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!
A client of ours noted that Pasadena Water and Power (PWP) offers, in addition to its regular, Residential tiered rate structure, the option to switch to a Time-of-Use rate structure, and he asked if he would derive additional savings from making that switch. Turns out that is not an easy question to answer, and there certainly isn’t a “one size fits all” result. We decided to take a closer look into these rates both for PWP and for the folks in Southern California Edison (SCE) territory.
SPOILER ALERT - The following is pretty much down in the weeds. You have been warned!
Let’s start by defining our terms. Most residential electric customers, of both PWP and SCE, are on a tiered rate structure. That means that there are two or more cost steps - called tiers - for the energy that you use. Tiered rates assume that there is some minimally expensive charge for the first allocation of energy per billing cycle, and that as you use more energy your cost for energy increases. For example, SCE’s Domestic rate has three tiers and in the first tier the charge is 8.8¢/kWh, in the second tier the charge is 16¢/kWh, but the final tier is 22.4¢/kWh! (There is also a non-tiered component that adds another 6.9¢/kWh to the customer’s bill.)
PWP, on the other hand, has a somewhat perverse tier structure in that the lowest tier is very cheap, 1.7¢/kWh, the second tier is significantly higher, 13.5¢/kWh, but the final tier actually goes down to just 9.9¢/kWh! Since the whole point of tiered rates is to provide an incentive for heavy users to reduce their usage, PWP is actually rewarding those who consume more than 25 kWh per day with lower rates! Very odd.
Time-of-use rates, on the other hand, are generally not tiered. Instead, the day is broken up into segments and the cost of energy varies depending on the segment in which it is consumed. PWP refers to these segments as “On-Peak” (from 3-8 p.m.) and “Off-Peak” (all other hours). But PWP’s TOU rate retains the tiered element as well, making it a truly odd hybrid rate structure.
SCE’s approach is more involved, dividing the day into three, more complicated segments: “On-Peak” (2-8 p.m. weekdays - holidays excluded), “Super Off-Peak” (10 p.m. to 8 a.m. everyday), and “Off-Peak” (all other hours).
For both PWP and SCE there is a seasonal overlay on these rates, with energy costs increasing in the summer months (defined as June 1 through September 30).
(It is important to note that both PWP’s and SCE’s TOU rates put the most expensive energy in the late afternoon to evening time period - pricing energy to offset against the “head of the duck.” Ultimately, these rates will create the energy storage market in California, but that is a post for another day.
Assuming that one can create a spreadsheet to model these different rates (not a small task in and of itself!) there is one more hangup - data. Both PWP and SCE report total monthly usage to customers on their tiered rate plans - but in order to analyze your potential bill under a TOU rate, you must have hourly usage data for every day of the year! (Because there are 8,760 hours in a [non-leap] year, such a usage data collection is typically referred to as an 8760 file.)
The standard meters that PWP has installed simply do not record that data, so the average PWP customer has no way to know whether they would save money by making the switch.
On the other hand, most SCE customers do have access to that data and they can download it from SCE’s website.
After you create an account, login to it and go the “My Account” page. On the left-hand-side you will see some options - click on “My Green Button Data” (the too cute by half name for the interval data you are seeking), select the data range for the past twelve months, set the download format to “csv” and check the account from which to download. Then press the “download” button and cross your fingers - in our experience, the SCE website fails about as often as it actually produces the data that you are seeking!
Given that PWP doesn’t have data available, is there any way to estimate what the results might be? The answer is, sort of. We took an 8760 data set from an SCE customer and used that as our test data for both PWP and SCE. (The data file does not identify the customer.) Since the data file has an entry for every hour of every day, we can segment the usage against the On-Peak and Off-Peak hours, and using a pivot table - probably the most powerful took in Excel - we can summarize those values over the course of the year, as you see in Figure 1.
Figure 1 - Usage Profile for PWP
Summer months are highlighted in orange. For this specific energy usage profile, Off-Peak usage is more than twice that of the On-Peak usage (9,806 to 4,009 kWh respectively). So how does that work out when we apply the two different rate structures? The table in Figure 2 shows the details of the two rates:
Figure 2 - PWP Rates - Standard Residential and TOU
Under both rate plans, the distribution is tiered (with the perverse reverse incentive for usage above 750 kWh). Added to that is either the seasonally adjusted flat rate for energy, or the seasonally adjusted TOU energy charge.
Applying those rates to the Usage Profile in Figure 1 allows us to see what the energy and distribution components would be under both approaches. Given the hybrid nature of these rates, you might expect them to be similar and you would be correct. The distribution charge - which applies to both - comes to $1,180 for the year. The flat rate energy charge comes to $893, whereas the TOU charge is $985. Meaning that someone electing to use the TOU rate would have a yearly total of $2,165, whereas the flat rate user would have a total bill of $2,074, making the TOU rate - for this specific energy profile - 4% higher.
Beyond that, PWP has a number of other charges - such as a public benefit charge, an underground surtax, and a transmission charge - that are only tied to total usage, so the ultimate difference between these two rates is even smaller.
SCE rate structures are significantly more complicated that PWP’s. For example, the tier 1 (aka baseline) allocation varies by location. Since SCE covers such a huge and diverse area from cool coastal regions to absolute deserts, customers are allocated more energy per day in their baseline depending upon where they live. In the area around Pasadena that is covered by SCE, a typical daily baseline allowance would be 13.3 kWh in the summer and 10.8 kWh in the non-summer months. The baseline then is that number times the number of days in the billing cycle. Tier 2 applies to every kWh above baseline, but below 200% of baseline. Tier 3 applies to everything beyond that. As with PWP, the tiered rate only applies to “delivery” charges. The energy generation charges are the same all year. Here’s what that rate structure looks like:
Figure 3 - SCE’s Tiered Domestic Rate
The first thing that you notice when you look at this rate is how much higher it is than the rates from PWP, and the end calculation bears that out - the same usage that resulted in an annual bill of $2,074 in Pasadena becomes $3,227 once you cross the border into Altadena, South Pasadena, San Marino, or Sierra Madre - an increase of 56%! (There’s a reason why a growing percentage of our clients are coming from those surrounding, SCE-territory communities!)
So what would happen if this beleaguered client were to shift to a TOU rate? First, we need to re-parse the usage data according to SCE’s more complicated segmentation scheme, which gives us Figure 4:
Figure 4 - SCE’s Segmented Usage Data
Once again, the On-Peak usage is the smallest category of the three, amounting to just 23% of total usage, compared to 42% in Off-Peak, and 35% in Super Off-Peak.
Of course, SCE can’t do anything in a simple fashion, so they have not one but two basic approaches to their TOU rates, Option A and Option B. Option A rates run from a low of 13¢/kWh (in summer Super Off-Peak), to 29¢/kWh (during summer Off-Peak) to an eye-popping 44¢/kWh (during summer On-Peak). However, Option A includes a credit of 9.9¢/kWh on the first baseline worth of energy which reduces the monthly bill by roughly $30.
Option B deletes that baseline credit and replaces it with a “meter charge” (even though it is the same meter!) of 53.8¢/kWh/day, or roughly $17/month. In return, the On-Peak charges are significantly reduced from 44¢/kWh to just 32¢/kWh.
So how does this shake out? The results are quite surprising, as shown in Figure 5.
Figure 5 - SCE Rate Structure Comparison
The two left columns show the month-by-month calculations for both delivery (the tiered component) and generation (the flat component). The two right columns show the month-by-month calculations for the two different TOU rates.
The bottom line is striking: under TOU-A there is a savings of 5% over the tiered rate, whereas the savings jump to 19% by going to TOU-B! That is a savings of $600/year just by changing rate plans - a switch that any SCE customer can make.
MAYOR CAVEAT: YOUR MILEAGE WILL VARY!
The results displayed here are entirely dependent on your actual energy usage and no two usage profiles are alike. It is possible, even likely, that some usage profiles will see an increase in bills under either TOU option.
The good news is, that for a nominal fee, this is an analysis that we could do for any SCE residential customer - we would just need access to your usage data.
So that completes our pre-solar analysis. In our next post, we will look at how these results change when you add a solar power system into the mix.
Pasadena is not only the home for Run on Sun, it is also my home for many years now. Pasadena likes to think of itself as a forward looking, environmentally conscious city. So it was a bit of a blow to see the latest Power Content Label for our home-grown utility, Pasadena Water and Power (PWP), which reveals that when it comes to powering this city sustainably, we still have a long way to go!
Under California law, (Senate Bill 1305, Sher, Statutes of 1997), electricity retail suppliers are “required to disclose to consumers which types of resources are used to generate electricity being sold." October 1 is the deadline for utilities to report this info to the California Energy Commission, and they are then required to disclose it to their customers by way of a flier included in the bill. The disclosure is known as a Power Content Label and it breaks down energy sold by source and compares it to the overall mix in the state.
Here is PWP’s PCL for 2015:
|ENERGY RESOURCES||2015 PWP POWER MIX||2015 CA POWER MIX|
|Biomass & waste||15%||3%|
| Large Hydro
| Natural Gas
Wow, that’s a lot of fossil fuels, with the majority of it coal. Contrast that with the rest of the state where coal is roughly 1/6 of the factor that it is at PWP, and keep in mind that you produce 2.1 pounds of CO2 per kWh when burning coal (on average) compared to just 1.2 pounds from burning natural gas.
Worse still, solar makes up 0% of PWP’s overall mix, compared to 6% for the state overall.
If there is a silver lining in these numbers it is this: 2015 is an improvement over the past. As recently as 2013, coal was a whopping 52% of PWP’s total power. So our hometown utility is getting better, but we are a long way from where we need to be!
(*Unspecified means “electricity from transactions that are not traceable to specific generation sources.")
Every September we pack our bags and head to the largest solar conference and exposition in the country; Solar Power International. This is when we get to connect with the broader solar community, advocates, and friends working far and wide for the betterment of the world through distributed clean energy. It is also the time when manufacturers unveil their latest technologies. These technology improvements come fast and furious in an attempt to stay ahead of the curve in a competitive industry. Just two years ago when I started working with Run on Sun we were able to get 270 watt panels from LG. What is coming from them in the next year will blow your mind. Here is my run down of the top take aways from SPI 2016…
Some of you may have seen the three part series Run on Sun’s CEO, Jim Jenal, wrote recently about what we need to do to be sustainable as an industry facing a crisis of increasingly shoddy workmanship and shady business practices. As part of the convention’s educational program, Jim was invited to participate on a panel of solar professionals to discuss the future of residential solar. The panel consisted of a wide range of backgrounds including a representative from a national company, Sunrun’s Michael Grasso, Rick Luna from a municipal utility CPS Energy, Ed Murray from a medium sized company, Aztec Solar, as well as national advocacy group SEIA, and Jim representing the small installer at Run on Sun.
The panelists discussed their take on who will dominate the residential solar space and what will the predominant business model be in five years. This was a perfect platform to raise the very real issues of quality facing the industry and Jim did not disappoint! Of course Sunrun’s Grasso asserted that national scale companies continuing the leasing model with storage will dominate in the future. But there were many nods of agreement in the audience when Jim insisted that the current status quo is not sustainable. Giant publicly traded national companies operating in the red and pushing customers into bad deals are going to cause a backlash. We’ve already seen many law suits and bankruptcies in the industry. Solar City’s Better Business Bureau rating in the Bay area is an embarrassing 80% negative. The notion that Ed Murray, from SEIA, put forth that the market will naturally take care of the bad companies is just not a sustainable way forward or an ethical one. As more and more consumers get hit with bad contracts and solar systems, the market will be left with a bad taste for solar. The people in this industry who are doing it for the right reasons, aiming to help people save money and reduce their impact on the ecosystem need to demand that there is more oversight over the quality of systems and some legal standards around contracts.
Jim’s comments seemed to be well received in the audience as most people attending were people who work in solar for the right reasons given they are investing in the hefty price-tag to attend the convention. But the disparate opinions on the panel itself was interesting to say the least. I don’t know if the reps for big companies are just out of touch with what is happening on the ground or if they are in denial.
Everyone agreed that a future will include storage or other bundled options for improving home efficiencies. However, Jim noted that storage needs to be presented to clients in a transparent way so they understand the true value of storage and whether it makes sense for them or not. If you are on a tiered rate system with no demand charges there likely is no value in storage. Solar stakeholders from advocates to installers need be fostering business practices that focus on transparent education for consumers instead of just closing every sell if we are to survive as an industry and continue to grow solar as the incredibly valuable resource that it is.
We have been installing exclusively LG panels since 2012. Why? We believe LG panels are the best for our clients for two main reasons. 1. As a diversified company we, and our clients, can rely upon them to stick around to back their 25 year warranty no matter what happens in the wider solar industry. And 2. LG has an incredible R&D department churning out ground-breaking improvements keeping them at the top in both quality and output year after year.
Last year LG announced 320 watt panels would be coming and we were fortunate to be one of the first to install these at a beautiful home in Altadena last Spring. This year they have several incredible new announcements:
The Enphase booth was seriously hoppin’ throughout the expo! Unsurprisingly with a total redesign of their system from the microinverter to the cable and even a special junction box.
All of these improvements come together to create a system that includes the microinverters we know and trust at a lower cost with a simpler and quicker installation.
The large majority of Run on Sun’s solar installations are being held together by the great racking products from Everest. This is because their materials are the most solid and well thought out racking product for standard pitched roofs on the market today. Their booth at SPI included a new “shared rail system” which allows two panels to come together on a single rail cutting down on the total number of rails needed for an installation. This system incorporates the same beefy product we trust with a reduced overall cost and installation time on the roof. It also doesn’t hurt that the entire team at Everest Solar Systems are great people and local to SoCal too!
Pasadena’s Idealab, an incubator, has been consulting with Jim on a revolutionary new product - the PV Booster - at their start up Edisun. They unveiled their dual axis tracker system at SPI. The system is designed for large flat roofs (and even carports) and potentially can increase output by up to 40% by tracking the sun throughout the day.
We were excited to see the system on display as they have developed quite a bit over the last six months of consulting with Jim. There was a lot of interest in the system at the show and we hope to help move their vision forward by installing some projects using their system locally here in Pasadena in the coming year.
Every year Run on Sun participates in Solar Fred’s Tweetup. It has become an event of close friends and allies. This year was a very special Tweetup as mainstays Pam Cargill and Martin Hamon got hitched in a truly extraordinary ceremony! Pam was walked down the “aisle” by a mascot Sun to the tune of “Here Comes the Sun". The ceremony included as many solar-love metaphors and quips as possible as Reverend Solar Fred officiated. Apologies for my blurry photo but it really was an event to remember. If you have pics to share with the happy couple you can share them on their dropbox here and relive the moment on Twitter with #SPIdo.
It is easy enough to cast aspersions, but it is far more valuable to offer suggestions for improvement. Having devoted 3,000 words to the former, it is time offer some thoughts on the latter.
I attended a solar workshop sponsored by our favorite distributor, BayWa r.e., and I heard the head of a solar company offer what might have been the saddest assessment of success I had ever heard. This man had built his company to become the largest player in his region, but most of the time, he said, “I wish I could go back to being just two guys and a truck." Growth is hard, and with it comes the risk of shoddy work creeping into your projects. (Indeed, one of the jobs that we highlighted in our first post was done by a company that once had a great reputation, but grew too fast and lost control of quality.)
When a company becomes too big to fulfill its obligation to provide top-quality work, it is too big.
A greater emphasis on training is one way to grow while still keeping the quality high. NABCEP is a good step in that direction, but companies need to support their employees to get the training that they need. (Of course, this says nothing about companies that are looking to rip people off - they represent an entirely different type of problem. More about dealing with them later.)
Right now the solar industry treats consumers like customers, and that’s a problem. Customers represent a transactional relationship - gas stations and fast food restaurants have customers. The customer hands over their money and gets a commodity in return - end of story. But purchasers of solar power systems are entering into a long-term relationship with the product that we are selling - quite likely the longest lived product they will ever own, short of the house itself. A relationship can only last that long when it is founded in trust, and that is the nature of a client relationship.
Recognizing that we are entering into a client relationship changes the focus from the short term transaction to the long-term process of building confidence. That means starting with absolute candor and at every step in the process enhancing the client’s trust. The solar professional owes the client three duties: a duty of candor, a duty of communication, and a fiduciary duty. The consequence of those duties is that you have to keep your client in the loop, and you must safeguard your client’s financial well-being.
How do you fulfill those duties? By communicating clearly at every step in the process, identifying and disclosing problems as they arise, and by providing comprehensive contracts and then living by that contract (i.e., keeping change orders to a minimum).
Solar companies need to provide comprehensive disclosures to their clients. At a minimum, such disclosures should include:
Such comprehensive disclosures would eliminate the scourge of “generic solar systems,” and would allow consumers to make more accurate comparisons of competing bids.
I spoke about many of these issues on a panel this week as SPI. There was a great deal of agreement among the panelists, despite our disparate backgrounds ranging from a (refreshingly progressive muni utility) to Sunrun to me. But the one comment that bothered me the most came from industry veteran and CALSEIA board member, Ed Murray. In response to my stated concern that the bad business practices documented in my first two posts in this series constituted a serious threat to the industry, Mr. Murray’s response was that “the market will take care of it, bad companies will fail and the good ones will survive, hopefully without too much of a black eye to the industry.”
If only it were that easy.
We rejected such laissez faire notions with the rise of the modern regulatory state decades ago, and to suggest that the solar industry can or should survive without additional regulatory involvement is misguided. The solar industry is far less regulated here in California than it is in many states. For example, to participate in the solar incentive program in New York solar installers must be NABCEP certified. Such a requirement here in the largest solar market in the country would go a long way toward cleaning up our act.
CALSEIA has a consumer complaint process - consumers who feel they’ve been badly treated by a solar company in California can start the process by clicking here to fill out their complaint form - but the process itself is secret, and the rest of the consuming public never learns about those complaints.
Similarly, utilities often have experience with bad solar contractors who do shoddy work, but they don’t publicize what they have learned so the public remains uneducated about the bad actors out there. That should change.
Unfortunately, that leaves us, for now, in a position where the burden remains on the potential client to do the homework needed to find a reliable contractor. NABCEP’s member list is a good resource (although made less so since you can no longer sort results by zip code), as is CALSEIA’s. State contractor’s boards - responsible for licensing contractors - are a good source to verify that the contractor is properly licensed, and to determine whether there are any outstanding complaints against them. (For California, here is a link to the “Check a License” page at the state contractors board.) Yelp, Angie’s List, and the BBB can all be helpful. But consumers must demand to be treated like the clients that they are, and reject solar companies that fail to honor that demand.
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