While a meaningful national energy policy is nowhere to be found, California continues to lead the way, announcing that its three Investor Owned Utilities (IOUs) have reached their intermediate target of 20% energy from renewables in 2011. According to a Renewables Portfolio Standard (RPS) Status Report just released by the California Public Utilities Commission, Southern California Edison (SCE), San Diego Gas & Electric (SDG&E) and Pacific Gas & Electric each exceeded the 20% target for renewables in 2011. Specifically, SCE lead the way with 21.1% of its energy delivered coming from eligible renewable sources, followed by 20.8% for SDG&G and 20.1% for PG&E. Collectively, the three IOUs account for roughly 68% of the state’s electric retail sales. Unfortunately, the report does not provide a breakdown of those numbers by type of renewable energy source.
Most of the gains are the result of utility-scale renewable energy products, but customer-side renewable energy generation - such as that created through the California Solar Initiative (CSI) - has also played an important role in two ways:
Under the RPS, the IOUs must average 20% from 2011-2013, 25% from 2014-2016 and 33% by 2020.
Growth of renewables in California has been dramatic: between 2003 and 2011, 2,871 MW of renewable capacity came online, with over 300 MW coming online in the first half of 2012 alone. But future growth stands to be even more dramatic with more than 2,500 MW scheduled to come online before the end of the year! According to a report in Forbes, that is the equivalent at peak output to the electricity generated by five nuclear power plants - which is good news given the problems at San Onofre.
It has been nearly a year since we last wrote about PACE, or Property Assessed Clean Energy, a means by which an assessment against a parcel’s property tax is used to pay for Clean Energy improvements, including solar. At that time, PACE for residential properties had been dealt a mortal blow by Fannie Mae and Freddie Mac which refused to subordinate their loans to the PACE assessment. (Never mind that by lowering a property owner’s utility bills you made it far less likely that the owner would default on their loan. Wonder who benefited the most from Fannie and Freddie’s actions? Certainly not consumers.)
Residential customers are still out in the cold, but for non-residential property owners the situation, at least in LA County, is far more promising and this may be just what is needed to get commercial and non-profit building owners into the game. The basic idea is this: any property owner who pays a property tax bill - including non-profits like private schools - can participate. They hook up with a funder - Wells Fargo is actively participating, for example - and the County issues a bond to that funder in exchange for the proceeds to fund the project. The property owner then pays off the bond by a property tax assessment that “runs with the land” so it is not a personal obligation of the property owner.
Part of the beauty of this program is its flexibility. The funder and the property owner reach mutually agreeable terms for the project including interest rate and payback period. (Indeed, we see this as a great way for a SunCorp to assist a non-profit entity in going solar.) The County simply determines that the proposed project qualifies for the program and then acts as the bill collector.
There are requirements for participation, but they are not particularly onerous:
Notably, there are no program requirements regarding equity in the building (although the funder may impose some) or other financial hurdles. The program can finance up to 100% of the project cost, including engineering reports and permit fees. To qualify, the building must either be in the unincorporated areas of the County or in one of the 79 cities (some 90% of the County) that have approved the program.
The County is actively trying to get the word out to building owners throughout the region. They have launched a website, and will be offering an outreach meeting for interested contractors sometime in August (we will post the details when we have them). In the meantime, you can request more information by emailing them at: firstname.lastname@example.org.
UPDATE - 3 - The Assembly Appropriations Committee voted 12-0 to send the Community Solar bill, SB843, to the Assembly floor for a vote. Curiously, while all twelve Democrats on the Committee supported the bill, all five Republicans failed to even vote on the measure! (Not exactly a profile in political courage.) We will continue to keep you informed of the bill’s progress - since it was amended in the Assembly, it presumably must still be approved by the Senate even after the Assembly (hopefully) passes it on Monday - and the legislative session ends this month so this is in no way a done deal.
UPDATE - 2- SB843 is headed for a showdown hearing in the Assembly Appropriations Committee, Chaired by none other than Run on Sun favorite, Assemblymember Mike Gatto. The folks over at Vote Solar have a webpage up where you can easily create a letter to your Assemblymember urging a Yes vote on the bill. Please check it out!
UPDATE - SB843 has passed the State Senate and is now working its way through the Assembly where it was recently amended. (The amendments appear benign.) However, we have learned that SCE has come out in opposition to the bill for reasons that are not immediately clear (apart from the cynically obvious ones). This means that your support is more critical than ever - please contact your State Assembly Member and urge their support for Community Solar!
Solar installations are sprouting up almost everywhere - and California leads the Nation with the most installed solar capacity. That’s the good news. The bad news is that not everyone who would like to add solar, can. Eco-minded renters, for example, are excluded - but so are homeowners who would love to put solar on their homes but have sites that are too shaded to be viable. (Believe me, here in shady Pasadena we know all about that!)
So what can be done? How can we allow rooftop-challenged individuals - and businesses - to participate in the solar boom? The answer is “virtual net metering” or “community solar." Under such a program, a solar power system is built and individual utility customers - homeowners, renters, business owners - own a portion of the system’s output. The solar system “sells” the power directly to the utility and the individual participants receive a credit on their bill in proportion to their share of the system’s output.
For example, let’s say a typical Pasadena homeowner needs a 7kW system to offset their usage whereas a renter needs 1.5kW and a local small business needs 20kW. A solar developer builds a 200kW system (maybe on a warehouse roof) and could sell corresponding shares to 8 homeowners, 16 renters, and 6 small businesses. Everyone gets what they need - with no concerns about local shading, or roof ownership, or even leaking roofs!
This fabulous innovation in how solar is deployed could really take the lid off solar installations and greatly expand the universe of people who could “go” solar - even if they couldn’t install solar. Indeed, one study asserts that providing this innovation in California alone would create 12,000 jobs, generate $7.5 billion in economic activity and generate $235 million in sales tax revenue by 2019! And it would do this without any additional public funding.
Talk about a win-win!
But we aren’t there yet. There is a bill pending right now in Sacramento - SB 843 - that would make this type of community solar legal amongst the State’s three investor owned utilities: PG&E, SCE and SDG&E.
And that’s where YOU come in.
You can show your support for this innovative program by contacting your legislator NOW and ask them to support the bill. Our friends over at Vote Solar have made this very easy - just click on this link. (If the link doesn’t work right away, please try again later - this is too important to miss out on adding your support.)
We will be tracking this legislation and will update you on its progress.
We have just learned that Burbank Water and Power (BWP) - which had suspended its solar rebates back in April 2011 - is introducing what might be the most bizarre rebate procedure ever - a rebate lottery! Here is the text of the announcement in its entirety from the BWP website:
Direction for how the program will accept new applications effective July 1, 2012 will be provided by the Burbank City Council on June 26. Staff is proposing the following:
Additional details will be posted on this web site in early July 2012. If you have additional questions please contact the program manager at email@example.com
- Retain the current policy of dividing the remaining non-Performance Based Incentive (PBI) budget amount evenly between residential and small commercial solar installations. This is projected to provide approximately $60,000 in incentives for each customer category.
- Lottery applications would be accepted from July 1 through September 1, 2012.
- On September 4, 2012, BWP would use a lottery system to provide an order of rebate consideration for both residential and commercial (including Not-for-Profit organizations)solar applications. Priority will be given to business accounts that fall under a not-for-profit designation.
- Applicants will be notified in early September of their lottery number and application status. ”Winners” will be provided one month to meet all previously defined system application requirements through BWP’s online PowerClerk system, including, but not limited to, a signed contract, meter service confirmation, and City permit application approval.
- Rebates would open at Step 6: $1.28/watt for residential installations and $0.97/watt for commercial installations.
If this announcement is to be taken at face value, this means that they will be setting up a two-month lottery for the chance to be one of maybe 12 residential projects to get a rebate and only one fo 2-4 small commercial projects. Seriously? All this Sturm und Drang for a grand total of 16 rebates? With no way for a BWP customer to know in advance whether they will be one of the lucky “winners"?
We sent an email to the address above asking for some clarification, but as of this publication we have not received a reply. If you think this “lottery” is as silly as we do, please send an email to firstname.lastname@example.org - maybe they will be more willing to respond to you!
Say what you will about the California Public Utilities Commission (CPUC), but their recent rulings have been strongly in support of the solar industry and on May 24, they did it again. In a unanimous decision, the CPUC voted to increase the cap on net metering, overriding protests from some utilities and misguided “consumer” advocates.
At issue was the manner by which the statutory cap on net metered installations was to be computed. Under existing state law, California utilities are obligated to accept net metering connections from solar power customers until the installed capacity of the utility’s solar customers equals 5% of the “aggregate customer peak demand." The problem before the Commission was how to define the denominator: does aggregate customer peak demand mean the peak demand that the utility as a whole had seen (as the utilities argued) or was it the sum of the peak demand for each of the utility’s customers?
That turns out to be a very significant difference and the CPUC came down on the side of the solar industry. As a result, the total amount of net metered capacity under the law will now be computed to be 5.2 GW compared to just 2.4 GW under the utility’s interpretation!
Unfortunately, the Commission didn’t stop there. Part of the argument from the utilities was the claim - echoed by TURN - that net metering amounts to a “silent subsidy” from the general rate payer to more affluent customers who can afford solar. In their ruling, the Commission authorized a study to investigate that claim and to quantify the cost-benefits of net metering to the larger rate paying community. Wrote the Commission:
The goal of the study will be to provide the Commission and all interested parties, including the Legislature, with a better understanding of who benefits, and who bears the economic burden, if any, of the NEM program. The report should quantify the costs and benefits of NEM to participants and non-participants and should further disaggregate the results by utility, customer class, and household income groups within the residential class. The study should also seek to gather and present data on the income distribution of residential NEM participants. In order to assess the costs and benefits at various levels of NEM implementation, the above analyses should be conducted using multiple NEM penetration scenarios, including at minimum, the capacity needed to reach the solar photovoltaic (PV) goals of the CSI and the estimated NEM capacity under the five percent cap as defined in this decision. The results of such a study then can be used by the Commission to set future policy for the NEM program, with full awareness of the economic impacts of any policy choices on all classes of ratepayers.
Once the study is complete, the Commission is to promulgate new regulations regarding net metering based on that analysis. All of this is to happen by the end of 2014 - but if new rules aren’t in place by then, net metering will be suspended until such time as they are! Again quoting from the Commission:
We anticipate this temporary suspension in the NEM program, effective January 1, 2015, will remain in place pending the issuance of new rules at the conclusion of a rulemaking proceeding we will commence once the study described above is completed. Of course, if the study can be completed and the new rules are issued prior to December 31, 2014, then the suspension of the program in 2015 will not be necessary. But if the post-study rulemaking remains open and incomplete on January 1, 2015, then under the terms of today’s decision the program will be suspended thereafter, and the utilities will not accept any new NEM applications, until the new rules are issued and take effect.
At the risk of sounding cynical, this sure feels like an opportunity for the utilities to game the system and drag out the rule making if they cannot get the deal that they want. This process will bear close observation!
As an aside, there was one odd detail buried in the decision - the numerator in that 5% computation is supposed to be the installed solar capacity. However, the value used is “CEC-AC Watts” which is computed as the PTC rating of the solar panels used, multiplied by the total number of solar panels, multiplied by the efficiency of the inverter(s) used. So for example, an installation of 20 LG 250 Watt solar panels driving 20 Enphase M215 micro-inverters would have a Nameplate power rating of 20 x 250 =5,000 Watts. The PTC rating of the LG 250, however, is 225.2 Watts and the Enphase M215 is 96% efficient, meaning that the CEC-AC rating would be:
20 x 225.2 x 96% = 4,323.84 Watts
But here’s the curiousity - rebates aren’t paid based on CEC-AC Watts - they are paid on the CSI rating. The CSI rating takes the CEC-AC rating and modifies it based on the actual characteristics of the site - shading, attachment method, azimuth and tilt. This is certainly reasonable as all four of those factors combine to have a significant impact on the energy yield of the system - and that is what an EPBB rebate is supposed to be incentivizing. So why doesn’t the net metering cap use the sum of the CSI ratings as its numerator? And if it did, how big of a difference would it be?
We decided to find out. We took the most recent CSI data set (dated May 30, 2012) and created a pivot table that would report by year and for each of the three investor-owned utilities ("IOUs") subject to CSI, the sum of the CEC-AC and CSI ratings and then give us the ratio. Here are our results combining all three IOUs in each year (in kWs):
These are very interesting numbers - the difference between the CEC-AC rating versus the system-specific-corrections-adjusted, CSI Ratings is very small. Now why is that? The simple answer is that you can actually score higher than 100% when you go from CEC-AC to CSI. How can that be? And how often does that actually happen?
To probe a little deeper we decided to just look at systems installed in SCE territory. Here’s what we found:
Indeed, over the total lifetime of the CSI project, systems installed in SCE territory have averaged 101.7%!
(The numbers drop off in San Diego Gas & Electric to ~98% whereas in PG&E territory the average drops to 96%.)
Still, as a solar installer, we had to admit that these numbers were troubling - we’ve done lots of rebate calculations since 2007 and we really don’t recall seeing design factor scores greater than 100%. An hour of experimentation with the online rebate calculator confirmed that experience - we could get configurations to equal 100%, but not exceed it. So what was the source of these results?
Then it hit us - we were calculating based on EPBB rebates - which makes sense because that is where the CSI rating is reported. However, larger solar systems receive PBI rebates - payments made based on actual performance over five years. What would happen if we distinguished PBI from EPBB rebated systems - would that explain our difference? Indeed it would - check this out:
How about that? From 2006 to 2009, neither rebate method averaged over 100%. But starting in 2010, PBI rebates consistently averaged over 100%, even while EPBB averages remained largely unchanged.
So why the difference? In July of 2009, the rebate calculator was changed. (You can find links to both the current and the old calculator on the CSI website.) It appears that the real difference in how the two calculators work is for PBI rebates - where it allows the design factor to exceed 100%. More importantly, the new calculator takes into account single or dual axis tracking configurations for PBI rebated arrays. Scanning the data, we discovered a site that actually has a recorded design factor of 148%! This is a 1MW system and you can see how a substantial number of comparably sized installations using single or dual axis tracking would really skew the results.
So now we understand where the numbers came from, but we are still somewhat troubled by our results. Are any of these utility-scale systems operating under net metering rules? That seems highly unlikely. And assuming that is the case, shouldn’t they be excluded from the net metering cap computation? In which case, using the CSI rating would add an extra 5% to that numerator, and that would be a good thing! Any CPUC Commissioners or other insiders who might care to educate us further, please do so in the comments.
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