Categories: "Solar Economics"

04/19/19

  06:53:00 pm, by Jim Jenal - Founder & CEO   , 398 words  
Categories: All About Solar Power, Solar Economics, Residential Solar

Zillow Report: Solar Boosts Home Prices by 4.1%

The folks over at Zillow are out with a study of sale prices for homes with a solar PV system compared to those without and the results are pretty dramatic.  Nationwide, homes with a solar PV system sold on average for 4.1% more than those without.  Let’s take a look at their numbers and see what that might mean for a solar installation in the Run on Sun service area…

Let’s start with the data (always a good place to start!)…

home sale prices with PV

(Data from Zillow, Inc., graph by Run on Sun.)

The graph plots the increase in home price as both a percentage (the blue bars) and total dollars (the gold line).  New York city has the highest percentage increase (5.4%), while San Francisco, because of its sky high home values, has the highest dollar increase, a whopping $41,658!  To derive these numbers, the folks at Zillow analyzed homes “listed for sale and sold from March 1, 2018 to February 28, 2019, controlling for observable attributes of the homes, including bedrooms, bathrooms, square footage, age of the home and location."  In other words, these are the very latest data possible, compiled by people who understand real estate prices!

Good looking solarOf course, Run on Sun doesn’t operate in San Francisco, let alone New York, so what does the data say for our neighborhood?  Overall, Los Angeles percentagewise lags the U.S. average - 3.6% compared to 4.1% - but because our home prices are much higher than the national average, the dollar amount is still dramatic: $23,295!  The Zillow analysis does not say how large the solar power systems were on average, but the increase in Los Angeles sales prices is more than enough to cover the cost of installing an average sized system.  

Doing the math, the Zillow study is showing an average home cost in Los Angeles of roughly $647,000.  Here in Pasadena, the average home price is a good deal higher, which would mean that the increase in the home’s value by adding solar will almost certainly cover the cost (and then some) of even a very large solar power system. To be sure, it helps if the system is installed in a way that also makes the home look better (see above), so you will want to avoid Shortcut Solar for your install!

If you are looking to make an investment in your home that will benefit you both now, and when you go to sell, forget the designer kitchen - go solar!

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04/15/19

  11:24:00 pm, by Jim Jenal - Founder & CEO   , 430 words  
Categories: Solar Tax Incentives, Residential Solar

It's Tax Day - what's that got to do with residential solar?

Tax day!At the risk of being the bearer of bad tidings, today is Tax Day!  So—apart from really bringing you down—what has that got to do with installing solar on your home?  Well here’s the thing, for quite some time now, solar installations have enjoyed a 30% federal tax credit that can be stretched out over 20 years.  Indeed, with the demise of all of the local, utility-provided rebates, the federal tax credit has been the last incentive standing.  But guess what—it too is scheduled to go away.  Here’s what you need to know…

For some folks the thought of going solar now is leavened by the belief that something much better will be coming soon.  But aside from the very real opportunity cost that arises from delaying that solar install, there are now imminent tax consequences to consider.  In particular, here is the schedule of declines to the federal tax credit for solar:

  • Now until December 31, 2019 - the full value of 30% on the cost of the system.
  • January 1, 2020 through December 31, 2020 - 26%.
  • January 1, 2021 through December 31, 2021 - 22%.
  • January 1, 2022 - ZERO!

So over the next two years a relatively gentle step down (though 4% on a $25,000 project is still $1,000 you would be leaving on the table) each year, but then it falls off a cliff as the credit goes away entirely!

Moreover, it is important to note that the credit is only available for projects that are “put in service” in the associated calendar year; which for all intents and purposes for residential projects, that means that you have received Permission to Operate from your utility.  And that is where the real issues arise.  We have seen this before—whenever a major incentive is scheduled to decrease (or go away entirely), there is a last-minute rush to get projects installed and PTO issued.  But utilities operate on their own timelines, and as the number of projects pending increases, so does the amount of time that it takes to get approved.

For potential Run on Sun clients, you should know that we will be issuing a cutoff later in the year beyond which time we will not be able to guarantee that you receive PTO this year.  That will be a function of both our pipeline, and more importantly, the pipeline for approval at the various AHJ’s and utilities in our service area.  Watch this space for updates.

Bottom line—if you are seriously considering going solar this year, and capturing that full 30% federal tax credit, Do Not Wait!  Give us a call, get into the queue early, and rest easy, knowing that next year, Tax Day will be a whole lot sweeter!

03/13/19

  07:15:00 pm, by Jim Jenal - Founder & CEO   , 411 words  
Categories: All About Solar Power, Solar Economics, SCE, Residential Solar, Ranting, CALSSA

Clean Power Alliance -- NEM Fail!

Back in January we wrote about the pending switch over to Clean Power Alliance (CPA) in portions of SCE’s service territory (Clean Power Alliance is Coming - is that a Good Thing?), noting that given the slightly lower rates, the switch was probably a good deal for most SCE customers.  Alas, it turns out that it wasn’t such a good deal for SCE’s solar customers!  Here’s our take and recommendation…

PLEASE NOTE: THIS APPLIES ONLY  TO SCE CUSTOMERS!
SOLAR CUSTOMERS IN PWP, LADWP AND OTHER MUNICIPAL UTILITIES CAN IGNORE THIS COMPLETELY!

Yesterday our trade association, CALSSA sent out this urgent notice under the headline: ALERT: CPA NEM snafu:

ACTION: For existing residential customers, we suggest you advise them to OPT OUT of the Clean Power Alliance (LA area CCA) by March 31st!

To opt out, they should call Clean Power Alliance at 888-585-3788 immediately.

What is going on here?  It seems that in their zeal to initiate the switchover from SCE, CPA fouled up how they are handling the “true-up” accounting.  As a result, solar customers who switched to CPA—and mind you, if you are in one of the affected cities, the default is for you to be switched to CPA—you will actually receive two true-up bills this year - one from SCE and the other from CPA.  CALSSA is sufficiently concerned that this could have an adverse financial impact that presumably exceeds whatever saving you might realize from the switch to CPA’s lower rates.

According to CPA, customers who OPT OUT by March 31, will only have one true-up bill this year “as if nothing had ever happened.”

For solar system owners who are part of the Solar Rights Alliance, they have already received notice directly regarding this situation.  (Not yet a member of the SRA?  Sign-up here.)

Here’s a list of cities participating in the CPA switch:

Unincorporated area of Los Angeles (e.g., Altadena) and Ventura Counties and the following cities: Agoura Hills, Alhambra, Arcadia, Beverly Hills, Calabasas, Camarillo, Carson, Claremont, Culver City, Downey, Hawaiian Gardens, Hawthorne, Malibu, Manhattan Beach, Moorpark, Ojai, Oxnard, Paramount, Redondo Beach, Rolling Hills Estates, Santa Monica, Sierra Madre, Simi Valley, South Pasadena, Temple City, Thousand Oaks, Ventura, West Hollywood and Whittier.

Once things get sorted out, if you want to switch to CPA, you will be able to do so, and we will write about it once we know more.  But for now, the prudent choice appears to be to make that call and opt-out.  If you have any issues in doing so, please let us know.

02/25/19

  10:45:00 pm, by Jim Jenal - Founder & CEO   , 445 words  
Categories: All About Solar Power, Solar Economics, Utilities, Residential Solar, Energy Storage, Vote Solar, CALSSA

Solar Bill of Rights Introduced in California Legislature

Capitol steps launch for SB-288 - the Solar Bill of Rights

On February 19th, a bipartisan bill, SB-288, was introduced in the California legislature to enshrine into State law a Solar Bill of Rights.  tl;dr Support the Solar Bill of Rights! 
Here’s our take…

The legislation, co-authored by Senators Scott Wiener (D-San Francisco) and Jim Nielsen (R-Fresno), has the enthusiastic backing of the Solar Rights Alliance, Vote Solar, and CALSSA.  If signed into law, the bill would require both Investor Owned Utilities (like SCE) as well as public utilities (like LADWP and PWP) to make changes to how they handle the interconnection of solar and storage systems, provide for compensation for storage systems that provide energy back to the grid, and report on their progress in streamlining their processes for approving and commissioning such systems.

The bill also makes some key findings regarding the value of distributed energy generation and storage systems:

  1. All California residents, businesses, nonprofits, and government entities have the fundamental right to generate and store renewable energy and to reduce and shape their use of electricity obtained from the electrical grid, whether their facilities are off-grid or interconnected to the grid.
  2. These fundamental rights to self-generation and storage extend to all California consumers regardless of income level, geography, or property type.
  3. Residential customers have a right to consumer protections that ensure adequate transparency in sales and contracts for renewable energy and storage installations and services. [To which we say: Amen!]
  4. Customer-sited solar and energy storage systems will play an essential role in helping the state to meet its greenhouse gases emissions and other environmental goals.
  5. Customer-sited solar and energy storage systems are valuable assets for managing the electrical grid efficiently and improving the reliability and resiliency of the grid.
  6. Removing barriers to the installation of customer-sited energy resources will help reduce costs and facilitate the deployment of these resources.
  7. The time required for utility review and approval of interconnection applications and the lack of transparency in interconnection costs has impeded customer adoption of solar and energy storage systems.
  8. Developing market mechanisms for energy and other services supplied by customer-sited energy resources can facilitate the adoption and deployment of renewable energy and energy storage technologies that will provide greater local reliability and resiliency benefits throughout the year, including during emergency conditions.

But as we have said in this space often before, politics is not a spectator sport—it takes active involvement to bring about effective public policy.  The good news is that we can make it super easy for you to contact your members of the California Legislature and urge them to co-sponsor SB-288.  Just click on the friendly button below:

Support SB-288

We will keep you posted as to the bill’s progress - watch this space!

01/08/19

  07:24:00 pm, by Jim Jenal - Founder & CEO   , 455 words  
Categories: All About Solar Power, Solar Economics, SCE, Residential Solar

Clean Power Alliance is Coming - is that a Good Thing?

Clean Power AllianceThe Community Choice Aggregator (CCA) for LA County, Clean Power Alliance (CPA), is set to begin service to SCE customers in 31 cities starting February 1.  As this has just sort of been announced as a fiat accompli with very little information to consumers, we wanted to set the stage for an analysis that we will be publishing that should answer the question - is this a good thing or not?

Let’s start with the basics, what is a CCA? Here’s a definition from an EPA website:

Community choice aggregation (CCA), also known as municipal aggregation, are programs that allow local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider. CCAs are an attractive option for communities that want more local control over their electricity sources, more green power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources.

That means that current SCE customers would still receive their service via SCE (including billing) but the energy is actually provided by the CCA, in this case CPA, at one of three rates: “Lean” (which is 36% renewables and lower than SCE), “Clean” (which is 50% renewables and comparable to SCE), and “Green” (which is 100% renewables and higher than SCE).  Different cities can choose for their residents the “default” rate - for example, Arcadia chose Lean, Alhambra chose Clean, and South Pasadena chose Green - but individual consumers can override that default and pick the rate they prefer.  (You can find the present list of cities switching to CPA and their default rates here.)

However, the only portion of the bill affected is the energy charge, which is generally a smaller component than is delivery.  For example, here is a comparison for SCE customers on the Domestic rate for what they pay now compared to under the “Lean” option from CPA:

SCE Domestic vs CPA Rate

So your savings is about 10% on the first 300 or so kWh (or about $5), but if you make it into the highest tier, your savings drops to just 4.5% on the largest usage.   (Interestingly, SCE’s delivery rates changed a lot more than what is seen in this shift to CPA’s Lean rate.  In particular, the delivery charge for the lowest tier went up by 5.8% as of January 1st, and by 22% for Tier 3 - ouch!)

You can find the complete list of CPA’s rates as of this writing, here.

This Domestic rate is the easiest to review - in a subsequent post we will talk about Time-of-Use rates (relevant to recent and future solar owners) and how to make the right choice to maximize your savings.

Watch this space.

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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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