Thoughts on Solar by Run on Sun's Founder & CEO, Jim Jenal

Community solar - which would allow folks without usable roof space of their own to go solar - has been revived in Sacramento and is now moving through the sausage factory that is the State Legislature. If the solar industry cares to see it emerge intact, the time is now to get on board!

We wrote last year about the failed struggle to pass SB 843, the community solar bill which died under attack from the utilities.  Now the coalition that pushed last year for that legislation is back with two new bills: SB 43 (Wolk) and AB 1014 (Williams).  From the bill summaries:

While rooftop solar is a strong and growing business in California, at least 75% of households cannot participate because: (1) they are renters and don’t own their roofs (44% of households); (2) they do not have strong enough credit ratings to finance the installation (28-31% of households); or (3) their roof is too small or doesn’t receive enough sunlight (no estimate available). In addition, most businesses rent or lease their facilities and do not own their own roofs.

A Shared Renewables program allows all these California households and businesses to voluntarily subscribe to up to 100% renewable power from a shared facility in their utility’s territory and receive a credit on their current utility bill. SB 43 and AB 1014 are not limited to solar but rather apply to any new renewable facility up to 20 megawatts (MW) in size, for a program total of 500 MW (or 1000 MW in AB 1014).

While the technologies eligible under the Shared Renewables program are the same as those eligible under the Renewable Portfolio Standard, the resulting Renewable Energy Credits are given to the subscribers and retired for them. Projects accepted into other concurrent programs, such as the Reverse Auction Mechanism, the ReMAT Feed In Tariff, or utility-owned solar programs, are not eligible for the program. Finally, the bill asks publicly-owned utilities to consider implementing a similar program.

While we have some concerns about the present form of the legislation - particularly in that there doesn’t appear to be any carve outs to support smaller projects and smaller companies - the intent is important for broadening the base of solar customers in California.

That’s where you come in.  Our friends over at Vote Solar have a sign-up campaign ongoing - you can participate by clicking here - and they need your support.  If you are in the solar industry - and we know lots of you read this blog - it is imperative that you get behind this legislation.  If you are a renter or a homeowner with a heavily shaded roof, this legislation is your chance to vote with your pocketbook for a cleaner, sustainable future.  So please, take a moment and add your voice to the call for community solar - this time with Gusto!

Who is this woman and
why is she attacking solar?

In case you had any doubts, the attack on the underpinnings of the solar industry - net metering - has begun in earnest as evidenced by this Declaration of War from PG&E’s “Chief Customer Officer,” Helen Burt. The only question now is, how will the industry respond?

In a recent post on the PG&E website, Ms. Burt continues the populist attack on solar, claiming that solar customers who use net metering (essentially every residential solar customer and all but the very largest commercial customers) are not paying “their fair share.”

Here’s her take:

When customers install solar and use Net Energy Metering, they avoid paying their fair share of the electricity grid they use at night and of various programs that further California’s environmental and social policies. Remaining utility customers pay for the fixed costs of the electricity grid and other programs, driving their rates higher.

Frankly, this is simply nonsense.  All customers, including those who install solar and use net metering, are billed the same way to cover the costs mentioned by Ms. Burt.  But here’s the thing, the amount of that payment is tied to energy usage - the more kilowatt-hours you consume in a billing period, the more you pay for grid maintenance. Is that the proper way to cover the cost of fixed assets?  Perhaps not, but one thing is for sure, it wasn’t the solar customers who designed PG&E’s rate structure.

So guess what?  If you invest in LED bulbs for your home or a more efficient HVAC system on your commercial building, you will lower the amount of energy you consume - and hence you will lower the amount you contribute to covering these same costs.  Is that also unfair?

As we reported at the time, the California Public Utilities Commission (CPUC) is performing a study now to try and assess the true cost-benefit equation from solar net metering and recently the folks at Vote Solar commissioned their own study which found a net benefit to all ratepayers - including those who do not install solar.  Ms. Burt dismisses those results as “predictable” - that is biased - without ever bothering to point out that the state’s public utilities, including PG&E, had previously released their own study, with just as “predictable” results.

Regardless of how the CPUC’s study turns out, Ms. Burt makes clear that PG&E is going to continue their assault on solar: “PG&E is working with the CPUC and Legislature to find solutions for customer solar installations that mitigate or eliminate these cross-subsidies from nonsolar customers to others."  Translation? “We intend to do everything in our power - using ratepayers’ money - to eliminate net metering!”

In PG&E’s view, they should receive any excess energy production from solar customers - which they immediately sell to the solar customer’s neighbors at full retail rates - for free.  Nice deal if you can get it - but is that fair?

Of course at bottom is the simple truth that solar installations are increasing throughout California and utilities like PG&E know that as solar costs come down, they are going to start losing more and more revenue.  Since distributed generation reduces their peak load, they have less and less justification to build more generation capacity, which is the basis for their guaranteed returns.  In a world where many more utility customers can afford to install solar, this is simply not a sustainable business model.  So PG&E is doing what every dying industry does - attacking the “fairness” of the competitor that is eroding their bottom line.

It will be up to the CPUC, the Legislature - and ultimately the solar industry - to see that the faux populism of utilities like PG&E is unmasked for what it is - naked self-interest.

We have written before about the types of companies that choose to install solar and we featured the specific strides that IKEA is making toward energy independence. But now comes a report from the Solar Energy Industry Association (SEIA) and Vote Solar that shows that when it comes to saving money, solar really does mean business!

As the above chart shows, these twenty companies have installed more than 700 solar power systems with a combined total capacity of 279 MW, or enough to power more than 46,000 typical American households!  Retail giant Walmart leads the way with 65 MW of installed capacity, followed by Costco, Kohl’s, IKEA and Macy’s.

Indeed, the report shows that IKEA has installed solar at 79% of its stores, exceeding by mid-2012 the goal that it had set for 2015!

What is motivating these companies to adopt solar at such an impressive - and accelerating - pace?  Well, it certainly isn’t green-eyed environmentalism nearly as much as it is far-sighted economics.  These companies have figured out that solar power systems are a great money maker - with paybacks occurring in 4-7 years and decades of savings thereafter.

The good news is that your company doesn’t have to be a giant in the field to save money like one.  Commercial solar is simply the smartest investment any company could make, and when combined with PACE financing (at least here in Los Angeles County) you can have all of the benefits of commercial solar with next to nothing out-of-pocket.

So what are you waiting for?  Give us a call or click on that giant “Go Solar Now” button on the right to get you started on the road to some major savings!

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.

UPDATE: The bill was indeed introduced as planned, it is H.R. 2599.  You can follow its progress via OpenCongress here.

After having been left for dead by federal regulators, PACE - Property Assessed Clean Energy funding for solar power and energy efficiency projects - is making a comeback thanks to bipartisan (Yes!) legislation gaining momentum in the House.  You can help get this important legislation passed by contacting your representative - details after the jump.

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