Los Angeles doesn’t have a great reputation for being green. Sadly we are better known as a car-centric city frequently afflicted with smoggy skies. In fact, Los Angeles has been ranked the worst air pollution in the nation. Recently our fair city took one step closer to changing that! Last April the Los Angeles City Council voted unanimously to approve a motion asking the LA Department of Water and Power (LADWP) to develop a plan for how the city can move toward 100% renewable sources of electricity. LADWP - the largest municipal utility in the country - currently gets about 20-25% of its energy from renewables (solar, wind, geothermal, biomass and waste). The biggest challenge to going 100% green will be to convert from a grid which relies on coal and natural gas, which can adjust supply to meet demand, to one which can handle the fluxuations of solar and wind. The largest reductions in greenhouse gas emissions - nearly 9 million metric tons - will be through DWP’s existing plan to eliminate coal-fired power plants from their energy mix by 2025. (Side note: Shockingly, Pasadena’s energy mix coming from Pasadena Water and Power, has an extraordinarily high percentage of power coming from coal at 34% compared to CA average of 6% with no plans as of yet to move toward renewables! Hopefully they’ll follow in LA’s footsteps!)
Another 7 million metric tons of greenhouse gas emissions result from the remaining energy sources in LADWP’s mix, largely natural gas. As we move away from coal we need to be careful to not be lured to just switch to cheap natural gas. Last year the Aliso Canyon gas leak disaster - the worst in US history - proved this fossil fuel is a very dangerous source of energy for our communities. 11,000 residents were evacuated and hundreds reported methane-related illnesses from the leak. Aliso released 100,000 tons of methane, which has a warming effect 80 times higher than CO2 over the short-term. Currently there are also natural gas storage facilities in Playa del Rey and Playa Vista. Obviously natural gas is a serious threat to our public health and the environment. If we are going to get to a fully clean power supply a commitment similar to the departure from coal needs to happen with natural gas… and the faster the better.
With a 100-year old grid supplying 4 million Angelinos with power, LADWP is poised to make significant infrastructure investments. This is the perfect opportunity for the city to upgrade the system to accommodate the potential for a fossil-free future. Councilman - and co-author of the City Council motion - Paul Krekorian, emphasized the urgency for Los Angeles to move to clean energy:
“This is an enormous step forward that will help restore our environment and lead us to a sustainable, fossil-free future. For the third year running, Los Angeles was ranked as having the worst air pollution in the country, which is unacceptable and unhealthy for our families and neighborhoods. To reverse this trend we need big thinking and bold, smart action."
While Mayor Eric Garcetti has already set a goal of reaching 50% renewable energy by 2030, this recent legislation is only a starting point to research how to get to 100% but has no set timeline. This is a crucial first step, however, we are really looking forward to hearing the results of DWP’s research. A realistic but ambitious time-bound roadmap to ending our reliance on fossil fuels is crucial to improving our chances of preventing climate change’s most damaging effects.
San Francisco and San Diego are also among eighteen other cities who have committed to 100% clean energy goals recently. Four cities are already proving it is possible with fully renewably powered systems! Los Angeles, as the 2nd most populous city in the country and most polluted, can serve as a particularly powerful role model for cities and jurisdictions across the country. These plans have the potential to both help stop devastating climate change impacts but also to boost economies in the process. Some opponents of a renewable transition worry that it will hurt the economy but the growth of renewable jobs in recent years and a growing local economy has proven that is a false threat. Last year’s solar census reported that 10% of solar jobs - over 21,000 well paid jobs - are in Los Angeles! Going green saves money in the long-term. A report from the New Climate Economy found cities could save $17 trillion by 2050 by pursuing low-carbon solutions such as public transport, building efficiency, waste management and ‘aggressive’ solar implementation.
Now is the time to kick our transition to clean energy into high gear at local and state levels! We look forward to being part of the solution!
UPDATE - 5/28/16 - Despite our best efforts, AB 2339 was HELD in the Appropriations Committee, effectively killing the bill this session. Thank you to everyone who took the time to call and voice their support for the bill. Special thanks to Frank Andorka who created a podcast in support of the bill, all the way from Cleveland! We lost this battle, but the fight continues.
UPDATE - 5/26/16 - We passed the Assembly Utilities Committee on a 10-2 vote, but right now we are stuck in the Assembly Appropriations Committee, chaired by San Diego Democrat Lorena Gonzalez. The decision of whether to allow AB 2339 to advance to the Assembly Floor rests in the hands of two people: Chair Gonzalez and Speaker Rendon. Please take a moment to give them a call and urge them to support the bill. Here are their numbers:
Back in February we wrote about the new Net Metering 2.0 rules that the California Public Utilities Commission (CPUC) approved over the objections of the Investor-Owned Utilities (IOUs), SCE, PG&E, and SDG&E.
We noted at the time that the CPUC rulemaking did not directly affect the Municipal Utilities (munis, like Pasadena Water and Power). Boy was that right as muni after muni is looking to shut down Net Metering altogether! Here’s our take, and more importantly, an action item that you can take to preserve Net Metering with the munis.
The munis are generally free, within the limits of state law, to set their own policies as confirmed by the local city council. So here in Pasadena, PWP sets its policy but has to have that policy ratified by the city council’s vote. When it comes to Net Metering, state law requires that the munis, like the IOUs, offer Net Metering agreements until the amount of solar deployed exceeds “5% of the electric utility’s aggregate customer peak demand.” (CA Public Utilities Code § 2827) Now if that quote seems like less than a model of clarity, you are quite right. Before the CPUC, the IOUs argued that it meant that you look at a utility’s highest peak demand as of a certain point in time, and that would be the cap. Such an interpretation, however, reads the words “aggregate customer” out of the statute. The CPUC agreed, and the proper interpretation requires the utility to sum the aggregate demand from each customer and that becomes the cap.
The results are dramatic - the proper interpretation effectively doubles the total amount of solar allowed under the cap. That decision by the CPUC back in 2012 redefined Net Metering, but only for the IOUs. At the time there was little concern regarding the munis since none was close to reaching their cap.
Fast forward to today and five munis have already reached their caps, as calculated under the old, pre-CPUC ruling, methodology. That leaves them free to replace Net Metering with whatever they choose, and at least one, Turlock, has adopted new rules that have resulted in an 85% decline in the solar market there! (In contrast, LADWP has already agreed to the new methodology thanks to leadership from Mayor Garcetti.)
Fortunately there is a fix in the works. AB 2339 (Irwin - D-44) will require that the munis calculate their caps in effectively the same way as the IOUs. The bill is presently in the Assembly Committee on Utilities and Commerce, chaired by Mike Gatto (D-43) - a former student and colleague of mine, and a champion of clean energy.
We need the strongest bill possible coming out of the committee, and you can help make that happen. How? Our friends at CALSEIA have compiled a target list of key assembly members who need to here from their constituents on this bill. From the CALSEIA newsflash:
- Jim Patterson (R-Fresno/Clovis) 916-319-2023
- Susan Eggman (D-Stockton/Mountain House/Thornton/Tracy) 916-319-2013
- Mike Gatto (D-Burbank/Glendale/La Canada/La Crescenta) 916-319-2043
- Bill Quirk (D-Hayward/Ashland/Castro Valley/Cherryland/Fairview/ Fremont/ Pleasanton/San Lorenzo/Sunol/Union City) 916- 319-2020
- Miguel Santiago (D-Huntington Park/Vernon) 916- 319-2053
- Eduardo Garcia (D-Imperial/Blythe/Brawley/Calexico/Cathedral City/Coachella/Desert H.Springs/El Centro/Indio) 916- 319-2056
- Christina Garcia (D-LA/Bell Gardens/Bellflower/Cerritos/Commerce/ Downey/Montebello/Pico Rivera) 916- 319-2058
- David Hadley (R-Torrance/Gardena/Lomita/Manhattan Beach/Palos Verdes Estates/Redondo Beach/West Carson) 916- 319-2066
- Phil Ting (D-San Francisco) (916) 319-2019
- Rocky Chavez (R-Oceanside/Calsbad/Encinitas/Vista) (916) 319-2076
If you live in one of those districts, or if you run a business in one, or have customers there, please contact that member.
More generally, there is a website where anyone can go to express their support for expanding the benefits of Net Metering to muni customers throughout the State. Just click on the button to make this happen:
Sadly, the list of entities opposing this bill includes Pasadena Water and Power - looks like we need some political leadership here in our own backyard to get PWP on board.
We will update this post as the bill progresses through the legislature - watch this space!
Last week LADWP responded to its critics by announcing major changes in how its solar program works. In a widely distributed press release, LADWP said its actions were “aimed at reducing delays, streamlining the program, and increasing transparency." Or in other words, providing participants with some hope that one of the most difficult jurisdictions in which to install solar might finally have a chance to live up to its potential. Here’s our take.
There can be no doubt that LADWP is in serious need of improving how its solar program works. Indeed, earlier this month we wrote a piece about Why “Soft Costs” are so Hard (particularly in LADWP territory) and in January we wrote in LA: Where Good News goes to Die, how the LA Department of Building and Safety insisted upon adding their own, entirely redundant, testing regime on new solar products, thereby delaying their introduction in the City, even though those products were UL listed and approved for use everywhere else in the State of California by the California Energy Commission.
At the time we appealed to LA’s new major to fix this:
We suspect that the Garcetti Administration could make this go away tomorrow—so why don’t they? Given the Mayor’s claim to green cred, why not call a meeting with appropriate stakeholders: installers (including small installers), manufacturers, and department heads and lets cut through this unnecessary nonsense and make it easier to install rooftop solar in the biggest city in the biggest solar market in the country. It’s about time.
Now we have no idea whether anyone at LA City Hall reads this blog, and we are certainly not the only folks who have been speaking out about the problems in LA, but last week’s announcement does appear to have picked up on these themes. Here’s how LADWP’s new General Manager framed the issue:
“We recognize that our solar customers have become frustrated with longer than normal response times and the challenges of navigating through the application, review, inspection and rebate processes to receive the incentives and turn on their solar systems,” said LADWP General Manager Marcie Edwards. “We want to make it easier for customers to go solar so they can benefit from the city’s abundant sunshine by controlling a portion of their electricity costs, while helping to green the grid.”
To which we say, bravo, but the devil is in the details.
So what exactly is LADWP promising to do? Quite a bit, apparently, including (from the press release):
- Doubling the number of staff to expedite processing applications and issuing rebate checks.
- Hiring new staff members on a permanent basis to improve response times to hotline calls
- Streamlining the lease application review process
These are all good steps, but if folks who are brought in to review applications don’t understand what they are reviewing, then simply having more bodies will not improve the process. Maybe DWP could bring some actual installers into the training process. Why not pay them to sit down with your new hires and go over the materials being submitted via PowerClerk so that there could be a better understanding of what those materials mean? I’m guessing you could get some volunteers to assist with this process, for a price, and that would improve things for everyone.
In any event, to help increase the transparency of these efforts, DWP is also creating what they are calling “two Mayor’s Dashboards to keep customers informed of the progress and improvements” to the program. These dashboards are to be updated weekly—here is a portion of the dashboard as of March 24:
This shows that the delay in getting a rebate reservation reviewed is presently two months or 56 days—which would in and of itself be a significant improvement on the 78 days we recently endured. By the end of April, DWP is hoping to shave another week off of that and by the end of May to have cut it all the way down to just three weeks, which would bring DWP in line with its neighbors in SCE territory.
Unfortunately for those unhappy customers awaiting a rebate, your delays will get worse before they get better, with payments taking a full quarter of a year by the end of April. Ouch.
The announcement was not confined to just improvements at LADWP, apparently Building and Safety is also getting into the act. Again, from the press release:
Concurrently with efforts being made at LADWP, the solar permitting process at the Department of Building and Safety is being streamlined and simplified, with the vast majority of residential permits soon to be available online and additional training of field inspectors to deliver consistent and timely customer service.
These efforts are expected to save solar installers – and their customers – hundreds of dollars on solar PV systems by reducing trips to DBS for simple permits and ensuring that inspection issues are dealt with promptly. As this streamlining process moves forward, DBS will work with industry stakeholders to continuously deal with the introduction of new technologies in this rapidly evolving sector.
Heavens, be still my heart! Who knows, perhaps someday soon we will be able to skip the whole, “LA has to test everything itself just because it can,” phase and be allowed to deploy best-in-class technology as those products become available on the CEC list—just like we now can in every other jurisdiction. (Along those lines we have heard that the Enphase M250 has been approved and that the final certification should issue shortly. Finally.)
All and all, these are very encouraging noises coming from the City of Angels, and we can only hope at this stage that positive changes will match the promising rhetoric. We will be waiting to see… watch this space.
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.
The Feed-in Tariff (FiT) program for LADWP has been up and running for nearly a year with the first two tranches in the books. Which raises the question: how have those proposals that were accepted, performed? Here’s our first take…
LADWP quietly posted some update statistics about its program the week before Christmas and we stumbled upon it while looking for information about the timing for the Third Trache (presumably set for later this month, although the DWP website simply says that launch info is “coming soon").
The FiT data comes in the form of an Excel spreadsheet, without supporting documentation, which leaves it open to interpretation.
Collectively, the data reports on 256 total projects, 136 from the first tranche and 120 from the second. Interestingly, the data only records three different status values for these projects: Cancelled, In-Progress and Waiting - there is no category in the data for “Completed".
From the first tranche, out of that total of 136 projects, 20 have been cancelled (14.7%), 45 are in-progress (33%) and 71 - over 52% - are listed as “waiting", though the data does not identify upon whom or what the projects have stalled. The data is somewhat more encouraging for the second tranche with only 1 project cancelled so far (0.8%), 64 are in-progress (53.3%) and 55 are waiting (45.8%). This trend suggests that as projects age they are more likely to either be cancelled or end up waiting on something.
The data tracks four milestone dates post lottery selection: Technical Screening Completed, Interconnection Study Completed, Customer Executed Contracts Received, and SOPPA Execution Date. Curiously, for the projects with a status of “waiting", not a single one of those dates is indicated. As it is hard to fathom how 110 out of 256 projects haven’t even passed the technical screening stage, we conclude that the “waiting” status is unreliable and needs to be corrected by DWP.
Turning to the cancelled projects, all but 3 of them reflect passing of the technical screening, and 15 of the 21 have completed interconnection studies. Since it is at that stage that you would expect a project to be dropped if the interconnection cost has turned out to be prohibitively expensive, it is not surprising that only seven got to the point of submitting their contracts. However, DWP had not executed any of those contracts according to the data. Which means that seven projects got so far as to submit binding contracts before dropping out.
Which leaves the category of “in-progress” projects. Out of a total of 109 so designated projects, only three have executed contracts from DWP, and all three of those were executed on September 13, 2013. This makes for a pretty dramatic winnowing process:
109 start -> 89 pass screening ->31 complete interconnection study -> 20 submit contracts -> 3 have those contracts executed, nearly a year after the process began (all of those with executed contracts came from last February’s first tranche).
Unfortunately, the data does not reveal why we are looking at such a dismal success rate one year on. Perhaps things would look different if the “waiting” segment were more revealing, but it is not.
Here’s hoping that 2014 will provide both greater success in getting projects over the finish line, as well as greater clarity in the process.
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