Second only to the flame-out of oft-maligned Solyndra, the bankruptcy filing this month of once high-flying SunEdison has gotten a great deal of press, particularly by those who follow the financial side of the solar industry closely. But what does it really mean for residential, non-profit, and small commercial solar clients? In a word - nothing, and here’s why.
SunEdison, is a developer of utility-scale solar projects, that is, projects that sell energy directly to a utility rather than offsetting the energy loads of a local customer.
SunEdison Alamosa PV Plant
In recent years SunEdison expanded aggressively, creating two captive subsidiaries known as yieldcos to purchase the parent’s projects at a premium, sell the energy and pay investors dividends from those projects - thereby enticing more investors, which provided more capital to purchase more projects, thus paying more dividends and on, and on.
Until it didn’t.
Possibly the straw that broke the investors’ back, however, was the deal that SunEdison announced last July to purchase Vivint Solar at a 52% premium. To a lot of folks this seemed like an odd move - Vivint is a major player in the residential solar space where it competes against SolarCity (and us!) - not a real fit with a developer of mostly utility scale projects. That deal spooked investors, liquidity became an issue, and the Vivint deal dissolved into litigation in March.
With the demise of the Vivint deal, rumors of bankruptcy grew, culminating in its filing for Chapter 11 reorganization on April 21. The announcement - ironically one week after coal giant Peabody Energy did the same thing - generated some pretty scathing coverage:
While certainly not the level of vitriol directed at the failure of Solyndra, those are still tough headlines (and interesting articles, should you be inclined to dive deeper).
So while there is a great deal of buzz about the problems facing SunEdison, they really have nothing to do with the markets that our clients occupy. We, along with the other local, independent solar installers out there, are still doing just fine, thank you! We have never purchased products from SunEdison, so none of our product warranties are affected.
In the end, this story does highlight one consideration for potential clients to consider as you mull over the trade-offs between a smaller, local company and a large, national chain. If even the biggest firm can fail, as SunEdison has shown, so can the other giants out there. So if there is no guarantee that either the large or the small company will still be around in ten years, where would you rather place your bet: with the small company that takes the time to get the job done right, or with the giant that is bragging to its investors how it takes a day or less to install a system?
At the end of the day, size may matter, just not in the way you would originally think!
Longtime readers of this blog will know that we have been following the progress of the Solar Impulse team for many years. Headed by adventurers/pilots Bertrand Piccard and André Borschberg, the Solar Impulse project was about building an airplane that could fly around the world powered only by solar power!
The original craft, Solar Impulse 1, flew across the United States back in 2013 as a proof-of-concept design that could set the stage for the around-the-world attempt. That audacious enterprise begin in March of 2015 as Solar Impulse 2 launched from Abu Dhabi on its way around the world. Last summer, SI2 made it to Hawaii, but the effort needed for that extended non-stop flight from Japan damaged the batteries and required some redesign and retrofitting before the mission could proceed. But this Thursday, April 21, was finally the day, and SI2 departed from Hawaii, headed for a landing at Moffet Airfield outside of San Francisco - a 62 hour flight!
For those who haven’t been following the mission, since there is only one pilot on-board, he can never really sleep during the flight. Instead he takes power naps of 20 minutes at a time, assisted by self-hypnosis to quickly bring about a state of relaxation. In addition, the pilot does yoga and the limited exercises afforded by his incredibly small and cramped cabin.
But how does the plane itself - which is only powered by sunlight - manage to fly at night? By an ingenious combination of electric and potential energy storage. During the day, SI2 follows a flight profile of climbing from 5,000 to approximately 28,000 feet. Sunlight charges the batteries through a collection of more than 17,000 monocrystalline silicon solar cells. Then at night, SI2 begins a gentle descent, mostly gliding from its lofty height, to begin the process all over again.
So how did it turn out? As these great images make clear, pilot Bertrand Piccard, made it safe and sound. The revised systems performed with out a hitch, and SI2 cruised past the Golden Gate Bridge on its way to a successful landing.
Ah to have been in the San Francisco Bay area yesterday! What a beautiful and inspiring sight!
The Solar Impulse team still has a great deal of work ahead of them including crossing the United States (they will be flying into New York City which should be something!) before crossing the Atlantic as they complete their mission of showing the world the true capability of clean energy.
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!
While difficult economic times are not far removed from our collective consciousness, Californians as a whole are feeling optimistic about how things are going in the state. Generally speaking, when economic times are good, Californians are more willing to take affirmative, collective action for the common good. In particular, at times like these we expect to see concerted action on improving the environment, whether through water conservation (a big topic these days), regulating greenhouse gas emissions, or other air quality improvement measures.
So it came as a complete shock when we learned that Barry Wallerstein, the long-standing Executive Officer of the South Coast Air Quality Management District (the AQMD) - the agency responsible for providing breathable air in the Nation’s most polluted region - was unceremoniously fired from his post. What had caused his sudden ouster? Was there some scandal at the AQMD on Mr. Wallerstein’s watch? No. Was the air quality in the LA Basin deteriorating, due to some AQMD ineptitude that was laid at Mr. Wallerstein’s feet? Nope. So what changed? What was behind Mr. Wallerstein being sacked? In a word: politics.
This is not good!
Before I go further, a bit of background. In the early nineties I was the Director of Clean Air Programs for a statewide non-profit environmental organization. In that role I was a frequent participant at AQMD workshops and Board Meetings, first in El Monte and later in Diamond Bar, trying to push the staff and the Board to do more to protect public health.
Are we headed back to this?
The early nineties was a time of recession, and its lingering effects emboldened many polluting interests to lobby heavily against the allegedly “job killing regulations” coming from the AQMD. For the relatively small cadre of environmental activists who engaged in that debate, we were generally outnumbered and always outgunned. When I or one of my colleagues would address the Board, it was not uncommon for us to be booed by industry allies in the audience. We referred to it as “getting dissed at the District.”
Barry Wallerstein was a senior staff member during my tenure, not yet the Executive Officer, and far from an environmental booster. More often than not, we were arguing against positions taken by Mr.Wallerstein. Far too often, in our view, he adopted the position advocated by industry at the expense of the environment.
This is the man that the new Board deems too enviro-friendly to continue in his post?
How did this happen?
The short answer is that a recent change in AQMD Board membership gave the Republicans on the Board a 7-6 majority. But to really understand what is going on here, you need to know who is on the Board and how they voted. Here’s the tally, along with a link to their bio page and the source of their appointment:
|Name||Vote||Source of Appointment|
|Dr. William Burke (Chair)||Retain||Speaker of the Assembly|
|Mike Antonovich||Fire||Los Angeles County Board of Supervisors|
|Ben Benoit||Fire||Cities of Riverside County|
|John Benoit||Fire||Riverside County Board of Supervisors|
|Joe Buscaino||Retain||City of Los Angeles|
|Michael Cacciotti||Retain||Cities of Los Angeles County, Eastern Region|
|Dr. Joseph Lyou||Retain||Governor|
|Larry McCallon||Fire||Cities of San Bernardino County|
|Judy Mitchell||Retain||Cities of Los Angeles County, Western Region|
|Shawn Nelson||Fire||Orange County Board of Supervisors|
|Dr. Clark Parker, Sr.||Retain||Senate Rules Committee|
|Dwight Robinson||Fire||Cities of Orange County|
|Janice Rutherford||Fire||San Bernardino County Board of Supervisors|
One thing here is unlike the others. All of the sources for pro-business votes - the cities and county representatives of Orange, Riverside and San Bernardino - voted against clean air and for the polluters. All of the sources for pro-enviroment votes, save one - i.e., the cities of LA County, the Democrat-dominated legislature and governor’s office - voted for protecting the environment. So who is the odd man out? That would be LA County Supervisor Mike Antonovich, a true dinosaur on environmental issues - who has been on the AQMD Board since my days appearing there!
How can that be? The LA County Board of Supervisors is 3-2 Democratic, and has been since 1993. So how on earth has Mr. Antonovich managed to remain as the representative of the millions of people in LA County before their most important local public health agency when he routinely votes - as he did here - against their best interests? Are the three Democrats on the Board just too lazy to take on the job themselves, happy to leave the AQMD workload to Mr. Antonovich, even if it imperils the health of their constituents?
We decided to find out, so we sent the three Democrats on the Board this email:
Dear Supervisor –
I run a small business in LA County and am also the author of a blog, Thoughts on Solar, regarding the solar industry. I am preparing a post regarding the recent firing of AQMD Executive Officer Barry Wallerstein and I would like an answer to the following question – your response to which will be included in my post:
The LA County Board of Supervisors has a Democratic majority and has had since 1993. Yet for all of that time, Supervisor Antonovich has represented the County’s millions of residents before the AQMD Board where he has been a reliable vote in favor of polluters and to the detriment of the health and well-being of your constituents – including his most recent vote to oust longstanding Executive Officer Barry Wallerstein. So why is it that Mr. Antonovich has been allowed to remain as the County’s representative to the AQMD Board?
Thank you for your consideration; I look forward to your reply.
That email was sent to the offices of Hilda Solis (First District), Mark Ridley-Thomas (Second District), and Sheila Kuehl (Third District). Only Ms. Kuehl’s office bothered to respond, and her spokeswoman’s response was terse in the extreme:
Thanks for reaching out to our office. Supervisor Antonovich is serving a fixed term and there will be a new appointment in December.
Director of Communications
Office of LA County Supervisor Sheila Kuehl
Of course, her response doesn’t address the question posed (though it is better than no response at all), but it does highlight an important fact. After a lifetime on the Board, Mr. Antonovich is finally termed out this November. Moreover, the other Republican on the Board, Don Knabe, is also termed out. Under the election rules, if a candidate gains an outright majority of the vote in the June 7th primary, they are elected. Otherwise the top two finishers face off in the November general election.
Despite their enormous power, elections for County Supervisor tend to be down-ballot snoozers with very little public scrutiny of the candidates. Once elected, as with Mr. Antonovich, they have largely remained in office for decades. Hopefully this year will be different. Given the enormous stakes for public health in the home of the Nation’s most polluted air, the outcome of the Supervisorial elections - and the subsequent appointment of the LA County representative to the AQMD board - is of the highest importance.
This is not a political blog, but this issue is just too important to everyone who lives and breathes in this Basin to ignore. We intend to return to the issue and seek to make representation on the AQMD Board an issue in the upcoming campaign. Watch this space.
UPDATE - 3/31 - The Solar Power World Webinar has come and gone, but the good news is that you can watch it anytime by going to the SPW website, register and then watch. To get started, click on the “Watch Webinar!” button. The whole event is worth a listen, but if you wish to cut to my presentation, it starts around the 25 minute mark!
Run on Sun Founder & CEO, Jim Jenal, is frequently quoted on topics related to solar power and the nature of the solar industry. Two media events this month demonstrate that continuing influence. Check these out…
Run on Sun has long had a happy relationship with the folks at industry magazine, Solar Power World, having been named to their “Top Solar Contractors” list three years running, but this upcoming webinar is a first for us. Directed toward other solar installation companies, the one-hour presentation offers the perspective from Jim and two other industry leaders on steps to take to develop a first-class operation. From the online blurb:
Technology is constantly changing; are you using the right tools to ensure your business is operating as efficiently as possible? The desire for great customer service stays the same; are your offerings and sales techniques making it easy for the customer to go solar?
Join us in a special 1-hour presentation in which several presenters explain:
- How innovative software can streamline your business
- Why PACE financing can help enable you to service more customers
- What best practices are most effective when working with clients (this is Jim’s topic!)
Readers of this blog know that Jim brings a distinct point of view to his writing, and this presentation will certainly be no exception!
SUNMetrix is a cool portal that is designed to allow homeowners to gather information about how to go solar, and check out highly rated solar companies in their area. Headed up by Simone Garneau, and winner of the SunShot Catalyst Business Innovation Contest, we are fans of the concept, and of Simone. When she contacted Jim about contributing to her upcoming blog post, he was happy to oblige.
The result is Are Solar Panels Worth It? and here’s an excerpt:
In the past decade, the expansion of the residential solar energy market has been nothing short of astonishing. Though it’s still early days, all key market metrics point to continued growth for the coming years…
For most homeowners though, the decision to go solar boils down to a single question: is it worth it?
…Homeowners, frustrated by their ever increasing utility bills, are looking for an alternative that will save them money in the long run. They are also looking for ways to help the environment by producing their own clean energy. Jim Jenal, CEO of the solar company Run on Sun in Pasadena, California knows this firsthand:“For most homeowners it starts with a desire to save money; however, even for the most cost conscious, the understanding that they are doing something good, sweetens the deal.”
With dramatic price drops in solar equipment, solar energy is more affordable than ever for homeowners considering the switch.
Of course, as we have written in the past, the answer to the question of is solar worth it, is… it depends! (Check out Laurel’s great post on Assessing My Home’s Solar Potential: Step-by-Step to see more of our thoughts on this key point.)
Simone’s post provides lots of good information, along with quotes from other industry experts - check it out by clicking here.
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