One of our latest solar clients, Jane from Pasadena, graciously agreed to do a video testimonial.
Even though we signed a contract in May of last year, Jane wanted the LG 300 Watt solar modules for her home so the project was only completed recently. Despite that delay, we think Jane’s enthusiasm for solar shines through. Check out what she has to say…
In 2014, Pasadena Water and Power is still offering some of the most generous rebates around at 85¢/Watt. Combine that with the 30% federal tax credit and there really has never been a better time to go solar.
So why not resolve to make 2014 the year you finally decide to start saving money with a Run on Sun solar power system? Give us a call and let us make you as happy as Jane!
SCE has two rate structures commonly used by commercial customers: GS-1 and GS-2. As part of our new website roll-out, we have been exploring the use of interactive data visualizations and we decided to create one to explore the impact of demand charges under SCE’s commercial rates.
Here’s some background. SCE’s smallest commercial customers, those whose peak power demand is 20 kW or less, are assigned to the GS-1 rate. This is a rate structure very similar to what one has at home - charges are based on the total amount of energy used in a month (as measured in kWh). Moreover, this is a flat rate structure - every kWh costs the same, and does not account for when it is consumed. (NB: this is changing; over the next year SCE’s commercial customers will be moved to a time-of-use rate structure, but for now, most are not. We will have more to say about SCE’s commercial time-of-use rates later.)
The GS-2 rate structure, on the other hand, includes all commercial customers with peak power demand between 20 and 200 kW - a very large segment of the commercial customer base. For them, an additional rate component is introduced - peak power charges, better known as demand charges. While GS-2 customers pay significantly less per kWh of usage, they more than make up for it in demand charges. Indeed, during the summer months, GS-2 customers pay for demand charges twice!
The net effect of all this is that GS-2 customers generally pay significantly higher bills than they would if their rate was based on usage alone. To explore that, we created this visualization. Derived from the actual rate tariffs (which are linked to on the site), this allows you to compare what your annual bill differential would be against a variety of scenarios. Since most commercial customers have a peak demand significantly higher than their average, that is the first “knob” to adjust - as average demand becomes a smaller percentage of peak, the differential increases.
To try this for yourself, click on the image above to go to the visualization page.
We would love to hear your thoughts about this tool, as well as SCE’s commercial rates. Please let us know what you think in the comments.
The Feed-in Tariff (FiT) program for LADWP has been up and running for nearly a year with the first two tranches in the books. Which raises the question: how have those proposals that were accepted, performed? Here’s our first take…
LADWP quietly posted some update statistics about its program the week before Christmas and we stumbled upon it while looking for information about the timing for the Third Trache (presumably set for later this month, although the DWP website simply says that launch info is “coming soon").
The FiT data comes in the form of an Excel spreadsheet, without supporting documentation, which leaves it open to interpretation.
Collectively, the data reports on 256 total projects, 136 from the first tranche and 120 from the second. Interestingly, the data only records three different status values for these projects: Cancelled, In-Progress and Waiting - there is no category in the data for “Completed".
From the first tranche, out of that total of 136 projects, 20 have been cancelled (14.7%), 45 are in-progress (33%) and 71 - over 52% - are listed as “waiting", though the data does not identify upon whom or what the projects have stalled. The data is somewhat more encouraging for the second tranche with only 1 project cancelled so far (0.8%), 64 are in-progress (53.3%) and 55 are waiting (45.8%). This trend suggests that as projects age they are more likely to either be cancelled or end up waiting on something.
The data tracks four milestone dates post lottery selection: Technical Screening Completed, Interconnection Study Completed, Customer Executed Contracts Received, and SOPPA Execution Date. Curiously, for the projects with a status of “waiting", not a single one of those dates is indicated. As it is hard to fathom how 110 out of 256 projects haven’t even passed the technical screening stage, we conclude that the “waiting” status is unreliable and needs to be corrected by DWP.
Turning to the cancelled projects, all but 3 of them reflect passing of the technical screening, and 15 of the 21 have completed interconnection studies. Since it is at that stage that you would expect a project to be dropped if the interconnection cost has turned out to be prohibitively expensive, it is not surprising that only seven got to the point of submitting their contracts. However, DWP had not executed any of those contracts according to the data. Which means that seven projects got so far as to submit binding contracts before dropping out.
Which leaves the category of “in-progress” projects. Out of a total of 109 so designated projects, only three have executed contracts from DWP, and all three of those were executed on September 13, 2013. This makes for a pretty dramatic winnowing process:
109 start -> 89 pass screening ->31 complete interconnection study -> 20 submit contracts -> 3 have those contracts executed, nearly a year after the process began (all of those with executed contracts came from last February’s first tranche).
Unfortunately, the data does not reveal why we are looking at such a dismal success rate one year on. Perhaps things would look different if the “waiting” segment were more revealing, but it is not.
Here’s hoping that 2014 will provide both greater success in getting projects over the finish line, as well as greater clarity in the process.
Who says solar marketing is boring? Surely not the folks at SolarEdge who got folks talking last year with their Solar Gangnam Style holiday video. Well they are back at it again this year, check it out:
Nicely done, folks, You’ve inspired us (again) to try and have a little more fun with our marketing efforts. Hopefully some of that will be apparent when our new website rolls out in January (very excited!!!).
In the stage version of The Sound of Music, there is a song about the perils of romance among the affluent titled, “How Can Love Survive” – sadly it was cut for the movie. But I’ve always liked that song and I was reminded of it while reading a piece over at greentechsolar that debated the question: Will smaller solar installers survive? Lest you have any doubt where we come out in this debate, the answer is simple: heck yeah! But let’s see why…
The debate was held last week at the U.S. Solar Market Insight event in San Diego and was reported on by the always interesting Herman Trabish in a piece titled, “GTM Debate: Will Smaller Installers Survive in Tomorrow’s Solar Market?” (H/T solarwakeup.com) The debate featured Vivint Solar’s VP Thomas Plagemann squaring off against SunPower’s Residential Solar VP/General Manager Martin DeBono.
Plagemann’s comments reflect all of the arrogance and self-importance we have come to expect from such major players:
“In this business, we have to take three essential steps,” Plagemann said. “Find and acquire customers, design and install systems, and finance the systems.”
Financing has to come first, he explained. “A typical equity finance fund of $50 million, at $2.50 per watt and 5 kilowatts per system, means 4,000 systems. Using small installers to get that scale cedes control.”
Vivint has installed home security systems nationally for twenty years and keeps that control. “We acquire customers. That’s what we do. We took that customer acquisition engine and applied it to solar. Our success in the last twelve months is the answer to this debate.”
We note that Vivint has mostly done its work outside of the California market, so that $2.50/Watt number is not reflective of their presence in our fair state. Indeed, when we last looked at CSI data for the first half of 2013, Vivint did not even crack our list of the top 16 installers. Here’s that graph:
But even if they aren’t (yet) big in CA, is there any doubt that you could have gotten the same response from someone at SolarCity? Their goal is to make solar a commodity with a standard set of offerings - if your roof fits into that model (and your FICO score is high enough) - you are golden. Just don’t look for any real care and attention to detail.
Speaking for the little guy was DeBono from SunPower (with just a little irony given the size of SunPower). He noted that:
“Small business is the second most popular institution in the U.S., after the military,” he said. People want to buy from small businesses.” In the home building industry, 40 percent of new homes are built by large national builders, but 60 percent are built by small local builders. Solar installation will break out the same way, he said.
“Large solar installers can leverage the advantage of scale as long as everything is uniform,” he argued, “but variance is the rule in solar, and variance is anathema to scale. For customers that don’t fit into a box, local installers are the answer. Variance will cap the rise of national installers.”
DeBono went on to note that forming a partnership with SunPower provides installers with leverage and a national brand.
We agree that establishing partnerships is essential, though we might question the degree to which SunPower is a national brand in the way that matters most - consumer consciousness. Toward that end, we believe that partnering with a company like LG Electronics - which truly is a national brand and has the ad budget to prove it - makes more sense for small installers. But how do you get access to the other essentials of the business?
Run on Sun has been exceptionally fortunate to have partnered with Focused Energy, who is much more than a premier distributor. They have not only been our primary supplier since we first connected a few years ago, but they have offered us support, flexibility and insight that has made them an essential part of our success. If you run a small solar business and you haven’t connected with them yet, we would encourage you to check them out.
As we have said many times, solar has to be more than just another business. We have to be better. At the end of the day, that is why the small installers will survive: because we care more, and that translates into greater value for our clients.
Bonus for sticking around to the end: