Everyone in the solar industry is focused on soft costs—that is all the extra expenses that are rolled into the cost of installing a solar power system. Since prices for solar modules have dropped to below a dollar/Watt, the percentage of an overall system price consumed by soft costs continues to increase. But soft costs are really hard to reduce and we just had a painful example to help drive that point home.
One of the most pernicious of the soft costs are those associated with getting approvals from the Authorities Having Jurisdiction (AHJs) over the project. That includes both the utility that must approve any rebate application and interconnection agreement, as well as the local building and safety department which must issue the permit and inspect the project. The requirements for approving a solar power system vary considerably from jurisdiction to jurisdiction and that lack of standardization—combined with just plain arbitrariness that runs rampant in some places—means long, pointless delays in moving projects forward.
We are working on a medium-sized residential project in Los Angeles. If we were doing this in Pasadena, it would be installed by now, but as everyone knows, LA isn’t Pasadena. We submitted the requested materials for reserving the rebate on this project on December 3 of last year and then sat back while we waited to hear from them. Weeks went by without a peep—while we reassured our client that we would update them as soon as we heard something.
Then, finally, we did. On February 19th, seventy-eight days after we submitted the application, we got an email telling us that the application was “incomplete” and that:
If you fail to submit the requested documentation by the above date your incentive application will be subject to cancellation without further notice.
(It really was in red type.) How long did they give us to respond? Two weeks. In other words, we get less than one fifth of the time that LADWP took to, in its sole discretion, identify “deficiencies", to cure those deficiencies.
If that wasn’t bad enough, LADWP adds insult to injury by sending a copy of the “deficiency” email to the client! Pity the poor client—they have picked a contractor, signed a bunch of paperwork, and made a down payment, all months ago with nothing to show for it, and then they get an email that suggests for all the world that their contractor has botched things and their project is about to go south! How helpful.
So now the contractor has to spend time reassuring the client that despite the dire tone of the email, everything will be ok. Then you spend more time addressing the “deficiencies” that have caused all the ruckus in the first place.
I won’t bore you with the entire litany of nonsense that we were asked to cure, but my favorite one was this: when you submit information about the system online, you are supposed to show the cost of modules, the cost of the inverter(s) and the balance of system (BoS) costs. You are also required to submit a copy of your contract for the sale. This we did. But they complained that the contract price and the system price entered online did not agree. Now here’s the thing, once you submit the rebate application to LADWP you can no longer see those details, so the contractor has no way to know where this “error” came from. So, with no other options, you tell them that the contract is the controlling document as to the system cost so they should use that.
Instead, they send out yet another email, this time with the scary heading: “FINAL NOTICE” (yes, all in caps) with the following declaration:
The Los Angeles Department of Water and Power (LADWP) has received your Solar Incentive Program application, and it is still incomplete.
And yes, they send a copy of this email to your client as well.
Now if they had actually read the contract they would have understood that the discrepancy is due to the rebate amount itself. Online, the total cost reflects the price before rebate. But because we front the rebate for our client, the contract price is net of the rebate amount. (The contract itself spells that all out, of course, but then LADWP would have to actually read the contract.) We thought about explaining this before coming to our senses and realizing that was a lost cause. Instead, we created a letter requesting that they modify the online data to reduce the BoS amount by the rebate, and uploaded that to their system. Voila, just like that, they reserved the rebate.
By my count, it took eight emails to get this resolved.
Just about everything about this interaction is wrong. The delay in the initial contact is wrong. The tone of the email sent out is wrong. The absurd disparity between the timing LADWP allows itself versus that to the contractor is wrong. And the lack of understanding of what they are reviewing is infuriatingly wrong. It builds in delays and costs to deal with those delays. It is what makes soft costs so damn hard.
It needs to change.
Solar rebates are fleeting in many locations—now you see them, now you don’t. Case in point, Burbank Water and Power (as is the case with its cousin in Glendale) is notorious for offering, and then taking away solar rebates. We monitor BWP’s website for new developments, and we have now learned that they will be holding a lottery for possible rebate funds next July. No additional details were made available; presumably they will be posted sometime in June.
Given that development, we decided to update our overall rebate status. Here is how things stand generally in the Run on Sun service area as of this date:
|Utility||EPBB ($/Watt)||PBI (¢/kWh)|
|(Click to see website)||Residential||Commercial||Non-Profit||Residential||Commercial||Non-Profit|
|Anaheim||Unavailable until June, 2014||Unavailable until June, 2014|
|Azusa||Wait List||Wait List|
|Burbank (BWP)||Lottery in July, 2014||Lottery in July, 2014 (30 kW or less)|
|Glendale (GWP)||Unavailable until 7/1/2014||Unavailable until 7/1/2014|
|Los Angeles (LADWP)||$0.40||$0.70||$1.45||Not used|
|SoCal Edison (SCE)||$0.20||$0.25||$0.90||2.5¢||3.2¢||11.4¢|
Here are a couple of very important qualifications to what appears in that table:
This is a moving target; watch this space.
We have been teasing out bits and pieces of our new book, Commercial Solar: Step-by-Step, all summer as we neared the end of the publication process. Well today we can formally announce that it is available both at the Run on Sun Publishing eStore (where we get a better royalty - hint, hint!) and on Amazon.com!
Commercial Solar is intended for two primary audiences:
As the title suggests, the book provides an overview of the process by which an interested party - say, a facilities manager - can go from knowing next to nothing about commercial solar to identifying appropriate contractors to provide bids, analyzing those bids to make meaningful comparisons, determining financing options that are appropriate and even overseeing the actual installation process.
The book features a Foreword written by Boaz Soifer, VP of Sales at Focused Energy:
The material could be dry (much of the reading on this subject is), but is instead casual but precise, clearly laid out, and made accessible through handy use of a narrative in which the Facilities Manager of a fictional company undertakes a commercial solar project himself…
In his typical style—approachable, honest, quirky, and occasionally scathing—Jim has thoughtfully flattened out the complex world of commercial solar PV into an understandable roadmap that anyone can follow to project success.
Interested? You can download a two-chapter excerpt of the book for free, here. Better yet, you can purchase the book today from either our eStore or Amazon for just $9.95. If you are interested in bulk sales (i.e., ten or more copies), discounts are available. Please contact us at Bulk Sales for more information.
And of course, we welcome your comments either here on the blog or at Amazon. Thanks for your support.
Pasadena Water & Power (PWP) has just made their long anticipated rebate reduction announcement. Effective October 16, 2013, residential rebates for solar power systems will plunge from today’s $1.40/Watt to just 85¢/Watt - a 40% reduction. Other rebate rates were not changed.
This means that for a typical residential system installation of a 6 kW system - say 20 LG 300 modules with Enphase Energy M250 microinverters - your rebate will decline by more than $3,000! That is a lot of money to leave on the table so the time to act is NOW!
Once the rebate is reserved, homeowners have a full year to install the system - so even if you aren’t ready to go forward with a project for another six to nine months, you still want to get your rebate reserved now to take advantage of rates that we will never see again.
Please keep in mind that PWP has also moved over to PowerClerk - an online tool that your solar contractor must use to submit your rebate application. Your contractor has to be pre-approved by PWP to access PowerClerk. You will want to make sure that your contractor is familiar with PowerClerk so that there aren’t any problems with your rebate application that could cause it to be rejected, forcing you to have it resubmitted at the lower rates.
Run on Sun is already approved on PowerClerk with PWP so you can be confident that your rebate will be processed properly the first time.
Don’t delay - give us a call at 626-793-6025 or click on the sunny Go Solar Now! button to lock-in your rebate before it’s too late!
In Part One of this three-part Case Study we learned how Westridge School chose Run on Sun as their solar contractor. Here in Part Two we focus on the actual process of the installation as seen from the client’s perspective.
With the paperwork filed and the rebate secured, Run on Sun had a very tight window — less than two weeks in April 2012 — in which to install and connect all 209 solar modules and get the monitoring software up and running. The goal was for the project to be completed and operational by the time Westridge students returned from Spring break, so time was of the essence.
For the rooftop display Run on Sun used a microinverter system supplied by Enphase Energy, which allows customers and solar installers to track the output of the modules, individually or collectively, from the convenience of their computers, iPads or smartphones. This software was a selling point for the school, because it would make the technology accessible to students and allow teachers to creatively incorporate aspects of the solar system’s performance into classroom instruction.
The modules were grouped into three sub-arrays that formed a larger circuit. Under each module, a microinverter was installed to convert DC energy gathered from the module into AC power, which could be combined and fed back into the school’s electrical service. The 1:1 ratio of microinverters to modules allows for a more detailed readout that lets users know the output of each module and gives an easy-to-read display should anything ever go amiss, from a connection issue to dirt on the module’s surface.
Throughout the installation Williams remained on hand to oversee the work, though there were no delays and no change orders requesting funds beyond what had been originally estimated. Within the assigned two-week period, Run on Sun had completed the project on time, and everything was in working order.
“I’ve worked with a lot of contractors, and I can honestly say, in this situation, this was one of the most seamless projects we’ve ever completed,” Williams recalls. “They were here early on the first day and, boom, they got it. It was done on schedule, at the price they said and signed off by the city. I wouldn’t hesitate to do a project like that again.”
April 2013 marked the one-year anniversary of Westridge School’s solar installation, and Williams reports the system is running smoothly. The Enphase software makes it easy for officials, teachers and students to monitor the activity of all 209 modules, but Run on Sun also keeps a close eye on the operations and reaches out if and when an anomaly is detected. In the event that an outage or a decline in energy production should occur, the company promptly notifies the school.
For example, when one of the modules stopped reporting and apparently needed to be replaced, Run on Sun immediately contacted Williams to schedule a visit. The rest of the modules were still in full working order, and upon close inspection it was revealed that a connection had come loose. Still, to ensure maximum performance, the company replaced the microinverter at no cost to the school.
Another time Williams received a notification email from Run on Sun after the campus Internet connection had been temporarily cut during some service upgrades. And when the energy dipped from its norm of exceeding system predictions to 98 percent of anticipated, a call came in with a recommendation to check the array for accumulated dirt. After a brief spray with a hose, the system was back to producing at maximum capacity.
At the one-year mark, the school became eligible to receive its first annual rebate from Pasadena Water and Power. This is the first of five annual rebates it will receive, the dollar amounts directly correlated to the system’s actual production.
When a technician came from the city to assess the energy output of the system, the school was excited to learn the results. The city’s readings gave some very welcome news, indeed — the energy generated by the installation was above and beyond the original estimate provided to PWP, and it looked like the first rebate would be larger than anticipated.
“He said, ‘You’re over your estimate,’ and that’s all we could ask for,” says a thoroughly pleased Williams. “To date, everything that was promised to us was delivered — plus.”
In terms of the amount of energy generated, the rooftop system has continued to outpace expectations. The school expected to see a return on its investment in seven years, but it’s shaping up to come in as few as six. Because of the installation, Westridge is using 30 percent fewer kilowatt hours and is seeing its bills reduced by thousands of dollars each month, in addition to the rebate. The overall savings is far greater than the cost of running the air-conditioner in the gym, the initial impetus for bringing solar to campus. To Williams, making the decision to go solar was a “no-brainer.”
“The neat thing about this is it runs itself. If somebody walks onto campus, they don’t know we have a 52 kilowatt solar system on campus,” he adds. “They don’t see it. It doesn’t impact anything. All you do is save money.”
We will conclude this three-part Case Study with Part Three - Advice for the Solar Reluctant.
The preceding is an excerpt from Jim Jenal’s upcoming book, Commercial Solar: Step-by-Step, due out this summer.