We have been waiting a long time for this moment, when we could finally say that we can offer a solar plus smart storage solution for our residential clients. Well the wait is over, and if you act fast, there is even a sweet rebate available! It is a complicated picture, so stick with us as we break this down.
Regular readers of this blog know that we are big fans of Enphase Energy and have been installing their microinverters for years. Given our history with the company, we were excited to be approached by Enphase to participate in their AC Battery “beta” install program, one of just a handful of selected installers in the U.S. We selected the site of one of our largest residential projects for the beta, knowing that would give us great data to study over time (and you know how we love data!). We really like the way the install turned out, nice and neat!
Let’s be clear about what this system is, and is not. It is not a battery backup system. It will not keep the lights on if the grid goes down. It is an energy arbitrage system - it stores energy from your PV array for use later in the day when your rates are highest. That means that this system isn’t for everyone; it is for folks who have a PV system (or want to install one!) and are subject to time-of-use (TOU) rates, which mostly means just some folks who are SCE customers. (Important note to SCE customers - if you install solar after July 1st, you will be forced onto time-of-use rates.)
Each battery stores 1.2 kWh of energy and can discharge that energy at 280 Watts, giving a discharge time of 4.3 hours. The beta install shown above is a total of 4.8 kWh and a discharge of 1.12 kW.
So how does this work? Consider SCE’s TOU rates - the cheapest energy (13.1¢/kWh) is from 10 p.m. to 8 a.m. The next cheapest energy (16.6¢/kWh) is from 8 a.m. to 2 p.m., and 8 p.m. to 10 p.m. The really expensive energy (a whopping 33.5¢/kWh!) is from 2 p.m. to 8 p.m. - precisely when most people are coming home from work or school, turning on the A/C, and lights, and the TV and on and on. Ouch!
But note that the peak time does not coincide well with the output from the PV array, meaning energy exported onto the grid during the day is worth half of what that same energy would be worth later in the day.
That problem is exactly what the Enphase AC Battery is designed to solve. Each morning when the PV array “wakes up” it starts to power the local loads of the house. As the system produces more power, excess power is routed to charging the batteries (instead of exporting onto the grid). Once the batteries are fully charged, any excess power is then exported and the homeowner gets a net metering credit for that energy. But now when we get to 2 p.m. and the energy rate kicks into high gear, any energy needs that cannot be met by the PV array is supplied by the energy stored in the batteries, thereby limiting the amount of really expensive energy that has to be purchased from the grid.
Here’s a recent day’s performance of the beta system (I told you the data was cool!):
The bright blue is energy from the array, the orange represents energy loads - pale orange is entirely offset, bright orange is drawn from the grid. The green at the bottom shows the percentage of battery charge - sloping up between 8 a.m. and noon, constant until needed starting around 6 p.m., and then discharging to offset the household loads.
At the top we see snapshot data from the 8-8:15 p.m. interval. No power is available from the array (duh, it’s night!), but the house is consuming 533 Watt-hours of energy, with slightly more than half coming from the batteries. (Hint - the system is entirely modular, so we could easily double the size of the system to completely cover those loads.)
Bottom line: if you are on a TOU rate, storage can really improve the value of your existing PV system. (And because the Enphase storage system is “AC-coupled” it can be installed with any existing PV system!)
Which brings us to the Self Generation Incentive Program (SGIP) rebates. Starting in April, rebate applications can be submitted for energy storage systems. Much as the CSI rebate program had multiple steps over time, SGIP has five incentive level steps and how fast it steps down is tied to how large is the demand for rebates. (We anticipate that the highest rebate level will be paid out almost immediately after the program formally opens on May 1.) At this highest rebate level we would expect the rebate for each Enphase AC Battery to be roughly $430.
The competition for these rebates will be pretty fierce. Fortunately, there is a dedicated carve-out of money for small residential storage systems, so all the money won’t be gobbled up by a few, super-large projects. (Interestingly, priority will be given to folks living in what is known as the Western LA Basin Local Reliability Area - you can check to see if your zip code, which includes pretty much all of the Run on Sun service territory - is included by clicking here.)
The rebate is not limited to SCE customers; folks who are SoCal Gas customers (that means you, PWP and LADWP folks!) can also participate.
Properly sizing a battery system to go with your solar array is a complicated process that requires technical savvy. Dealing with the SGIP bureaucracy requires a sophisticated team that can deal with the program’s many twists and turns. If adding storage - specifically the Enphase AC Battery - to your present or planned PV system sounds like a good idea, give us call, we’re ready to bring our expertise to bear to help you get this right!
We have written at some length about how Net Energy Metering (NEM) works, and about the changes to NEM that are coming, aka Net Energy Metering 2.0. While both PG&E and SDG&E have already switched to the 2.0 version, SCE customers are still able to go solar under the existing, more favorable, rules, but not for long! (NB: PWP & LADWP customers are unaffected by this change, the following is only relevant to SCE customers.)
Here is our update as we dive headlong into the brave new world of NEM 2.0.
Under the rules adopted by the California Public Utilities Commission (CPUC), SCE must continue to allow new customers to operate under the current NEM 1.0 rules, until either of the following events occur:
- SCE reaches its NEM 1.0 cap of 5% of net aggregate demand, or
- We reach the deadline date of July 1, 2017.
As of this writing, SCE is still a full percentage point below its cap, with 480 MW worth of solar to install before the cap is reached. Quite simply, that will not happen between now and the end of June, so the deadline to get in on the current rules is 11:59 p.m. on June 30, 2017.
But here is the rub—to qualify, not only must the project have been completed, but a final, signed-off inspection card must also be submitted to SCE prior to the deadline. This is going to make June a difficult month as installers struggle to get projects completed and approved in time. Since approvals are at the whim of individual inspectors, many of whom are idiosyncratic (to be kind) in their understanding of what the code requires, it is difficult to guarantee that a project will be approved on first inspection.
Prudent consumers will want to make sure that first inspection occurs on or before June 15th.
Although NEM 2.0 is not the crushing blow to solar that some feared it might become, it still has a number of aspects that make it less appealing to the solar system owner. Here are the major differences:
The coming of NEM 2.0 has some obvious consequences—there will be a crush this spring to get projects approved before the new rules take effect (so don’t wait!), and the overall savings from going solar will be reduced, although not dramatically so.
But there are some unintended consequences as well. For one, these new rules will be a boon for intelligent storage systems, both to help reduce NBCs and to shift that otherwise exported energy to peak TOU periods. Storage systems with the “smarts” to do all that will suddenly make economic sense. (More on that in the near future, but for now just three little words: Enphase AC Battery!)
Another unintended consequence is the significantly increased difficulty in properly modeling the savings to be derived from adding solar. While some installation companies use sophisticated software like EnergyToolbase (as Run on Sun does), or build out sufficiently detailed spreadsheet models (as Run on Sun also does), for many, that level of complexity is simply overwhelming. So what will they do? More than likely, just create a number that is little more than a WAG (and no, not a SWAG).
The result is that potential solar clients need to push on companies providing them with solar quotes to justify their savings numbers. If they used something like EnergyToolbase they should be happy to point that out (although there is still the risk that they used it incorrectly…). If they used their own proprietary model, they should be able to explain how it works. But be wary of numbers, especially outliers that claim greater savings without sufficient documentation.
Every now and then we get a call from someone who has solar installed at their home but they’re not happy. Typically this occurs when they get their “true-up” bill at the end of the year, and are shocked to see that the amount that they owe is way more than they expected! In many cases this leads them to believe that the system simply isn’t working, and now they want a third-party (like Run on Sun) to come out and evaluate the performance of their system.
Here are the three leading reasons why that bill is so high…
Although this tends to be the number one suspected reason for why the bill is so high, generally it isn’t the actual cause. Most systems are installed properly and are in operation. But every now and then we come across a system that simply isn’t working at all. That was the case with one man who was convinced that his system had never worked and that the company that installed it was simply out to cheat him. We didn’t see signs of that—the system had been installed and the overall workmanship was acceptable on the surface, so it wasn’t like someone just slapped the panels on the roof and ran away. But here’s the thing—this was an Enphase system so there should have been monitoring in place to answer the question of how well the system was working. Except that the installer had never bothered to complete the setup of the monitoring system!
When we came out we were able to access the Envoy directly, and while it could see the microinverters, it was clear that they had never produced any power—in over a year!
So how can a solar system owner prevent this? Simple—when your system goes live, make sure that the installer walks you through the operation of the system so that you can see with your own two eyes that the system is actually producing power. (This could be a readout on the inverter/monitoring system, or a spinning performance meter, or an indication that utility meter is going backwards.) Better yet, ask them up-front how will you be able to know that your system is working, and then when it goes live, make them prove it to you!
This second case is actually far more likely: the system is performing, but it is not meeting your savings expectations. In our experience there are two main reasons for this: hype and over use.
One reason for this disconnect is that a dishonest sales person over-hyped the savings to be had from the system installed. For example, we have seen “savings” projections based just on the size of the system, without regard for how shaded the system was, or its orientation - to say nothing of the actual rate structure that is being used by the utility.
Shaded systems produce less energy. Systems aligned away from South will produce less energy. A utility customer on a time-of-use rate structure may well save less than one on a tiered rate structure (depending on how those rates are designed).
The point is to beware of overly simplistic savings projections. A proper analysis will factor in all of these issues to provide the best possible estimate of savings.
Even the best savings projection is predicated on future energy usage being consistent with the historical data that the solar company was given (unless increases are specifically discussed and included). While many people with solar power systems become vigilant about reducing their overall energy consumption, others go in exactly the opposite direction. Indeed, it is not uncommon to hear people say that part of why they want to “go solar” is so they can afford to run their air conditioning “more” during the summer.
Solar power systems are finite resources—they can only produce so much energy consistent with the size of the system, and most utilities limit system size to the historical energy usage average at the site. If you install solar, but then triple how much energy you use during the year, you shouldn’t be surprised if you are not saving any money!
Which leads us to the most likely culprit—there has been a failure to communicate between installer and consumer. At the root of this is Net Metering and the complexities of most energy bills. (A big part of the blame here goes to the utilities who seem determined to make their bills as complicated as possible!) Let’s provide an overview of this issue and then illustrate with a specific example.
Solar system owners - at least here in SoCal - operate under utility rules known as Net Energy Metering, or just Net Metering for short. Here is how this works: on the day when your solar power system is given “Permission to Operate” (or PTO) by the utility, your billing will shift to Net Metering (often the utility will change your meter to allow for that switch). Every day, as your system operates, you will either be exporting (selling) energy back onto the grid, or importing (purchasing) energy from the grid.
Think of it this way: you get up at 6 a.m. and it’s dark outside. You turn on some lights, the radio, coffee maker, etc. Your solar system isn’t producing anything (it’s dark outside, remember?) so you are purchasing energy from the grid. You go off to work as the sun comes up, and your system turns on. All day long, your solar system is producing energy, but there is no one there to use it—the A/C is off, the TV is off, the house is dark—so all of that excess energy is sold back to the utility. Your fancy new meter keeps track of all of that energy coming and going.
Every billing cycle the utility will look at those readings—how much energy did you sell compared to how much did you purchase—and “net” out the difference. If you were a net seller of energy, you will have a credit. If you were a net purchaser of energy you will have a balance due. But here is where some people get confused—your bill won’t ask you to pay for the energy you used that month. Typically you will only be charged for whatever “customer charge” there may be along with taxes and other fees. The bill for your energy usage (or credit, if you are so lucky) is carried forward to the next billing cycle, and the next, and the next, until you get to the anniversary of your PTO date. Now your usage will be “trued up” and you will either get a bill to pay (assuming that for the year you were a net energy purchaser) or a check (assuming you were a net energy seller, but don’t get too excited because that payment is really tiny).
Here’s the thing, depending on how much of a net energy purchaser you were, that bill could be pretty significant, in some cases well over a thousand dollars or more!
Of course, you would have been receiving bills every cycle that showed what you were accumulating (either a balance due or a credit) but since there is no related payment required, it is easy for some to overlook those bills, and if this process has never been explained—or even if it was but the consumer simply didn’t “get it” at the time—this can lead to a nasty surprise.
Bottom line - solar companies need to do a better job here in explaining how this works. (Hence this post!)
Consider a hypothetical solar system owner, let’s call him Bob. Now Bob is a smart guy, but this is the first solar power system he has ever owned. His installer explained everything to him when the system went live, but Bob was distracted by the excitement of a potentially zero bill. His system has Enphase microinverters so he has been receiving energy production emails from Enphase every month, and that looked cool, but he never attempted to reconcile his Enphase report with his utility bill (Bob’s not so big on balancing his checkbook, either). But to be fair to Bob, the Enphase report that he receives is for each calendar month, but his billing is every two months, and they aren’t calendar months; rather, they run from meter read date to meter read date (e.g., 7/28/2016 to 9/26/2016).
The good news is that Enphase has a reporting feature that allows you to enter any two dates since the system went live and receive day-by-day energy production, with the total at the end. Let’s see what we can learn when we put Bob’s billing data next to his production data from the Enphase reporting feature:
Ten months of Bob’s usage versus production
The first two columns show the start and end dates for each meter reading/billing cycle. The bought column is the amount of energy that Bob purchased from his utility. (Whoa, what happened during the latest billing cycle???) The sold column is the amount of energy that Bob sold back to his utility during that period, as reported by the utility. The next column is the amount of energy that Bob’s system produced during the dates in the billing cycle, according to the Enphase website. But wait, how can this be? In that first period, the utility says that Bob only sold 774 kWh of energy, but Enphase says his system produced nearly twice as much, 1,338 kWh!
How do we make sense of this disparity? The answer is simple: local consumption. It is important to remember that the utility has no idea how much energy Bob’s system is producing, all they see is how much energy Bob is selling back to them. So both Enphase and the utility are correct, they are just measuring different things. Enphase measures total energy produced. The utility measures energy sold to them—the difference is energy used to power Bob’s house that didn’t come from the utility; rather, it came from the solar system! In that first billing cycle, Bob’s system produced 1,338 kWh and of that, 774 kWh were sold back to the utility, meaning 564 kWh of that production were used to power his house. And that means that Bob’s total consumption for the month is the amount that he bought from his utility, 1,402 kWh, plus the solar production that was consumed locally, 564 kWh, for a total consumption of 1,966 kWh. Applying that reasoning to the rest of the data shows that Bob’s overall consumption has increased in every billing cycle except one, with a whopper over the holidays! (Maybe too many holiday lights?)
The production data shows that Bob’s system has been performing appropriately - increasing over the summer months, decreasing over the winter months. Here’s a graph that puts that all into perspective:
The blue represents the actual energy produced each day. The gray line is the predicted system production (in this case modeled using the CSI calculator). Over the lifetime of the system, the maximum amount of energy produced in a day was 29.7 kWh (42% above what was predicted for that day) and on the day when this graph was created, the system produced 15.7 kWh.
Generally, the performance peaks well above what is expected (particularly in the late June through early November period). But once we get into mid-November things deteriorate—not because of a fault in the system, but because of abnormally wet weather here in SoCal (as we head into a 1″/hour rain storm today!). For much of the past two months, actual production has fallen well below what was predicted, with just 77% of predicted being realized so far this month. And yet, despite all of that, overall the system has still produced 99% of its estimated lifetime production.
This points out a couple of key things to me: First, you just gotta love the data that is available through the Enphase monitoring system. It allows system owners and installers alike to have near-real time access to system performance, as well as to review long-term data to discern trends and uncover patterns. Priceless!
Second, we as solar professionals need to do a much better job of informing our clients so that they know what to expect. (I’m leaving out the hype-sters who couldn’t care less what the consumer knows as long as they make a sale.)
We live with this stuff every day but for most of our clients, this is all brand new, and confusing. We need to take the time to explain how this works so that they can understand the actual value of their investment.
It is with great excitement that we introduce to you the latest member of the Run on Sun family, Sara Pavey, our new Projects Coordinator!
We’ve had our eye on Sara for quite some time as she has been in the solar industry for more than five years with a variety of other solar companies. Indeed, during her tenure at one of those companies, her bosses derided her as a “teller, not a seller,” because she has the audacity to take the time to fully explain things to potential solar clients! Needless to say, we are thrilled to have another “teller” on our team as we are fully committed to answering all of our clients questions before they sign on the dotted line!
Sara is a proud graduate of Cal Poly San Luis Obispo (Go Mustangs!), earning her degree in Mechanical Engineering. Sara demonstrated her technical insights at her very first Run on Sun jobsite, suggesting a clever re-routing of cables that was both more efficient and more aesthetically pleasing. We look forward to putting all of her tech skills to use—as well as her “telling” approach to sales!
Prior to joining Run on Sun, Sara honed her installation skills by volunteering with Grid Alternatives, a nationwide non-profit that “brings the benefits of solar technology to communities that would not otherwise have access, providing needed savings for families, preparing workers for jobs in the fast-growing solar industry, and helping clean our environment." (Learn more about Grid Alternatives here.)
A native of Southern California (yes, there really are some natives here!), Sara lives in Pasadena with her husband, Kyle, and two (very) young children, Isla and Liam. When Sara is not crunching numbers or climbing on the roof, you will find her at the LA Zoo, Kidspace Children’s Museum, or a local trail. If both children are miraculously napping at the same time, she likes to paint colorful abstract paintings on any available surface, including the shower door. (Another skill for us to tap!)
Please join me in welcoming Sara to the Run on Sun family!
All solar companies market themselves, Run on Sun included. But lately we’ve come across some particularly puzzling ploys being touted by some companies as if they were a benefit to the consumer, when all they really are is a way for the solar company to cut their costs at the consumer’s expense! Let’s peel back the onion layers on these three ploys to see what is really going on…
One of the major solar companies built its entire business model around this ploy, and a bunch of aggregator sites have popped up offering much the same thing: a quote on a solar power system without ever visiting the consumer’s home. Certainly for some folks - the very busy or the very shy - this might sound appealing. You can get a quote for your system without ever having to deal with those pushy salespeople.
The advantage to the solar company should be pretty obvious - they avoid the time and expense of sending a vehicle and a salesperson to your home, thereby saving the salesperson for only those potential clients where a face-to-face meeting is required.
So how does this ploy cost consumers? The simple truth is that no one can properly install a solar system without actually coming to your home and seeing the actual conditions on the ground. While satellite images are great for making preliminary assessments, there is just too much that could affect the ultimate cost of the system that cannot be determined remotely. For example, the other day we noticed a sag in a roof while taking our measurements. Upon closer inspection it was discovered that one of the roof rafters was split and caused the roof to sag. That damaged rafter needs to be repaired or replaced before solar can be safely installed. The homeowner was completely unaware of the situation until we pointed it out to him.
When a solar company gives you a quote without having performed a comprehensive site evaluation, their quote will be hedged as “preliminary, subject to revision following engineering review." Which means that after you sign the contract, they will “discover” the issues that they should have told you about initially. But now you will have signed a contract and to move the project forward you will have to accept a change order increasing your cost. Great deal for the solar company, not so much for the consumer.
This one to me is a real head scratcher - the solar company that brags that they will install solar on your home in one day! Seriously?
Solar power systems, when installed correctly, should provide you with trouble-free operation for twenty years. Given that time frame, do you as a consumer really care whether the install takes one day or four? Frankly, in ten years of doing this, we have never had a client ask if we could complete the installation in one day.
Of course, that doesn’t mean that clients aren’t concerned about how the installation will be done, they are. But they are interested in knowing that it will be done right, and right the first time.
The solar company promoting this ploy wants to suggest that they have this so dialed in that it will take them no time at all. But what is really happening is that they are telling their crews to throw it up on the roof and move on to the next job. That translates into lower labor costs for the solar company (i.e., more money in their pocket), but no real benefit for the consumer.
The simple truth is that craftsmanship takes time. You, the solar consumer, are going to be living with this for the next twenty years - maybe that extra day or two will actually inure to your favor!
This may be the scammiest ploy of all. The solar company prominently displays that they will install solar on your home for free! And who doesn’t love free, right?
Of course what this really means is that the solar company wants you to sign on to a 20+ year agreement (either a lease or a Power Purchase Agreement) to pay them every month for the privilege of having that “free” solar on your roof. The end result is that you end up paying as much as twice as much to that solar company as you would have if you had purchased the system outright - and you still won’t own it even after twenty years!
And yes, I know that not everyone has the cash on hand to purchase a system outright, but there are better options than leasing. For consumers with good credit, a home equity line of credit will be way cheaper than going with a solar lease. If your credit is not so great, you could look into PACE financing which is not tied to personal credit. PACE is more expensive that a HELOC, but still a better deal than a solar lease.
At the end of the day, all of these ploys work in the solar company’s financial interests, and not the consumer’s. The folks that dream up these schemes are shrewd - consumers need to be just as shrewd if they are to avoid getting fleeced!
Happy New Year!
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