SB 43 - the Community Solar bill authored by Democratic State Senator Lois Wolk - passed its first legislative hurdle yesterday but in doing so it highlighted potential trouble down the road.
The bill passed the Committee on a 6-4 vote but the combination of who voted Nay does not bode well. Here’s the chart of how they voted:
First observation - the profile in courage award to Committee Vice Chair Jean Fuller for not voting on the bill at all.
Senator Wright’s district encompasses some decidedly working class neighborhoods in cities such as Compton, Hawthorne, Inglewood, San Pedro, Watts and Wilmington. We reached Senator Wright this morning in his Sacramento office - he answered his own phone! - and he was very direct in his comments. He called the measure a “stupid bill” and said he opposed it because of its cost-shifting to other rate payers and that its mandatory purchase and subscription provisions made the bill something he could not support.
We told him about potential clients that we see - like the Glendale woman we met yesterday who so very much wanted to add solar but simply had no viable space to do so - who could really benefit from such a bill. Interestingly, he cited programs like Glendale’s “Green Energy” rate by which GWP customers could purchase “green energy” by paying a surcharge to GWP. We say interestingly because presumably the renewable resources that GWP is using to satisfy that requirement have the same potential issues as those provided by a Community Solar provider - for example, the dispatchability of a resource is not dependent upon who owns the resource.
Our conversation touched on a number of subjects - the Senator was very generous with his time - and we came away with the sense that the while he is quite thoughtful on these issues, he will most likely not be an ally in the struggle to preserve net metering as we know it.
Senator Padilla’s office, on the other hand, did not answer when we called. We will update this post if we hear back from him.
Two of Pasadena’s most beloved institutions - NPR affiliate KPCC and Run on Sun - have joined forces to offer KPCC Members exclusive benefits on solar power systems. As the only solar power company offering Member Benefits, Run on Sun is demonstrating its commitment to the outstanding programming on KPCC and to enriching the lives of its Members.
Here is the deal as shown on KPCC’s Member Benefits page:
- $500 off a residential solar power system, 5kW or larger;
- $2500 off a commercial solar power system, 30kW or larger.
To qualify for this special offer, just show us your Benefits Card when we come out to do your free solar site evaluation.
Wait, what, you aren’t a Member yet? No worries - just click over to the KPCC website and make a one-time contribution of $60! (Wow, how is that for an immediate return on your investment?) Or better yet, become a sustaining member. It is the ultimate win-win!
Before you can ever get a bid for your commercial solar project, you have to contact a solar installation contractor to come out to your location and perform a site evaluation. Actually, you should contact at least three contractors so that you have a set of bids to compare (more on that process below) - but how do you find them in the first place? Well, you could choose based on who has the most ads on TV or the Internet, or you could rely on Cousin Billy’s recommendation - but somehow that just doesn’t seem sufficiently scientific for a project like this. There has to be a better way - and there is.
If you remember that you need to find someone who will work NICELY with you, success is all but assured. And no, we don’t mean nicely, we mean NICELY - as in:
N - NABCEP Certification
I - Incentive provider (CSI or local utility) connected
C - City building department experienced
E - Electrician on staff
L - Local or national?
Y - Years in business.
Focus on those attributes and you will have found a contractor who will inspire confidence and guarantee a successful project. Let’s expand on why these particular attributes are so important.
The North American Board of Certified Energy Practitioners - NABCEP for short - provides the most rigorous certification process of solar installation professionals in the industry. Not to be confused with their Entry Level Letter that merely demonstrates that the person has taken an introductory course in solar, the NABCEP Certified Solar PV Installer™ credential is the Gold Standard for installers and consumers alike. Earning NABCEP Certification requires the successful candidate to have an educational background in electrical engineering or related technical areas (such as an IBEW union apprenticeship program), at least two solar installations as the lead installer, and the successful passing of a 4-hour written examination on all aspects of solar power system design and installation.
As NABCEP notes:
When you hire a contractor with NABCEP Certified Installers leading the crew, you can be confident that you are getting the job done by solar professionals who have the “know-how” that you need. They are part of a select group of people who have distinguished themselves by being awarded NABCEP Certified Installer credentials.
NABCEP’s website offers a database of all Certified Solar PV Installers - just enter your zip code to find the installers located near you. It is with great pride that we point out that at Run on Sun, all three of our owners have earned the designation, NABCEP Certified Solar PV Installer™ - and we know of no other solar power company in Southern California that can make that claim.
A second source of solar installers is the Incentive provider such as the California Solar Initiatives’ Go Solar California website. Every installer who has done a solar power installation for a CSI utility (i.e., SCE, PG&E or SDG&E) will be included on this list. Unfortunately, there are no other criteria associated with getting listed - and there is limited verification done to guarantee that the listed installer is reliable. If your job is in California, your contractor must be on this list - but this is a double-check only - not an ideal starting point for your search.
Another source for information about solar installers is your local utility’s point person for solar rebates. This person deals with installers on a daily basis, and while s/he won’t give you a specific recommendation, they may be able to warn you off of an installer whom they have learned is less than reliable.
Similarly, the folks in your local building department deal with installers regularly as part of the permitting/inspection process. Once again, they won’t be in a position to provide referrals, but they may be able to give you a warning if there are red flags associated with a contractor that you are considering.
Solar installation companies come in all sizes - from national organizations that have crews installing systems all across the country, to local operations that only work in a limited geographic region. To be sure, there are pluses and minuses on both ends — maybe lower prices for the national chain due to economy of scale in their purchasing versus greater attention to detail from a local company that lives or dies based on how well it satisfies its local customer base. And, of course, money spent on a local company tends to stay in the local economy - another consideration in tough economic times.
The last of the NICELY elements is to look at the number of years the company has been in business. Again, this is not a perfect indicator – some recent ventures really have their act together and some long-standing enterprises have long since ceased to really care about what they are doing – but at a minimum you want some assurance that the folks you are doing business with know how to run a business. Otherwise you run the risk of having a largely useless warranty and no one to call if things go wrong.
We would recommend a minimum of three-to-five years in the business of doing solar, with preferably a longer track record of running a business. Expertise in areas beyond just installing solar is also useful such as engineering, management and law.
The preceding is an excerpt from Jim Jenal’s upcoming book, “Commercial Solar Step-by-Step,” due out in July.
Our first post on the new SCE rate structures revealed that there were big changes coming to Residential customers. In this post we will look a little closer at how those changes will affect your bill.
As we explained before, SCE’s new Domestic rate structure changes baseline allocations and completely eliminates the dreaded Tier 5. Instead, the price of energy at Tiers 3 and 4 went up sharply (6.3% and 7.2% respectively) while summertime allocations generally declined. (We didn’t discuss it in our previous post because it doesn’t affect that many SCE customers, but allocations for “all-electric” homes dropped dramatically, as much as 35% or more! If you are in an all-electric home, you better be generating your own electricity!)
But the changes in the rate structure are complex - after all, non-summer allocations often increased and without Tier 5 it figured that some customers - those who use a great deal of energy - would actually benefit from the change. We decided to find out.
To assess the impact of the new rate structure, we modified our old SCE Domestic rate model (which we have used to estimate future savings from installing solar) to reflect the rate structure changes: new baseline allocations and the elimination of Tier 5 in return for modifications to the lower Tier rates. Now we had two models - one based on the “2012 Historical Rates” and the other based on the new rates effective April 1, 2013.
Since the allocations vary by region, we chose Region 9 (which covers the cities surrounding Run on Sun such as South Pasadena and San Marino) as the home for our representative SCE customer. We then ran our models based on a daily usage ranging from 10 kWh (way less usage than any single-family home in either of those cities) all the way up to 70 kWh (greater usage than all but the largest properties). To account for summertime loads, we increased the daily usage by 50% for the months of June through September (a generally conservative estimate, especially as daily usage increases).
Here are our results (click for larger):
Despite the presence of four (or five for 2012) different rates, the actual graph is almost entirely flat, except for usage at the very bottom end of the scale. Fairly early on, we see the 2013 rates bend up above the values from 2012 with the greatest increases between 18 and 36 kWh daily usage (more on that in a moment).
As predicted, however, the rate increase is actually a rate reduction - if you happen to own a mansion or are running a whole bunch of Grow Lights. Indeed, for folks way out there on the right edge of this curve, they will see their annual energy costs decline by more than 1%! How nice for them.
But how did the rest of us do? Let’s zero in a bit on where the middle class lives and see what their rates look like - check this out:
For this graph we have restricted our usage values to the range of 18-36 kWh and narrowed the scale of our cost axis to start at $1,000 instead of $0. The resulting “magnification” shows who is shouldering the bulk of this rate increase. Customers in this band will see rate increases this year of anywhere from 2.88% to 4.85% (at 28 kWh), and keep in mind this is just one year of a multi-year rate increase plan.
Who are these lucky folks? Well, in terms of potential solar clients, their system needs would range from 3.6 kW (just above our minimum system size) to 7.2 kW - in other words, the “sweet spot” of our potential residential clients.
So what is our takeaway from this analysis? Well, as is seemingly commonplace these days, if you are in the middle you are getting squeezed. Folks on the low end mostly get a pass while folks on the high end are actually getting a break! But if you are in the middle, it is your pocket that is getting picked.
Installing solar is your best hedge against the clever targeting by the team, no, make that the legion of lawyers and economists employed by the utilities to design these rate structures. We cannot stop their scheming, but we can certainly assist you in fighting back! Give us a call today, or better yet, fill out our online form and let’s put this new rate model to use in saving you some money!
Coming up later this week: how the new rate structures affect commercial customers.
You might think that the hardest part of a small commercial solar project (15-50 kW) is the actual installation - after all, installing solar does combine the two greatest occupational hazards to health: falls and electrocution. But you’d be wrong. You can guard against those.
No, the hardest part - after all the time and expense of finding your potential client and putting together a winning bid - is helping them figure out how to pay for it.
Small commercial projects are an odd-sized nut to crack when it comes to financing: at a cost of between one and two hundred thousand dollars they tend to be too pricey for an entity to just write a check, but they are too small to support more elaborate financing schemes which usually only apply for projects in excess of $250,000. So what to do?
We have written a lot about PACE, and while we are excited about it as a concept, it doesn’t seem to be getting a lot of traction.
For one thing, many non-profits (a niche of ours) don’t qualify since they don’t pay property taxes. For another, a big part of Southern California has failed to get on the PACE bandwagon at all. In particular, while Los Angeles County has a program in place, not every city has signed on (we’re talking about you, Irwindale!) and Orange County is a PACE black hole, with no activity there at all. What is up with that? (And please, don’t tell me this is a political thing - there is nothing more inherently conservative than putting your money into a near-zero-risk investment wth great returns.)
Similarly we find it odd that local banks aren’t reaching out to solar companies to work with them on financing these projects with conventional, low-interest loans. After all, installing solar helps to reduce a company’s operating costs in an area of greatest volatility. (You did hear that SCE is raising its rates on average by 17.2% over the next three years, right?) So financing such an improvement means that the local bank is creating a more stable company in their community - which means that they will be more likely to stay in business and remain a customer for longer - which is good for everyone, right?
And what of the national banks? Why aren’t they reaching out to local companies and not just the giant players? A year ago we participated in a small business contest sponsored by Chase bank. We easily collected the required number of online supporters to qualify (thank you!) and while we didn’t really expect to win, we certainly expected to hear from Chase about how they could work with us going forward. Well we were half right - we didn’t win. But as for follow-up from Chase? Zilch, zero, nada.
A Twitter friend reminded us of Mosaic, the crowd-funding service for financing solar projects so we went to their website to check them out. This is a curious thing. For one thing, the website disclaims their service from being crowd funding, saying:
Mosaic’s services do not constitute “crowd funding” as described in Title III of the Jumpstart Our Business Startups Act ("JOBS Act").
We aren’t sure what that means, but it is, at best, counter intuitive.
For another, we couldn’t find anyway on the website to submit information about a potential project that you wanted to get funded. The best that we could do was find a “support” email address which produced an auto-response but as of now, nothing else.
What is needed for small commercial projects is a simple and elegant tool like the one displayed at the start of this post. Minimal paperwork. Reasonable cost of capital given the exceptionally low risk. Quick approval times. Surely someone can help us crack this nut?
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