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

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12/12/12

  12:46:00 pm, by Jim Jenal - Founder & CEO   , 1768 words  
Categories: All About Solar Power, AB 811/PACE/LACEP Funding, Feed-in Tariff, Westridge PAC Project, 2012

Top 10 Posts of 2012

MistletoeYear-end is often a time for retrospection, and few things are more popular this time of year then Top 10 Lists (unless it is kissing under the Mistletoe - to which we say, feel free to combine both!).  We decided to look back over our dozens of posts this year and highlight the 10 most popular based on our viewership data.

Each of these posts was viewed more than fifteen hundred times - which leaves us both humbled and very thankful indeed.

So here they are, our Top 10 Posts for 2012 (click on a title to read the post in full)…

#10 - SolarCity Files for IPO

One of the big stories of the year has been the on-again, off-again, on-again story of SolarCity’s proposed Initial Public Offering.  While cleantech IPOs have not been a very pretty site, there was much buzz about the SolarCity IPO as being a potential bellwether for a change in “green” fortunes.  SolarCity’s original confidential filing with the SEC coincided with a remarkable repricing of their systems as recorded in the CSI data:

Oddity - SolarCity's dramatic price reduction

By the time the IPO was publicly revealed in October, it was clear that one of the major risk factors facing potential investors was how the U.S. Treasury would treat the question of how SolarCity had valued its systems for purpose of claiming federal tax dollars.  A question, which we would note, still remains to be fully answered but the preliminary indications are not good for SolarCity and its existing investors.  For example, SolarCity revealed that for a limited number of systems, Treasury had reduced the allowable price per Watt from $6.87 to $6.00 for California systems and from $6.20 to $5.00 for Arizona - reductions of 12.6% and 19.3% respectively.  When applied to the $341 million SolarCity says it has claimed so far, that could be a $43 million haircut.

As of this writing, SolarCity is now saying it will go forward with a revised offering at $8/share - down nearly 43% from the midpoint of its earlier proposed range of $13-15.  Stay tuned, this story is far from over.

#9 - Q: What is more popular than Solar? A: Nothing!

In an election year it was not surprising that some echoes of that contest found their way into the posts for this blog.  One interesting point was the survey data about the popularity of solar among voters.  Didn’t really matter what your party affiliation, solar beat out all other forms of energy - heck, solar was more popular than chocolate!

Chart of favorable-unfavorable ratings for different energy types

Not that you could guess that based on some of the press coverage of the industry which seemed to have only ever heard of one solar company - Solyndra!

But voters’ belief in solar included putting taxpayer money behind it.  A full 64% of all voters - and an even more impressive 67% of the much courted “swing voters” - supported tax subsidies and other financial incentives for solar.  (By contrast, only 8% of all voters supported continuing subsidies for the coal industry.)

#8 - Non-Residential PACE Rebounds - at Least in LA County

One of the most written about topics on this blog has been the struggle to bring PACE financing to reality.  PACE - an acronym for Property Assessed Clean Energy - is a program that allows a property owner to finance a solar project by annual property tax payments.  PACE was all set to go in the residential market when Fanny and Freddy balked in the aftermath of the 2008 mortgage bubble crash.

But there is good news as the program has been revived for commercial property owners in LA County (and some surrounding counties as well).  The county launched a website and interested potential clients can learn more about the program there.  We are looking forward to doing our first PACE project in 2013.

#7 - CPUC Provides Progress on Net Metering

Most residential and commercial solar systems make use of net metering - that is, the method by which a solar customer gets credit for excess energy produced by their system during peak output versus the amount of energy actually purchased off the grid.  Those numbers are “netted out” and the customer pays if they are a net consumer and is given a payment (tiny though it may be) if they are a net producer.  Good deal all around, yes?

Well, not so much, apparently, if you are a utility.  Utilities in the state, particularly PG&E, have been trying to severely limit the number of solar power systems subject to net metering.  But in an important victory for the solar industry, last June the California Public Utilities Commission ruled that PG&E’s proposed way of measuring that cap was incorrect and in so doing, substantially increased the number of systems that California residents and businesses will be able to install.

The utilities did get something in return, however, a study to be performed this coming year to assess the costs and benefits of “various levels of [net metering] implementation."  This will be a very important study and it may well have far reaching impacts on the growth of solar in California.  Needless to say, the solar industry will need to be heavily involved in monitoring this process as it is certain that the utilities and their lobbyists will be pushing hard to get a result in their favor.

#6 - Power to the People - Support SB 843!

Community solar

One of the frustrations of running a solar company is that there are potential clients out there for whom their own solar power system simply cannot work.  Their roof might be all wrong, or the shading from surrounding trees simply cannot be overcome.  Or they might be renters, or a commercial business with a relatively small, weak, roof that doesn’t match their load.  Whatever the case, but way more often than we like, we simply have to say no.

Community Solar - the goal of SB 843 - could go a long way toward solving that problem.  Under a Community Solar program, a system developer could sell shares in the output of the system to any customer of the utility where the project is located.  Those customers could purchase just the amount that they needed, unconstrained by the happenstance of roofs, or landlords, or loads.  The system provides its power directly to the grid, and the utility bills the customers based on their share of the energy produced (much like the “green energy” that some utilities now allow their customers to purchase).

Up against the end of the legislative session and facing still opposition from the utilities and their allies in the legislature, SB 843 died in September.

The good news is that the bill is slated to be reintroduced next year.

#5 - Westridge Project Grabs Pasadena Weekly’s Green Issue Front Page!

Jim Jenal, Run on Sun Founder, poses beside the 52.3kW solar power installation at Westridge School for GirlsWe’d be lying if we didn’t admit that our favorite project this year - at least in terms of coverage on this blog - was our install at the Westridge School for Girls here in Pasadena.  Seven different articles chronicled that project from our initial selection, to a series of step-by-step construction stories, to reporting on the accolades that the project garnered for both Westridge and Run on Sun.

Micro-inverter manufacturer Enphase Energy featured the project as one of their Projects of the Week, the City of Pasadena cited the project in selecting Westridge for a Green City award, and Pasadena Weekly put the project on the cover of their annual “Green Issue."  Some great PR for a great project with a great client.  We look forward to doing it again with the folks at Westridge real soon.

#4 - LADWP Updates FiT Status

FiT price decline over timeLADWP continues its slow march to rolling out a FiT and our #4 post detailed the latest status update from DWP.  Alas, we still haven’t seen data from the demonstration project released and as near as we can tell, the “standard” contracts for those approved projects are still being finalized long past the October-November timeline that was announced with this update.

Will this program roll-out in January as scheduled?  Seems unlikely, but stay tuned!

#3 - Vote Yes on 39

Voters in California put their votes where the polls said they would be - supporting Proposition 39 that would greatly increase funding for energy efficiency and green energy projects with 60% of the vote.

Amidst rumors of possible legal challenges, the fight over, and potential implementation of, Prop 39 will be one of the big solar stories in 2013.

#2 - Centex Clouds Solar Tile Repairs

Mega-home builder Centex of the Pulte Group has a problem with some of its highly-touted “solar homes” - the homeowners cannot use their solar power systems because of faulty roofing tiles that threaten to catch on fire.  The manufacturer has gone out of business and while Centex has said that they will pay for repairs, they are asking homeowners to sign a pernicious release that could leave them exposed if there are problems with the repair down the road.

Centex logo

After we originally wrote about the problem, we were contacted by one of the homeowners asking for our help.  We got Centex to admit that they might conceivably waive the release requirement but apparently only if the homeowner is willing/able to push back - hard.  Frankly, we think that Centex should just step up and do the right thing - but if they are unwilling to do so, we sure would like to see the authorities provide whatever extra encouragement is needed.

Despite only being published a short time, this story jumped to be our second most popular post of the year and it would make our year to be able to report that this ultimately has a happy ending.  We’re still waiting.

And Our #1 Post of the Year:
Outliers & Oddities: State of SoCal Solar 2012 - Part 3

Once again, our most popular post for the year was our annual examination of the Outliers and Oddities as determined by analyzing the CSI data for the first half of the year.  Since it was published on September 6th, it has racked up more than 4,000 views!

Of all that we reported on in this very lengthy (2795 words - yikes!) post, perhaps the most troubling was what we documented with this graph:

Years of delay

This graph shows how the extraordinary delays in installing systems by industry-giant SolarCity is retarding the progress of the industry in meeting consumer needs and in protecting the environment.   Word to the wise, bigger isn’t necessarily better and “free” may not be all that it is cracked up to be!

Looking Ahead…

That’s our recap on the year - our best year ever.  We are really excited for 2013 as the economy continues to improve and we finally have the uncertainty of the past twelve months behind us, we are expecting great things from the year ahead.  And, of course, you can continue to expect our mostly informed, somewhat irreverent take on all things solar.  Thanks for your support and encouragement - especially you, Vick!

Happy Holidays!

11/30/12

  11:00:00 am, by Jim Jenal - Founder & CEO   , 196 words  
Categories: All About Solar Power, Solar Economics, SCE

SCE Rates Set for 3-Year Climb

The California Public Utilities Commission (CPUC) just approved a modified rate case for Southern California Edison (SCE) that will guarantee rate increases for the next three years.  According to an article discussing the decision by Marc Lifsher in the LA Times, SCE’s rates will increase on average by 5% this year.  But that is just the start of the bad news for SCE ratepayers - SCE’s rates will increase by 6.3% for next year and by an additional 5.9% in 2014!

According to a press release put out by the CPUC, SCE has twenty days to file new tariffs with the CPUC which will become effective immediately.

For a commercial SCE customer who presently pays roughly $10,000/month, they can expect to be paying $11,720/month once the three rate increases take effect - an increase of more than $20,000/year.

There can be no doubt that comparable - or higher - rate increases will continue.  Adding a solar power system to your business or home is easily the best hedge that you can have against such one-way cost increases.  Give us a call (626-793-6025) or click on that big Sun on the right and let’s get started today at putting you in charge of your energy future.

11/29/12

  12:20:00 pm, by Jim Jenal - Founder & CEO   , 626 words  
Categories: Solar Economics, SEIA, Climate Change, Ranting

Smart ALEC Attacks Renewables - UPDATED

ALEC logo

UPDATE - We are starting to see “news” articles that seem to be following the ALEC playbook, including one from the AP bemoaning the carbon footprint of solar modules, particularly once you considered disposal of associated hazardous waste.  But not so fast, says this piece which offers a contextual rebuttal.


The ultra-conservative American Legislative Exchange Council (ALEC) - the organization that brought you the much maligned “stand your ground laws” - has trained its guns on another vulnerable target: economic support for renewable energy.  Now it is up to the supporters of a clean energy future to push back against ALEC’s concerted campaign of “subversion” against renewables.

We have written before about the PR problems facing the solar industry, a problem that continues to this day.  However, we are starting to see that this problem isn’t simply the fault of misinformed or lazy reporters.  To the contrary, it now appears that there is an orchestrated campaign underway with the expressed intent of denigrating the entire renewable energy industry - and the spearhead of that campaign is ALEC.

ALEC’s mission - funded by such dirty energy sources as Exxon Mobil and the Koch brothers - is to develop conservative legislation for adoption by state legislatures around the country.  Although generally unknown to the public, ALEC has had considerable success pushing its conservative agenda, which now includes climate change denial.  Not content with promoting “model” legislation that would roll back Renewable Portfolio Standards, ALEC is now looking to create a national organization devoted to making the wind industry in particular - and potentially all renewables in general - unacceptable to the public, and thus to policy makers.

The Guardian newspaper got a copy of an ALEC internal memo that laid out their ultimate goal:

Cause subversion  in message of industry so that it effectively becomes so bad no one wants  to admit in public they are for it (much like wind has done to coal, by turning green to black and  clean to dirty).

Ultimate Goal: Change policy direction based on the message.

While it may be true that the present target of ALEC’s efforts is the wind industry, one need not be a visionary to realize that if they can succeed there the solar industry will be next.  And while the Orwellian prospect of “turning green to black and clean to dirty” might seem like an unlikely goal, these types of “big-lie” campaigns have been successful in the past. Indeed, the failure to take meaningful national action on Climate Change is at least in part attributable to the tactics of the Heartland Institute, coincidentally one of the co-conspirators on this scheme with ALEC.

So how do we fight back?  Here are a number of ways:

  1. Get informed - the Sierra Club has published a detailed report about the threat titled, “Clean Energy Under Siege” which is alarming but very informative.
  2. Get involved - if you are a solar installer you need to support our trade association, the Solar Energy Industry Association (SEIA). If you are a concerned member of the public, the Sierra Club would love to have your support.
  3. Push back - contact your legislators and let them know that you are wise to the attack on renewables coming from ALEC and that you demand that your representatives say No!

Without a doubt the folks supporting ALEC have more money for this fight than does the renewable energy industry.  But we have the people on our side with more than 90% of the American electorate supportive of solar and other forms of clean, green energy.  Let this be our wake-up call - we are making strides and our opponents have noticed and are now fighting back.  As has been noted before, “First they ignore you, then they ridicule you, then they fight you, then you win.”

It’s winning time!

11/13/12

  10:28:00 am, by Jim Jenal - Founder & CEO   , 595 words  
Categories: Solar Economics, Climate Change

"Ripe for Retirement" - Coal

Coal-fired power plantCoal-fired power plants produced a staggering 42% of the electricity used in the U.S. in 2011, but a new study by the Union of Concerned Scientists says that many of those plants are Ripe for Retirement and should be shut down.  The health, environmental and climatic consequences of burning coal are well known and for many provide ample arguments for their prompt removal from the grid.  But 42% of U.S. electricity is a big nut to crack and one that won’t be solved quickly.

UCS takes an unusual approach to making their case against coal.  They begin by acknowledging all of those well documented problems associated with burning coal for power: sulfur emissions that lead to acid rain, mercury poisons fish and causes neurological damage in children, soot creates smog that causes lung disease and triggers asthma attacks, combustion leaves behind toxic ash, coal mining wreaks havoc on the land and the people who mine it, and coal-fired plants are the single largest source of CO2 emissions in the U.S.  While all that is undeniably true, the Report makes the compelling case that these relic plants are simply no longer economical to operate and should be shut down in favor of cleaner, more sustainable - and cheaper - options.

UCS looked at 1,169 coal-fired generation units around the country and calculated their present operating costs to their operating costs once they had installed modern pollution control technology on four pollutants: sulfur dioxide (SO2), nitrogen oxides (NOx), particulate matter (PM or soot) and mercury.  They then compared those revised costs against the operating costs of natural gas combined-cycle (NGCC) plants to determine economic viability.  To develop a range of economic thresholds, they calculated costs for new NGCC plants (where capital costs had to be included) and old NGCC plants (where capital expenditures had already been recouped).

Those competing thresholds provided a low estimate of 153 coal-fired generators that were ripe for retirement (accounting for 16.4 GW of production capacity) all the way up to some 353 units representing 59.0 GW - a range of 1.7-6.3% of current U.S. electrical generation.  (This is in addition to the 288 coal units already scheduled for retirement by their operators which collectively account for 41.2 GW or 3.8% of existing capacity.)  But even if all of those units were shut down promptly the lights would still stay on - “the U.S. is projected to have 145 GW of excess capacity by 2014 above and beyond reserve margins required to maintain reliability at the regional power grid level,” the report’s authors found.

Because these Ripe for Retirement coal units are the older, less utilized and dirtiest units in the fleet, replacing their combined 100 GWs of capacity with cleaner alternatives could cut CO2 emissions by anywhere from 245 to 410 million tons annually, depending on what resource replaces the coal.  That would account for 9.8 to 16.4% of 2010 CO2 emissions from the power sector!

Beyond a doubt, energy efficiency and renewables must play a major role in the replacement of this capacity.  The good news is, they already are: “Over the next eight years (that is, by 2020) we project that existing state policies requiring the use of renewable electricity and energy-saving technologies will generate or save more electricity than would be lost (100 GW) through the closure of retired coal generators.”

That is the good news.  The bad news is that even if all of these “Ripe for Retirement” units were shut down over the next eight years, we still have another 229 GW of coal-fired generators out there - belching CO2 into the atmosphere.  The challenge will be to provide the regulatory - and political - environment where it becomes economical to shut down those plants as well.

11/01/12

  12:32:00 pm, by Jim Jenal - Founder & CEO   , 543 words  
Categories: AB 811/PACE/LACEP Funding, Energy Efficiency, Ranting, Non-profit solar

Vote Yes on 39

Yes on 39!Amidst the multitude of measures on next Tuesday’s ballot, Proposition 39 has garnered little media attention. For proponents of renewable energy, however, it might be the second most important vote you can cast on Election Day. Here’s our take.

Prop 39 seeks to close a loophole in existing state tax law that allows multistate corporations to decide for themselves how to calculate their taxable income.  Present law provides either of two methods, the “Three-Factor Method” or the “Singles Sales Factor Method” as explained by the independent Legislative Analyst:

  • Three-Factor Method“: This method uses the location of the company’s sales, property and employees.  When using this method, the more sales, property or employees the multistate business has in California, the more of the business’ income is subject to state tax.

  • Single Sales Factor Method“: This method uses only the location of the company’s sales.  When using this method, the more sales the multistate business has in California, the more the business’ income is taxed.

Under Prop 39, the first method would be repealed and every multistate business would pay state income taxes based on the proportion of its actual sales in California.  Frankly, this only seems fair - if a company is deriving 75% of its revenue from sales in California, why shouldn’t it pay taxes on that 75%?  Moreover, the other method allows a multistate company to reduce its California taxes by moving employees or property out of the state - why would we want to provide a financial incentive for them to do that?  Indeed, this is such a common sense modification to the tax code that, according to Prop 39 proponents, it has already been adopted by both red and blue states including New York, Michigan and Texas.

Ok, so this makes sense as a measure of tax policy, but why should renewable energy proponents be backing this measure?  Simple — Prop 39 splits the money it raises for the first five years between the General Fund (which will boost school funding thanks to Prop 98 and help close California’s budget gap) and a special fund to support energy efficiency and alternative energy projects in the state.  (After five years, all of the money raised goes to the General Fund.)

Specifically, Prop 39 would create the Clean Energy Job Creation Fund to provide financial support for projects at schools (including public schools, colleges and universities) and other public buildings as well as support for innovative public-private partnerships like PACE programs.  The ballot measure also creates a Citizens Oversight Board to provide for audits of the program and complete documentation of how every dollar of the Fund is spent.  (You can read the full text of Prop 39 here.)

Prop 39 has extremely broad support (see a larger list here) including from the following:

  • Former Secretary of State George P. Shultz (Co-Chair)
  • Los Angeles Business Council
  • American Lung Association/California
  • Coalition for Clean Air
  • California Alliance for Retired Americans
  • California Federation of Teachers
  • Los Angeles Conservation Corps
  • Natural Resources Defense Council (NRDC)
  • The Nature Conservancy of California
  • Planning and Conservation League
  • Sierra Club California
  • Communities for a Better Environment
  • Solar Energy Industries Association (SEIA)
  • The Fresno Bee
  • La Opinión
  • Los Angeles Times

Here’s a one-minute video from the measure’s sponsor:

We hope you will join us in supporting this tremendously important - if largely unheralded - ballot measure.

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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.
In addition, Run on Sun offers solar consulting services, working with consumers, utilities and municipalities to help them make solar power affordable and reliable.

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