR problems that the solar industry faces, so it was a pleasant surprise to come across a “fair & balanced” story about solar power over at Fox.
Before you get too excited, this was not Fox & Friends or The Kelly File where we found this article. Instead it was on the Fox Business website. The article, titled Buy vs. Lease: Solar Panels on Your Home, by Donna Fuscaldo, did indeed offer its readers a fair view into the world of residential solar. For example, the article discusses the pros and cons of leasing versus owning your solar power system and notes:
Homeowners who chose to own the solar panels not only get the best price but they can also benefit from city and state tax breaks depending on where they live. According to Kimbis, homeowners may be able to get city, county, state, utility district and federal incentives that bring significant cost savings.
“Just like other tax rates or incentives, these programs vary significantly by geography,” says Kimbis, noting that any good installer will be able to walk homeowners through available tax incentives in their state.
That is fair advice, and they go on to explain that:
Whether home owners decide to lease or buy, they shouldn’t go with the first offer they come across.
“All homeowners should get multiple bids for solar panel installation, as they would with any other home improvement project,” says Kimbis.
After years of hit pieces, it was remarkably refreshing to see something from Fox (even if it was Fox Business) that presented the value of solar to homeowners in an honest and unbiased manner.
This article deserves to have its hit counter driven up so take a moment and check it out—who knows, maybe it will inspire more stories like it.
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