When you are fortunate enough to work in the Solar Industry you really should be thankful everyday. After all, we are a part of doing something wonderfully important at work, and how many people can honestly say that? We provide genuine value to our clients by bringing them clean, affordable solar energy, and we get to make our living at the same time – pretty cool!
But with the holidays upon us, starting with Thanksgiving tomorrow, we wanted to take a look back on this year and highlight some of the things for which we are especially thankful, today and all year around.
So, in no particular order, here is our list for 2015…
Of course, at the end of the day, it is all of our clients for whom we are the most thankful! From the first to the latest, from the smallest to the largest, and everyone in between - you are why we do what we do, and we never for a moment take for granted the trust you have placed in us.
May your holidays be filled with peace and joy and love!
Ask anyone who runs a small business: “What is your greatest challenge?” and they will tell you that finding the right people - and keeping them - is the key to being successful. Business owners resort to all manner of methods to try and recruit that elusive individual who will be the perfect fit, and elevate the enterprise to the next level. It is a challenging quest, to be sure.
But sometimes that particular person just falls into your lap - they seek you out, win you over with their enthusiasm, and suddenly everything has changed for the better.
One year ago today, such was my good fortune when an unexpected email landed in my inbox, introducing me to the amazing Laurel Hamilton. Having just moved to SoCal from Washington, D.C. where she had earned her Masters in Public Health, Laurel was looking for an opportunity to do something positive.
We weren’t hiring; we had not posted anything about seeking candidates for employment, but Laurel was undaunted. She had seen this blog, and decided to reach out and see what might happen.
As she wrote then:
With my background and interests in solutions to health and environmental issues, I feel pretty strongly about finding clean alternative energy sources, as well as biking as a form of transport, and supporting local agriculture, etc… among other passions and interests! I would love to get involved in the solar sector as it is growing so much and seems to me to be an important movement in the right direction for healthier communities. Not to mention it just makes sense to harness the bountiful sunshine here in SoCal. So I started looking into different solar companies in the area and Run on Sun struck me as being a really positive company that is in it for the right reasons…expanding your customer base to include non profits and electric car owners. I didn’t notice any job opportunities posted but I still wanted to offer my services… I am very organized and enjoy working with all sorts of people. If you have any need for administrative, management, communications, schlepping materials to various sites around the county, or any other support tasks I’d love to be of service.
Little did she know then where that email would take her! I think it is fair to say that we took her up on her offer in just about every way imaginable: from operating a boom lift, to designing client outreach efforts, to indeed, schlepping materials to various sites around the county - Laurel has done it all. In fact, she has been a frequent contributor to this blog, bringing her own voice and Thoughts on Solar to our readers. Along the way she has been a major factor in what has been our greatest year ever.
I know that many of the folks who read this blog have had their own personal interactions with Laurel over the course of this year - please feel free to add your thoughts in the comments.
As for me, I just knew that it was important to give thanks publicly for the unexpected gift that is Laurel Hamilton.
One of the chief economic benefits of going solar is the 30% Investment Tax Credit (the “ITC"), but it is scheduled to go away at the end of next year. Here is what you need to know now if you hope to save yourself some serious coin on your solar system.
There are three economic benefits from going solar: rebates from the utility, savings on your utility bill, and the ITC. For clients in the Run on Sun service area, only PWP and LADWP are presently offering rebates (sorry SCE folks) but at 40¢ and 30¢ per AC Watt installed, these rebates top out at roughly 10% of your cost. Monthly savings from solar will vary depending on how big a user you are and what rate structure you are under. Typically, SCE customers save more with solar because their rates are that much higher.
But the one dominant factor that has helped to make solar more affordable, particularly as rebates have gone away, is the ITC. A true tax credit (as opposed to an income deduction), the ITC is valued at 30% of the total cost of the system (less any rebate that might have been available). For example, a 5 kW solar system in SCE territory that costs $4.00/Watt will see $1.20/Watt coming back as a credit on the system owner’s taxes. (Oh, yeah, you have to own the system to capture the ITC - part of our #1 Reason to avoid a Solar Lease!) That’s a $6,000 credit - pretty sweet! And commercial clients not only get the ITC, they also get accelerated depreciation, making the tax advantages of solar even more attractive.
And yet, unless Congress acts (and really, does anyone have confidence in the ability of this Congress to do much of anything?), this will all end come December 31, 2016. (Ok, small caveat - commercial projects will continue to get 10%, but for residential clients it will be nada, nothing, zilch.)
I can hear you already saying, come on, that’s over a year away - why are you raising this issue now? Well aside from the old warning: “Caution - dates on the calendar are closer than they appear!” – it is important to understand what is likely to happen next year. Every solar company out there will start advertising about the need to “act now” only this time they will be right. As more and more people realize that they are about to leave a whole bunch of money on the table, the crush to get projects in the pipeline and completed before the deadline will mean more demands on already understaffed city building departments (many of whom routinely take six weeks or more now to approve even the simplest solar project), inspectors, and utility staff to process an unprecedented flood of applications.
As we move through next Spring, many solar companies will already be booked so completely that homeowners who are just waking up to the problem, might find themselves in a pipeline with no guarantee that their project will be completed in time to qualify for the ITC.
So what to do?
Well, for the good of the solar industry as a whole you should contact your Member of Congress and urge him/her to support the extension of the ITC. If you have friends and family who live in more conservative areas, be sure to urge them to do the same.
But as for your own solar project, the time to get started is now! Don’t be the sad-sack who gets shut out of affordable solar because they waited too long.
Levelized Cost of Energy (LCoE) — The cost of energy from a solar power system, over the lifetime of that system, measured in $/kWh. LCoE is calculated by taking the total cost of the system minus incentives but plus any equipment replacement or other maintenance expenses, and divided by the total energy produced by the system over its lifetime.
Return on Investment (ROI) – Return on Investment is a calculation that determines how soon a particular investment will be paid back (the “payback period") based on a series of anticipated cash flows, specifically, the initial expense, any maintenance expense, rebates, tax incentives, and savings from the energy produced by the solar system.
Internal Rate of Return (IRR) – A common measure of the relative value of competing investments. Technically it is the interest rate for which the present value of all of the future cash flows associated with a given project is equal to the cost of the project. The higher the IRR the more desirable the investment.
Payback – This is the time when you “break even". Meaning it is the point when the total cost of the solar system (including any maintenance costs) is paid back from savings on avoided energy purchases, rebates, and tax incentives.
Annual Solar Savings — The annual solar savings is the energy savings attributable to a solar system relative to the energy requirements of the same building without solar.
Solar Investment Tax Credit (ITC) – The ITC is a federal tax credit for solar systems commissioned on residential and commercial properties before December 31, 2016. The ITC is a dollar-for-dollar credit worth 30% of the cost of a solar power system applied to the system owner’s income taxes. The ITC will reduce to 10% for commercial and ZERO for residential solar come January 2017 unless Congress extends this deadline.
Solar Lease – A contractual agreement by which the property owner agrees to let a third party install and own a solar electrical system on your property and you pay rent for this privilege. If you’ve been paying attention at all, you are aware that this is a horrible idea. We even wrote an entire blog about why you should avoid solar leases.
Solar PPA – A power purchase agreement (PPA) is a long term contract to purchase energy from a third-party owner of a solar power system at a defined cost which may rise over time. In a PPA, the homeowner pays a fee per kWh of energy produced as opposed to a flat monthly fee in a lease agreement. Here’s the kicker, if the system produces more energy than you consume…and is going back to the grid…you get a credit from the utility for this excess energy but you also are paying for this excess energy to the third party owner of the system. Whether those fees cancel each other out or not varies.
Congratulations! You’ve passed Solar Terminology 101,102, and 103! You’re officially an expert on solar concepts! Hopefully the “Greek” terms you’ve been reading as you do your research into going solar will make a lot more sense. If you do decide solar is right for you you’ll have a better understanding of how the big electronic system you purchased and installed on your property really works. Lastly, we hope that this information will help prevent homeowners from being taken advantage of by unethical solar salesmen who really don’t know the first thing about solar! After all, knowledge is power!
Click here if you missed Solar Terminology 101: The Wonderful Magic of Electricity.
Solar Energy — Electromagnetic energy transmitted from the sun (solar radiation).
Photovoltaic (PV) – The direct conversion of light into electricity. Photo means “light”, and voltaic means “electric”.
Solar (PV) Cell — The smallest semiconductor element within a PV module which converts light (photons) into electricity. Also called a solar cell.
Solar (PV) Module — Also referred to as a solar panel, an integrated electronic device consisting of multiple Solar Cells, arranged in an interconnected grid, encapsulated against moisture and other environmental agents,and held together by a rigid frame for mounting. A typical PV module that we use is roughly 65 inches by 40 inches and contains 60 cells.
Solar (PV) Array — An interconnected collection of PV modules that function as a single electricity-producing unit. The modules are assembled with common support or mounting, common pitch and azimuth (direction).
Solar (PV) System — A complete set of components for converting sunlight into electricity by the photovoltaic process, including the array and balance of system components (e.g., switches, subpanels, etc.).
Grid-Tied - A grid-connected solar electric system generates its own electricity and feeds its excess power into the utility grid for later use. Grid-tied solar electric systems are eligible for incentives and rebates as opposed to “off-grid” systems which are not.
Net-Metering - Net metering is a billing arrangement between a solar customer and their utility which allows the solar system to send excess electricity back to the grid through the customer’s electric meter. The meter actually runs backwards! Your utility then bills you for the net (kWh used – kWh generated). While most utilities will pay you a small rate if you generate more than you use, many opt to carry forward a credit toward your next bill.
Direct current (DC) — Direct current refers to power that never changes polarity. DC power flows in one direction through the conductor. To be used for typical 120 volt or 220 volt household appliances, DC output such as from a solar panel or battery must be converted to alternating current.
Alternating current (AC) — Alternating current refers to power that constantly changes polarity between positive and negative over time. Power produced in the United States moves in current that changes polarity at a rate of 60 times per second. Electricity transmission networks use AC because voltage can be “stepped-up” to high voltage (for long-distance transmission) or “stepped-down” to low voltage (for local distribution) with relative ease. This is the current that your household devices use.
Inverter- An electronic device that converts DC power from solar modules into AC power for using in your home and feeding back to the grid.
String Inverters – A string inverter is designed to handle multiple strings of solar modules wired together in series. These are the oldest type of inverter for residential and small commercial PV systems.
Microinverters- A Microinverter (like the Enphase inverter to the right) is an inverter designed to handle small amounts of power and is paired with each solar module. They provide many advantages over string inverters such as eliminating a single point of failure, individual module monitoring, and avoiding string degradation from minor shading.
Central Inverters – These are only used to handle very large PV systems, 1 MegaWatt or more, often only in the largest utility-owned solar power systems.
Click here to continue to Solar Terminology 103: Show Me the Money!