Categories: Solar Economics, AB 811/PACE/LACEP Funding, AB 920 Payments, Feed-in Tariff, Solar Rebates, BWP Rebates, GWP Rebates, LADWP Rebates, PWP Rebates, SCE/CSI Rebates, Solar Tax Incentives

04/28/16

  05:17:00 pm, by Jim Jenal - Founder & CEO   , 508 words  
Categories: All About Solar Power, Solar Economics, Ranting

SunEdison's Failure - Non-Event for Our Solar Clients

Second only to the flame-out of oft-maligned Solyndra, the bankruptcy filing this month of once high-flying SunEdison has gotten a great deal of press, particularly by those who follow the financial side of the solar industry closely.  But what does it really mean for residential, non-profit, and small commercial solar clients?  In a word - nothing, and here’s why.

Background

SunEdison, is a developer of utility-scale solar projects, that is, projects that sell energy directly to a utility rather than offsetting the energy loads of a local customer.

SunEdison project

SunEdison Alamosa PV Plant

In recent years SunEdison expanded aggressively, creating two captive subsidiaries known as yieldcos to purchase the parent’s projects at a premium, sell the energy and pay investors dividends from those projects - thereby enticing more investors, which provided more capital to purchase more projects, thus paying more dividends and on, and on. 

Until it didn’t.

Possibly the straw that broke the investors’ back, however, was the deal that SunEdison announced last July to purchase Vivint Solar at a 52% premium.  To a lot of folks this seemed like an odd move - Vivint is a major player in the residential solar space where it competes against SolarCity (and us!) - not a real fit with a developer of mostly utility scale projects.  That deal spooked investors, liquidity became an issue, and the Vivint deal dissolved into litigation in March.

Bankrupt

With the demise of the Vivint deal, rumors of bankruptcy grew, culminating in its filing for Chapter 11 reorganization on April 21.  The announcement - ironically one week after coal giant Peabody Energy did the same thing - generated some pretty scathing coverage:

While certainly not the level of vitriol directed at the failure of Solyndra, those are still tough headlines (and interesting articles, should you be inclined to dive deeper).

Meanwhile, back on your roof…

So while there is a great deal of buzz about the problems facing SunEdison, they really have nothing to do with the markets that our clients occupy.  We, along with the other local, independent solar installers out there, are still doing just fine, thank you!  We have never purchased products from SunEdison, so none of our product warranties are affected.

In the end, this story does highlight one consideration for potential clients to consider as you mull over the trade-offs between a smaller, local company and a large, national chain.  If even the biggest firm can fail, as SunEdison has shown, so can the other giants out there.  So if there is no guarantee that either the large or the small company will still be around in ten years, where would you rather place your bet: with the small company that takes the time to get the job done right, or with the giant that is bragging to its investors how it takes a day or less to install a system? 

At the end of the day, size may matter, just not in the way you would originally think!

01/13/16

  03:25:00 pm, by Jim Jenal - Founder & CEO   , 283 words  
Categories: All About Solar Power, Solar Economics, Residential Solar

Tripling Down - LG to Triple NeON Production by 2020

LG Solar Module Production facilityRun on Sun’s solar module maker of choice, LG Electronics, has announced that it will invest the equivalent of $435 million to triple its production of N-type solar modules, sold under the brand name NeON.

According to press reports (h/t PV-Tech), LG has entered into a memorandum of understanding with the South Korean city of Gumi to expand LG’s existing module production facility there (pictured at right).

LG’s roadmap would see it increase production from today’s ~1Gw to 1.8 GW by 2018 and a full 3 GW by 2020.  If it can reach those targets, LG would become the largest producer of N-type solar modules in the world, overtaking present leader, SunPower.

Lee Sang-bong, President of LG’s energy business center was quoted as saying the expansion would place LG’s solar business in a “much stronger position” and allow it to be a “dynamic engine for growth” for LG.

“LG has been actively involved in the solar energy business for two decades and we believe that mainstream consumers are more than ready to give solar more serious consideration.”

This is great news for LG’s end customers - like the clients of Run on Sun.  N-type panels, like the LG315 panels currently being installed by Run on Sun, have an enhanced performance warranty, produce more of their rated power when hot, and suffer significantly less Light-Induced Degradation over conventional solar modules.  The significant increase in production offers the hope of lower prices for these premium modules over time, making top-of-the-line solar affordable for “mainstream consumers.”

But you don’t have to wait to get your hands on these best-in-class modules - we are installing them today!  Just give us a call and let’s show you how with LG solar modules, Life is Good!

01/12/16

Who is Paying You to Go Solar in 2016?

Show me the money!The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area.  (You can read more detail about all of these incentives on our Solar Financing page.)

Federal Tax Credit

Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit.  Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019

The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you.  (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.)  For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility.  Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.

Utility Rebates

Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions.  We have rank ordered the local utilities below, based on the reliability of their rebate program.

Pasadena Water & Power

The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power.  Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.

As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit).  Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system.  Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.

Los Angeles Department of Water and Power

LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.

That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits.  Just don’t hold your breath.

Burbank Water & Power and Glendale Water & Power

These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.

Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year.  Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.

Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15.  In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.

Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.

We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.

Azusa Light & Water

The “Solar Partnership Program” in Azusa is fully subscribed.  There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.

Anaheim

The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.

Southern California Edison

SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated.  Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!

12/31/15

  10:01:00 am, by Jim Jenal - Founder & CEO   , 826 words  
Categories: All About Solar Power, Solar Tax Incentives, Climate Change, Ranting, Energy Storage, Net Metering

Top 5 Reasons Solar Soared in 2015!

There can be no doubt, 2015 was an amazing year for solar.  As we reach the end of the year, here’s our look back on the top five reasons solar soared in 2015!

5. Run on Sun had its Best Year Ever!

Run on Sun Top 500 Solar Contractors

While not the most important reason for solar overall, we would be remiss if we didn’t acknowledge that thanks to our wonderful clients, 2015 was our best year by far!  From our largest project ever for our favorite water company, to adding another school to our portfolio, to the many residential projects that we built all across Southern California, 2015 was a great year.

We took great pride in being recognized, for the third year in a row, as being one of the top Solar Contractors in the country by the wonderful folks at Solar Power World, and even more pride in the scores of referrals that we received from our ecstatic clients.

We can’t wait to meet and exceed our success this past year in the New Year ahead!

4. Politicians that Got It!

Political leadership on dealing with Climate Change was finally in evidence this year, and the resultant policies are, inevitably, pro-solar.  Exhibit A was California Governor Jerry Brown pledging to have the state generate 50% of its electricity from renewable sources by 2030, a mere fifteen years away!  Said the Governor:

I envision a wide range of initiatives: more distributed power, expanded rooftop solar, micro-grids, an energy imbalance market, battery storage, the full integration of information technology and electrical distribution and millions of electric and low-carbon vehicles.

We are on board with that!

But  political leadership extended far beyond the borders of our great state in 2015!  More than 190 countries came together in Paris to agree to the most far-reaching accord ever to address Climate Change, and lots more solar was high on their list of ways to achieve a more sustainable planet.

To be sure, none of these actions were without their political opponents, but it is impossible to deny that 2015 marked a major turning point in the public’s perception of the need to act, and those views were increasingly adopted by the world’s politicians.

3. Smart Energy Storage (Finally) Comes of Age (Almost)!

Ok, we have to give the man his due — Elon Musk’s outlandish PowerWall announcement changed the conversation around smart energy storage (and our blog post debunking his most outrageous claims became our most viewed post of the year!).  Indeed, storage went from being a topic hardly ever mentioned by a potential client, to something that nearly everyone did after Elon did his thing.

Unfortunately, the hype still leads the market, and mature products are still not really available.  But that is changing rapidly, and from our perspective that can’t happen soon enough.

2. Net Metering 2.0 Saves Solar in California — We Hope!

There had been great angst in the solar community about the future of net metering — the means by which solar owners get compensated for excess energy that they put out onto the grid — in California (and elsewhere).  Decisions about net metering in other states that bent over backwards to appease utility demands only ratcheted up the anxiety in California as the state’s Public Utilities Commission deliberated over competing proposals for Net Metering 2.0 - including utility schemes that could have gutted the market for solar.

Fortunately our fears were not realized and the preliminary decision — due to be made final in January — was quite solar friendly.  Once we have a final decision we will report on it in depth, but for now this looks like one of the biggest pro-solar developments of 2015.

1. Federal Solar Investment Tax Credit is Extended!

Losing money if the ITC goes away!The number one, most amazing, and most amazingly unexpected development to boost solar in 2015 is unquestionably the major extension of the 30% federal solar investment tax credit (ITC).

Given that the ITC was previously scheduled to expire at the end of 2016, solar installers, potential clients, utilities, and building departments alike were all bracing for what could have been a hellish second half of next year as all involved scrambled to get systems commissioned before the deadline.

Instead, the full 30% will continue through 2019, 26% in 2020, 22% in 2021, and 10% thereafter.  Moreover, the “placed in service” language — which required a project to be commissioned before the credit could be claimed, thereby leaving installers and clients at the not-so-tender mercies of the local utility — was replaced by the far more manageable, “commenced construction” requirement.

The net benefit of this will be a more orderly market, driven by rational purchasing decisions rather than a panicked stampede to meet an arbitrary deadline at the end of next year.  And beyond that, keeping the ITC in place for many years to come will help to grow solar in ways that would not have been possible otherwise.  The industry, the economy, and the environment were all winners here.

So that’s our wrap on 2015 — truly a great year for solar!  But we are betting that 2016 — with your help, of course — will be even better!  Watch this space!

Happy New Year!

12/18/15

  04:42:00 pm, by Laurel Hamilton, Projects Coordinator, Run on Sun   , 578 words  
Categories: All About Solar Power, Solar Tax Incentives, Ranting, Solar Policy

Early Christmas from Congress! Solar Tax Credit Extended!!!

xmasToday is a great day for solar! The uncertainty around the ITC (federal solar tax credit) is finally over and we can all rest assured that the solar industry will not fall off a cliff come December 31, 2016! 

You may have heard the big news about the bipartisan passing of the year-end budget deal to effectively not shut down the government for one more year. But you may have missed the news that they also passed a 1.1 trillion dollar omnibus spending bill including the extension of many tax credits. Guess which exciting tax credit was included?? That’s right, the solar ITC and other renewable energy tax credits were included in HR 2029. The spending bill is the result of a deal between party leaders. The unfortunate cost of the five-year extension (and other Democratic priorities) is the lifting of the 40-year-old oil export ban and a series of permanent tax cuts. 

This morning HR 2029 passed the US House of Representatives (316-113) and the US Senate (65-33). This means that the Omnibus funding bill goes to the President for his final signature, which he has already agreed to do. This is a great day for the solar industry, living-wage American jobs, the growth of clean power and all the policy advocates out there fighting to extend the ITC. 

Here are the details regarding the new extension of the solar tax credit:

  • 3 year extension of the ITC at 30% extending until December 31, 2019
  • Step down to 26% in year ending December 31, 2020
  • Step down to 22% for year ending December 31, 2021 
  • Each year that a step down occurs has a start construction clause 
  • Continued 10% ITC for each year after…indefinitely? 
One key point is the change in language from requiring projects to be complete during a calendar year to the new ITC where projects must only be started in a calendar year to receive the credit. This helps relieve pressure on solar contractors racing to meet deadlines, particularly for large commercial scale solar projects. Another key point is that from what we can tell, the ITC will remain indefinitely at the 10% level after 2021. Perhaps this just means: “10% ITC until different legislation trumps the current bill." 
 
The Solar Energy Industries Association (SEIA) has been working overtime in the battle for the ITC extension. SEIA President and CEO Rhone Resch had the following to say about this historic vote: 

“We commend members of Congress in both parties for taking this bold step and we look forward to delivering on the promise that this policy now offers all Americans. Thanks to the ITC, solar energy will add 220,000 new jobs by 2020, and with this extension, the solar industry can achieve its pledge of employing 50,000 veterans. Clean solar energy will cut emissions by 100 million metric tons and replace dozens of dirty power plants.

Importantly, in the follow up to the Paris accord, this establishes the United States as a model for the reduction of greenhouse gases. A five-year extension of the ITC will lead to more than $133 billion in new, private sector investment in the U.S. economy by 2020. And much of this growth will come from small businesses, which make up more than 85% of America’s 8,000 solar companies.

Solar power in this nation will more than triple by 2020, hitting 100 GW. That’s enough to power 20 million homes and represents 3.5% of U.S. electricity generation.”

Today we celebrate the progress our country  has made. We know the tax extension will only serve to help more and more property owners take advantage of all the benefits of solar energy. Happy Friday and Happy Holidays everyone!!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Laurel Hamilton is Run on Sun's Projects Coordinator, and together they author this blog.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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