Category: "Ranting"

07/06/18

  10:18:00 pm, by Jim Jenal - Founder & CEO   , 349 words  
Categories: All About Solar Power, Ranting

What do members of Greenpeace and the NRA have in common?

These days we tend to think of our country as polarized as never before. All issues seem to be “hot-button issues,” and common ground has become increasingly difficult to find. Which made a new survey all the more welcome, showing once again, that support for solar power crosses all ideological boundaries.

The study of 1,000 consumers in the U.S. found that 73% of “Red” state residents and 74% of “Blue” state residents believe that there isn’t enough being done to reduce the effects of climate change.  They were united in their views about what to do about it: 92% believe that the world’s future depends on increasing the use of renewable energy (either very important or somewhat important), and 81% believe that solar power is the most important form of renewable energy.  (We agree!)

There were some more interesting facts to ponder:

  • 77% of “Red” state residents and 80% of “Blue” state residents believe that the government should offer incentives, such as tax credits, for businesses that go solar.
  • Three quarters of both Greenpeace and NRA members believe that businesses should be rewarded for going solar.
  • Speaking of the NRA, some 38% of its members report having solar, more than twice the rate (17%) of respondents overall.
  • More than 90% of Gen Z believe that businesses should take responsibility for reducing the world’s carbon footprint, up from 74% for Millennials.

Among those who would like to go solar, 48% are doing it for the financial benefit, while 37% would do so to reduce their environmental impact, which seems consistent with what our clients tell us: they care about improving the environment, but they want it to pencil out.

Oh, and one more nugget: 92% said that they would be more willing to go solar, if they could combine it with affordable storage to protect them in the event of an outage.  Again, that is consistent with what our clients are telling us. 

Next week is Intersolar in San Francisco (where the temps are mild compared to the 110+ we  are presently experiencing!), and we will be looking to nail down that ideal storage solution while we are there.

Watch this space!

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06/30/18

  06:03:00 pm, by Jim Jenal - Founder & CEO   , 529 words  
Categories: Residential Solar, Ranting

Dropping the Ball - CPUC & CSLB Punt Disclosure Document Deadline

Frustrating solar contractsCalifornia law requires that the California Public Utilities Commission (CPUC) and the Contractors State License Board (CSLB) publish a new, “Solar Energy System Disclosure Document” for solar contractors to provide to clients as of July 1, 2018.  We just learned that the CPUC is yet to act on the SESDD draft, and isn’t expected to for months.  Moreover, the draft that we have seen falls far short of what the public really needs to protect them from those Shady Solar Contractors.

We received an email yesterday from the CSLB advising us of the delay in finalizing the SESDD, and highlighting the law’s requirements.  Frankly they are pretty meager:

  • The SESDD has to be provided to the client “prior to completing a sale, financing, or lease of a solar energy system to be installed on a residential building” - presumably as part of the contract itself.  Gee, what about disclosures as part of the sales proposal?  (More on that below.)
  • The SESDD has to be in the same language as the sales proposal - and you might say “yeah, duh!” but we have heard of companies targeting Spanish-speaking consumers with the proposal in Spanish, but the contract in English!
  • If PACE financing is used, then the PACE-specific proposal should be provided.

Interestingly, those are the only requirements called out in the CSLB email.  Unstated, but a part of the bill, is the discretion granted to the CSLB under the law to add any additional requirements that it deems “appropriate or useful in furthering the directive described” in the law.  Apparently CSLB doesn’t see a need to go any farther.

The CSLB has a draft document on its website, and if that is all that is mandated, this whole exercise will have fallen woefully short.  (You can find CSLB’s draft here.)  In a nutshell, all that one-page document discloses is the total system cost, how to contact the CSLB if you have a complaint, and your “three-day right to cancel."  Not surprisingly we have always provided all of this information in our contracts, and it is pretty shocking that some contractors have to have a mandated disclosure of how much the bloody thing costs!

So what should be here that isn’t?  How about:

  • A disclosure of the specific equipment that is going to be put on your roof. (Can we please eliminate “generic” solar systems?)
  • The proposed start date.
  • The expected duration for the project.
  • Any known contingencies or delegation of work to third parties (such as trenching, tree removal, etc.) that could delay or disrupt the project.

And while we are at it, where are the disclosure requirements for solar proposals? Such as:

  • Equipment specifics down to model numbers that can then be compared to the contract disclosures.
  • Savings analysis methodology and assumptions including:
    • Anticipated annual increase in utility costs
    • Means by which system performance was computed and annual degradation
    • Utility rate structure used to compute Year 1 savings
    • Assumed discount rate for valuing future cash flows
  • Proposed system layout on the roof.

We have a long way to go before homeowners can be assured that they are being treated fairly by solar contractors.  This delayed SESDD is but a tiny step in the right direction.

  02:34:00 am, by Jim Jenal - Founder & CEO   , 276 words  
Categories: All About Solar Power, Solar Economics, Ranting, Solar Policy

LG to Assemble Solar Modules in the US

LG - the exclusive solar module supplier for Run on Sun - has just announced that starting next year they will be assembling solar modules in the United States!  This is big news, here’s our take.

LG NeON 2 solar module

Cell detail of LG’s NeON 2 Solar Module

Ever since the Trump Administration imposed so-called “201 sanctions” on imported solar modules, there has been speculation that companies like LG would start assembling modules in the U.S.  This week that speculation was confirmed as LG announced that they would expand their existing facility in Huntsville, Alabama to create a module assembly plant capable of producing 500 MW of modules per year, with production to begin in “early 2019.”

LG intends to produce their 340 Watt NeON 2 series of 60-cell modules, the successor product to our current go-to, 335 Watt module.  It is not clear whether LG will produce modules with both white and black backsheets, or whether they will begin to manufacture the even higher efficiency, “rear-contact” modules in the U.S.  Given that LG is appealing the tariffs on the rear-contact modules (as they are on the AC module that they make with Enphase) on the grounds that those products do not compete against the cheaper Suniva and SolarWorld modules that are the basis for the (entirely bogus) tariff case (see, Suniva – the Tail Wagging the Dog), it seems that any decision to include their production here would turn on the outcome of that appeal. 

It remains to be seen how much cheaper this will make LG modules, but this appears to be a good development both for about 160 workers in Huntsville, and U.S. consumers.   The tariffs, meanwhile, remain an ignorant policy decision, causing substantial harm throughout the solar industry.

05/30/18

  02:52:00 pm, by Jim Jenal - Founder & CEO   , 321 words  
Categories: All About Solar Power, SCE, Energy Efficiency, Residential Solar, Ranting, Solar Policy

Solar Policy: A Victory and a Challenge

As a reader of this blog, you care about solar policy making, and are no doubt aware that the utilities are constantly trying to erode the value of solar.  Recently we notched a big win, but at the same time the need for vigilance is ever greater.  Here’s our take…

An Historic Win

First the win - as you have no doubt heard, starting in 2020, California will require that all new single-family homes include a solar power system.  (At present, about one in five new homes has solar added when built.)  This will help California meet its ambitious goals regarding greenhouse gas emissions, and will continue California’s leadership in home energy efficiency.

An Ongoing Challenge

As exciting as that news was, it makes it far to easy to overlook the constant, ongoing efforts of utilities, particularly the Investor-Owned Utilities (IOUs), like SCE, to erode the value of solar.  Case in point, SCE has a rate case before the California Public Utilities Commission that attempts to create rate structures that are blatantly hostile to solar power systems.  That means that SCE customers who installed solar in good faith, could see the value of their investment diminished thanks to a concerted effort by SCE to do just that!

Solar Rights Alliance

Fortunately you don’t have to take this lying down.  The Solar Rights Alliance (formerly known as Solar Citisuns) is working to organize solar system owners into a potent political force to push back against the army of lobbyists employed by the IOUs.  There are over 700,000 solar system owners in California - that is an interest group that needs to be heard.  By joining the Solar Rights Alliance you will help to make sure that your interests are being heard by legislators and regulators alike.

It is easy to join: just follow this link to become an active member of the Solar Rights Alliance.  The IOUs have the lobbyists, but we have the people!  Be heard - join today!

04/13/18

  11:10:00 am, by Jim Jenal - Founder & CEO   , 2082 words  
Categories: All About Solar Power, Solar Economics, Residential Solar, Ranting

My Electric Bill is So High! Will Solar Help? Part 3: Evaluating Competing Solar Proposals

Editor’s Note: This is the third installment in our three-part series:
My Electric Bill is So High! Will Solar Help?  
You can read Part One, How High is High, here, and
Part Two, How Do I Find Someone to Trust, here.

With apologies to the Lovin’ Spoonful, eventually you have to make up your mind between those competing bids you’ve received, but how?  Let’s walk through the proposal evaluation process and see if everything that you need to see has been included!

What’s in the Proposal?

Solar proposals come in all shapes and sizes.  Some are very short – just a listing of what will be provided, a price, and a place to sign.  On the other end of the spectrum are proposals that are twenty pages long, most of it boilerplate about what is solar and how does it work, and what a great company this is.  But strip away the boilerplate and are they really giving you much information that is specific to your situation?

What were the inputs?

The old saying, GIGO: Garbage In, Garbage Out, applies to solar proposals too.  In this case, the inputs are your past energy usage, and a detailed site evaluation that looked at your service panel and your roof.  Omit any of those inputs, and the output is likely to be of dubious value, or worse, it will mask the true cost of installing solar at your home, leaving you exposed to costly change orders down the road when the contractor “discovers” something that should have been addressed at the proposal stage!

Your energy usage for the past year is the key input – without it you’re flying blind.  If you are in SCE territory, your potential installer should be asking for access to your  interval data.  For most residential clients, that is hourly usage measurements over the entire year, and that is important to accurately model your savings under now mandatory, time-of-use rates.  Where interval data is not available, monthly, or worse, bi-monthly billing records can be used, but they will not provide the granularity needed to see how the proposed PV system will actually operate to offset your daily loads.

Seasonal load profile comparison

Assuming that interval data is available – we ask our clients provide it through a secure service called UtilityAPI – it is the installer’s responsibility to properly analyze it to know how large a system you need.  As we mentioned in Part One, we use Energy Toolbase for our data analysis as it is the most authoritative tool on the market.  The chart above shows the average seasonal usage for one particular client as processed by Energy Toolbase from the raw interval data.  This shows the average hourly usage over spring and summer, with a very dramatic peak on summer weekends around 5:30 p.m.  Recall from Part One about “low-hanging fruit” – what you are seeing here is an excessive A/C demand that, if it can be addressed, would greatly reduce the size of the PV system needed for this client.

Ideally, this analysis takes place before the site evaluation so that the installer is able to advise the potential client about actions to be taken to reduce their overall usage, and thereby end up with the most cost-effective solution tailored to their needs.

Detailed equipment line items

One of the things that we see on competitors’ proposals that never ceases to amaze us is the total lack of detail regarding the actual equipment that is going to be installed!  It is as if the homeowner is expected to pay thousands of dollars for a generic solar power system – but you wouldn’t spend thousands on a generic car, would you?  Moreover, how can you assess the value proposition of a generic system?  A company that proposes a generic system intends to install on your home whatever is on sale that week.  Maybe you get lucky, more likely you don’t, but in either case, you simply don’t know, and that is no way to make a major investment.

Your proposal should have line items for all of the major components of your system: the solar panels, microinverters, racking, and installation costs.  And those items should be specific, down to the model being selected and the per unit cost.  Only that level of detail allows you to see what you are getting and for how much.

Utility savings analysis

Determining how much your proposed PV system will save you in Year 1 is the key to the entire analysis of the proposal, and it is a two-step process.  First, your historical usage data is analyzed against your current billing rate to determine what your energy costs will be over the next year.  There are a couple of assumptions built into that assessment, namely that both your usage and your billing rate will stay the same.  If you have been in your home for awhile, your usage last year is probably a pretty good predictor of your usage next year.  On the other hand, if you moved in rather recently, or made a major purchase like a new EV, that will skew your usage going forward.  Similarly, last year’s bills were predicated on the exact details of your billing rate structure in effect at that time – and those are subject to change without notice.  So look at what the proposal projects for your bill next year without solar, and see how that compares with last year.

The second part is the more important piece - assessing how  your bill will change now that you have added PV.  Here’s where things get complicated, and a tool like Energy Toolbase becomes essential.  The proposal should show a model of your past usage overlayed by the production of the PV system.

PV production overlayed on historical usage

As you can see in the graph above (click for a larger version), the darker blue is the historical usage (we are looking at two days in July), the green is the modeled production from the proposed PV system, and the pale blue is the net energy demand.  At the peak on the right, the PV system is producing 5.22 kW at a time when the historical demand was 11.95, meaning that the net demand from the utility is 6.73 kw – and that is the basis for what the client will be billed.  You can also see that there are periods in the morning when the system is producing more power that the client historically used, resulting in power being exported out to the grid – for which the client is compensated due to net metering.

This is the analysis that must underlie your savings analysis – anything else is simply guess work.

Cash flow analysis – payback over time

Part of any cash flow analysis is the cost of the transaction.  If you are making a cash purchase you know exactly what your transaction costs will be.  But if you are financing through the solar company, or heavens forbid leasing, those transaction costs may well be obscured, it not hidden altogether.  Make certain that you have all the information you need to determine exactly what that deal is going to cost you.

For the sake of discussion, we will assume that this is a cash purchase.  What other assumptions go into a proper cash flow analysis? To start, how long is the period of the analysis?  Ten years?  Twenty years?  Thirty years?  Beware of an analysis that simply says how much money you will have saved in the end, without calling out the period in question!  In our view, ten years is too short, and 30 years is too long.  But whatever the number is, make sure you are aware of it as you compare “total savings!”

Another key assumption is how much will utility rates go up over the lifetime of the analysis?  It used to be common to see rate escalators of 6-7% per annum, but there was no real data-driven basis for that number.  (In fact, long ago we used 6.7% based on a website that claimed that the California Energy Commission had published that figure.  But when we went digging for the source, we discovered it didn’t exist - there was just this circular linking of sites each claiming to have gotten this from the CEC!) 

Over time we have consistently reduced the value that we use for our models, so that now we are using 3%, which we think is reasonably conservative.  But this is really a matter of just throwing darts at a board, and no one really knows what that number will be. Keep in mind that for comparison purposes, you should be able to see what value was used, and the higher the number, the rosier the prediction!

PV systems degrade over time, and that output diminishment should be accounted for in the analysis.  Modern solar panels degrade less than 1% per annum (the LG panels that we use are around 0.5%), but in any event, make sure that is incorporated in the model.

Finally, the value of money in your hand today is, generally, worth more than money you will have at some point in the future.  How much more valuable is a function of the discount rate applied to those future savings.  If the model ignores that, your future savings are likely artificially high.  Again, no one knows what the right number is, but a proper model will account for it and allow you to know what you are comparing.

What’s in the Contract?

Strictly speaking not a part of the proposal, it is not a bad idea to ask to look at the contract before you pick a contractor.  Many solar contracts are very long, written in tiny fonts, with lots of legalese – all designed to make you throw up your hands and simply ask, where do I sign?  But slow down, friend, the devil may be lurking in those details!  Indeed, we have had clients who were ready to sign with another company until they looked at what was in the contract!

Ideally the contract should be written in plain English, it should clearly set forth what will happen, when, and how, and it should be even-handed.

An Important Caveat

Finally, it is important to call out what even the most carefully considered proposal cannot address - future uncertainty; in particular, what will utilities try to do, and what will the CPUC let them do!

Things outside of our control - CPUC & Utilities

If you follow this blog you will know that the solar industry is under constant assault from efforts by utilities – particularly the investor-owned utilities like SCE – to reduce if not altogether eliminate the economic value of adding solar.  Whether it is by lobbying for changes to the net metering rules (which just this past year imposed additional fees, charges, and mandated time-of-use rates), or designing utility rates that make solar production less valuable, there is a constant struggle behind the scenes to undermine the solar investment of thousands of California homeowners.  (And this is not at all limited to California – attacks on net metering and efforts to impose pernicious rate structures are a nationwide phenomenon.)

Things we can control - SolarCitiSuns & CALSSA

Fortunately there are a couple of entities out there that are working hard to preserve the value of going solar.  If you are a California homeowner with a solar power system, there is an organization specifically for you.  California SolarCitiSuns is perhaps a corny name, but its mission is crucial: to organize the political power of California’s thousands of citizens with solar on their homes or businesses, or anyone who wants to be part of advocating for a clean, renewable future.  If you have solar on your home or business, click here to join!   The investment that you are protecting is yours!

 And finally, solar companies, are you a member of the California Solar & Storage Association?  We are, and you should be.  Click here to join CALSSA today! 

Beyond that, rank and file solar workers – installers, designers, finance people, anyone whose livelihood depends on the solar industry – there is an action group that you can join, even if your company is not a CALSSA member!  Joining means that you will get alerts when a crucial vote is upcoming in Sacramento or San Francisco, and give you the opportunity to reach out and show your support for the industry that provides your livelihood.  It’s easy and important. Every solar worker in California – click on this link to join the CALSSA Action Network – the job you save will be your own!

So there you have it - everything you need to know about going solar – look forward to hearing from you soon!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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