The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area. (You can read more detail about all of these incentives on our Solar Financing page.)
Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit. Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019.
The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you. (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.) For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility. Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.
Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions. We have rank ordered the local utilities below, based on the reliability of their rebate program.
The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power. Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.
As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit). Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system. Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.
LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.
That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits. Just don’t hold your breath.
These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.
Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year. Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.
Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15. In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.
Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.
We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.
The “Solar Partnership Program” in Azusa is fully subscribed. There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.
The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.
SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated. Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!
We all know that solar is booming throughout the U.S. and especially here in California, but where in California exactly? What county leads the state in permitting new solar projects? Take a guess—the winner may surprise you!
We recently came across a publication that attempts to compile information regarding building permits throughout the State of California. The data reports the total number of permits issued by county and gives a valuation for those permits. However, since the value assigned to a project at the permit office is generally not verified against the actual price of the project, we aren’t looking at that data. Instead, we simply focused on the total number of permits issued in March of 2014 for new, solar PV installations.
Go on, take a guess…
Did you see that coming? We certainly didn’t!
Wow, San Bernardino you are kicking it, and in a big way, accounting for nearly 12% of the 3,901 new PV permits pulled statewide in March. The top ten counties listed here combined for 65% of all permits for the month. Solar hotspots indeed.
Still, I suspect it tells you something about the continuing horrors of doing business in the City of the Angels, when Los Angeles county, with five times the population of San Bernardino county, has roughly half as many permits in the month.
It will be interesting to follow this data going forward to see whether this month was a fluke or a continuing trend.
Yesterday we provided a recap of the results from the third tranche of LADWP’s Feed-in Tariff (FiT). Today we are going to look at the status of the program overall, based on the newly instituted FiT Dashboard found on DWP’s FiT website.
We are often critical of issues with utilities, whether its undue roadblocks to installing solar or outright hostility to the entire concept of net metering. So it is equally important to give credit where it is due, and the introduction of the solar “Dashboards” that are now featured at the DWP website is a great step forward in transparency and one that deserves to be widely imitated by DWP’s peers. Here is how DWP explains the purpose of their FiT Dashboard:
LADWP is implementing the largest FiT program of any municipal utility in the nation. As it goes through growing pains, we continually work to improve the experience of customers and businesses who participate in it. The goal is to achieve the target level of solar energy, catalyze the solar industry and create jobs, and streamline the process to increase efficiency. This Dashboard outlines the issues, actions taken, and plans for improvement. The graphs show the current and targeted FiT processing timelines, schedule, and status of projects from each allocation.
The data discussed below is from the Dashboard update as of April 7, 2014.
While the complete flow chart for LA’s FiT program is more than a shade Byzantine, the Dashboard highlights processing times associated with three key bottlenecks in that flow: the initial Technical Screening that takes place when a project application is first submitted, the interconnection study which determines the cost for the proposed project to tie into DWP’s grid, and contract execution for the PPA between the project developer and DWP. For each of these milestones, DWP has a goal of completing the work in four weeks. In each case, DWP is missing those targets by a lot.
As of this writing, DWP is taking, on average, 6 weeks to complete the initial technical screening, 12 weeks (3x the goal) to complete the interconnection study and 14 weeks (3.5x the goal) to execute the contract! Unfortunately, the Dashboard does not reveal how much of that delay reflects internal DWP processing times versus delays caused by the developer—breaking these delays down to reveal how that works out would be an important modification to the Dashboard.
While we can understand how incomplete applications and general, technical complexity could add delays to the first two milestones, we are baffled by the 14 weeks of delay in executing the contracts. These are standard form contracts which, at least according to the program guidelines, are not subject to negotiation. What could possibly cause a three-and-a-half month delay in getting those contracts signed? Alas, the Dashboard does not reveal an answer to that question.
Which brings us to the status of all project applications in the queue. Here’s DWP’s chart (click for larger):
The chart shows all 22 applications from the third tranche in the initial technical review as would be expected. Shockingly, there are still 13 projects from the first tranche, over a year ago, that are still hung-up in that initial review!
Missing from this chart is the number of projects that are designated as cancelled. By our count, there are 47 projects that made it through the lottery but have been cancelled for whatever reason. (The most likely reason would be due to learning that the cost to interconnect to DWP’s grid—the major wild card in the whole process—turned out to be too expensive. However, according to the data, only 21 of those 47 projects ever had the interconnection study completed, which means the majority of the cancellations had to be due to other, unreported, reasons.)
Seven projects from the first tranche are still waiting for the interconnection study to complete along with 37 from the second tranche. Thirty-four projects, 17 each from the first two tranches, are undergoing the mysterious contract review process. Only 9 projects have managed to get contracts executed and just two, both from the first tranche, have been commissioned. (The blue bars represent projects from the demonstration phase.)
That’s a lot of solar in the pipeline—hopefully DWP can get the cancellation rate down and the completion rate up in the coming months.
Again to its credit, the Dashboard acknowledges that the program’s overall status is: “Needs Improvement” and steps are underway to improve the process. Perhaps the most significant development is that DWP has assigned seven additional engineers to help work through this backlog. But the Dashboard makes clear that to get to target goals, DWP needs to climb a very steep hill: “To achieve target turn-around schedule, staff must complete 10 interconnection studies per week over the next 7 weeks and 10 contracts per week over the next 10 weeks.”
Bottom line - DWP is working on a big and complex program and the performance to date has been less than desired, but the institutional attitude seems better than expected. Hopefully DWP will be able to deliver on its targets in the next 10 weeks.
Of course, DWP looks positively stellar compared to the FiT performance of its neighbors, a topic we will return to tomorrow.
There are multiple Feed-in Tariff (FiT) programs in the Run on Sun service area, although only one is actually doing anything. We decided it was time to check back in on these programs and to see if any of them are living up to their mandate to actually get solar installed in the L.A. Basin.
As of this writing, there are FiT programs hosted by four cities: Anaheim, Glendale, Los Angeles and Riverside. In this post we will check-in with Los Angeles and revisit the status of the other three later in the week.
Los Angeles brags that it has the largest FiT program in the country and that assertion is true, as far as it goes. We have written extensively about the LA FiT in the past, documenting how it came about and how it has recently survived challenges from the Rate Payer Advocate who insisted upon comparing energy costs from utility-scale projects with the “in-city” projects called for by the legislation that mandated the program.
LA’s program has a 100 MW capacity goal and it divides that total into five, 20 MW allocations, or tranches, each to be offered roughly six months apart. The first tranche was to be offered at a base price for energy (BPE) of 17¢/kWh, with each subsequent tranche offered for a penny less than its predecessor. So far, three tranches have been made available, the latest just last month. As we have reported on both of the earlier two tranches (first tranche here and second tranche here), we will focus this post on the third tranche and overall program status.
The third tranche, after some delays due to City Council concerns, opened on March 17. The LADWP FiT website provides a PDF file of their spreadsheet showing the results of the tranche lottery, but unfortunately the underlying spreadsheet is not provided. This means that the PDF has to be converted back to a spreadsheet before any real work can commence, an unnecessary waste of effort.
Hey, LADWP listen up: if you are going to publish data, publish the spreadsheet, not just a PDF. (Thanks, I feel better now.)
Up until now the sense was that in order to have a shot you needed to submit your application as early in the five-day window as possible but these results belie that notion. While the window went up on March 17, none of the 45 applications submitted came in on the first day! The earliest application came in on the 18th at 11:53 (and, despite landing lottery number 21, missed the allocation cut-off) whereas the last application came in on the 21st at 3:46. Interestingly, the last twelve applications received all got that same time stamp, which means that despite their best efforts to the contrary, one quarter of all applications received were received at the last possible minute—and four of those twelve made the cut. More on this in a minute.
The 20 MW of capacity in the tranche are not just one big pool. Rather, 4 MW are set aside for “small” projects (i.e., capacity between 30 and 150 kW) and the remaining 16 MW to “large” projects (150 kW to 3 MW). So does size matter in terms of the likelihood of success? It certainly does—all four small projects made the cut, whereas only 19 out of 41 large projects did. Of the small category projects, two were right up against the size limit (145 and 149 kW, respectively), while the other two were much smaller: 79 and 37 kW. Frankly, in light of the relatively low payment in this tranche—a situation that will only get worse as the BPE declines in subsequent tranches—it will become harder and harder for small projects to pencil out. Given how badly the small category underperformed in this tranche—barely reaching 10% of the 4 MW capacity set aside—LADWP should re-think its approach here. If it is serious about maintaining a small projects category, it needs to increase the BPE for such projects. Otherwise it needs to revise its rules so that the excess allocation in the small category can be used by large projects that otherwise would not make the cut.
The large category is particularly interesting from the sense of who is playing. The 41 projects in the large category came from only 19 different sources, and the biggest player of all is none other than the City of Los Angeles itself! Here’s the list:
Twelve of the nineteen large project applicants submitted only one project, three submitted two projects, one submitted three, two submitted four—and then there’s LA’s Harbor Department which submitted 12 with an average size over 1 MW each!
So how did these players fare in terms of making the cut? Well, the City only got four of its twelve projects in under the wire so one might think that their success was no more likely than anyone else. But here’s an interesting thing—remember those twelve applications that all received the same timestamp of 3:46 p.m.on the last day to apply? You guessed it, all twelve of them came from the City of LA’s Harbor Department! How curious.
The other successful players were Pasha Stevedoring (2 out of 3), OM Solar LLC (2 for 2), PLH LLC (2 of 4) and SunRay Power LLC (2 of 2).
Finally, we wanted to see where all of this solar is going and, given the success of the LA Harbor Department, not surprisingly the big winner is San Pedro, home to the Port of LA. Five projects will be located in San Pedro’s 90731 zip code for a total capacity of 4.6 MW, and one more nearby in Wilmington. The Port is about to become something of a solar center in Los Angeles—a welcome departure from its past reputation as a toxic hot spot. Here’s the map:
There’s more to say about the state of LA’s FiT, so we will save that for tomorrow, including a look at their new dashboard that seeks to provide greater transparency into how the overall program is doing.
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.