Categories: "Solar Organizations"

11/07/11

  05:30:00 pm, by Jim Jenal - Founder & CEO   , 823 words  
Categories: SEIA

Jim Jenal - SEIA Board Member? (With your help, yes!) - UPDATED!

UPDATE (11/7) - We just heard from the SEIA Nominating Committee that my application for candidacy has been approved and I am now officially a candidate for the SEIA Board of Directors.  So now the fun begins - with 1,100 member companies I have some work to do in getting the news about my qualifications (and my wonderful supporters) out between now and the voting deadline on the 22nd.  Please help spread the word and please continue to add your comments below.  Thanks!


The Solar Energy Industry Association (SEIA) announced at this year’s Solar Power International conference that it would open up its Board of Directors to include five members elected from the organization’s rank and file membership.  After some thought - and consultation with some colleagues in the industry - I have formally submitted my statement of qualifications to seek a seat on the SEIA Board.

Here are some key excerpts from the candidacy form that I submitted today:

Why Do You want to be on the SEIA Board?

I am running for the SEIA Board to advance the interests of the many small businesses involved in solar.  We face a great many challenges that are particularly taxing to small businesses, and I would seek to advocate policies such as:

  • Enabling PACE and similar financing vehicles for residential and commercial customers.  (In particular, I would be pushing for passage of HR 2599.)
  • Eliminating unnecessary obstacles to solar, particularly discordant and inconsistent permitting practices.
  • Smarter control over rebate programs – including cost caps – to discourage gougers and to help the public get the greatest benefit from their investment in solar while eliminating the “now you see it, now you don’t” nature of many rebate programs.
  • Advocate for the implementation of a sustainable Feed-in Tariff.
  • Encourage greater self-policing on the part of the industry itself consistent with the Solar Bill of Rights.

What Strengths & Expertise Would You Bring to the Board?

My diverse resume uniquely qualifies me to represent my constituency on the SEIA Board.  Trained as a scientist, I have a deep appreciation for, and understanding of, the technology that drives our industry.  During my 13 years as a lawyer at the national law firm of O’Melveny & Myers, I honed my skills in advocacy and broadened my understanding of the regulatory and policy-making processes.  My ten years of working in non-profits – as a teacher and as the Director of Clean Air programs in Los Angeles for a statewide environmental group – gave me the ability to explain complicated concepts simply and directly and to represent a constituency that was often otherwise ignored.

Describe Your Involvement in the Solar Industry

Since 2006 I have been the organizing force behind my company, Run on Sun.  In that role, I have overseen all aspects of our development as a company – including managing the process by which all three principals of the company became NABCEP Certified Solar PV Installers.  We devoted the resources to achieving that certification to demonstrate our long term commitment to this industry and to doing things right.

I have worked as a consultant, assisting our local utility in issues regarding assessing the performance of existing solar power systems and solar best practices.  For example, we responded to the utility’s RFP for a methodology to assess the performance of solar power systems that had been installed years ago but never verified in the field.  Our proposed methodology won the RFP and we assessed dozens of systems for the utility.

For the past two years I have authored the Founder’s Blog on our website, and have written more than 160 articles on many aspects of the solar industry.

How have You been Involved in Advancing the Solar Market?

As a strong voice on behalf of the solar industry, my blog advocates for informed policies,  and advises consumers about new products and services or problematic developments at local utility rebate programs.  I have also been a strong advocate for the SEIA Solar Bill of Rights, and I believe that as an industry we need to do a better job in policing our own.  In addition to the blog, I am also heavily engaged in other social media outlets such as Twitter (more than 9,000 followers), Facebook, Linkedin and Klout.  I am a well-regarded solar advocate on all of those diverse fora.

Drawing on my advocacy skills, I have also spoken publicly at a host of events related to solar from city or utility sponsored solar fairs, to school assemblies to presentations before public entities including the Los Angeles County Board of Supervisors, the Los Angeles City Council and the Pasadena City Council.

I would really appreciate it if any of my readers would care to endorse my candidacy by adding a comment below.  SEIA will vet the submitted nominations between now and the 8th of November with the balloting to open on November 9th and the results to be announced on November 23.

As always, thanks for taking the time to read this and I welcome your support.

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10/16/11

  10:30:00 am, by Jim Jenal - Founder & CEO   , 381 words  
Categories: All About Solar Power, SEIA, SPI 2011

SPI2011: See You in Dallas!

Solar Power International 2011 starts next week in Dallas and we will be there, thanks to our friends at Enphase Energy. If you are going to be there as well, we hope you will stop by the Enphase booth and say hi!

 

Here’s how this came about - as readers of this blog probably know, we have attended the Solar Power conference every year since entering the business back in 2006.  However, this year the show has moved out of California - a certainly reasonable decision given the size of solar markets in other states - but given the added expense, we were sadly resigned to giving it a pass.  Then, out of the blue, we were contacted by the folks at Enphase who invited us to participate with them in demonstrating how quick and easy their new M215 line is to install.  So, along with five other installers from around the country, we will be spending time at the Enphase booth - #1331 - on Tuesday and Thursday morning helping to spread the word about the value of Enphase micro-inverters.

(Full disclosure: this is the first time that Run on Sun has received any stipend or other consideration from Enphase and everything we have ever written about them and their products was done without any inducement of any kind.  The stipend in this case is to merely cover our expenses in attending the conference.)

As always, we are really looking forward to attending the show as it is a great way for us to see what innovative products are coming (it was the 2008 show that introduced us to Enphase), touch base with all of our suppliers (who will all be there) and generally get recharged from the collective energy exuded by thousands of other believers in the value of renewable energy in general and solar power in particular.  It should be a wonderful show - and will hopefully help to generate some positive press about the solar industry at a time when it desperately needs it.

So if you are attending the show, feel free to reach out via the SPI online social app or just come by the Enphase booth - #1331 on the main floor - on Tuesday or Thursday morning.  I’ll be the good-looking guy with the beard, sporting Run on Sun livery!  Hope to see you in Dallas!

10/12/11

  02:49:00 pm, by Jim Jenal - Founder & CEO   , 518 words  
Categories: Solar Economics, Solar Tax Incentives, SEIA

Congress: Extend the Solar Grant Program!

Hard on the heels of our posting about the importance of proper solar policies, the Solar Energy Industry Association (SEIA) today released a report showing the potential for additional job growth in the solar industry simply by extending the section 1603 Treasury Grant program.  This is an important policy development and Congress should extend the program through 2016.

The Section 1603 Treasury Grant Program

First some background - the section 1603 Treasury Grant Program (TGP) is an alternative to the 30% investment tax credit for solar.  The tax credit allows a commercial client to receive a credit on their income taxes for 30% of the cost of installing a solar power system.  However, not all potential clients can use a tax credit of that size (or at all) since their taxable income may not be that great.  Moreover, in many commercial transactions, financial partners are often brought in to support the project through a power purchase agreement and again, the revenue may not be sufficient to make the tax credit attractive.

The TGP simplifies that process by allowing commercial clients to apply directly to the treasury for a grant of 30% of the system cost, regardless of their tax appetite.  Moreover, the grant can be applied for upon project commissioning, meaning the payment is received possibly well in advance of receiving the corresponding tax benefit.

Advantages of Extending the TGP

The SEIA report - prepared for them by EuPD Research - outlines several significant advantages from extending the TGP.  In particular:

One-Year Extension

A one-year extension of the 1603 Treasury Program through 2012 would have the greatest impact on economic activity in 2012 and 2013, as well as enable growth through 2016 as projects complete construction and come online.

  • An additional 37,000 jobs would be supported by the solar energy industry in 2012, a 12% increase over baseline.
  • The additional cumulative capacity installed (2012-2016) would be about 2,000 megawatts over baseline, enough to power 400,000 homes.

Two-Year Extension

A two-year extension of the TGP commence construction deadline through 2013, would yield 1,000 additional jobs in the solar energy industry in 2013, a 16% increase over baseline, and would result in 3,600 megawatts of cumulative additional capacity installed from 2012 through 2016.

Five-Year Extension

A five-year extension of the TGP to coincide with the term of the investment tax credit would support an additional 114,000 jobs in the solar energy industry in 2015, a 32% increase over baseline, and would result in 7,300 megawatts of cumulative additional capacity installed from 2012-2016. A predictable five year policy framework will generate an environment that fosters industry growth larger than the potential year-to-year extensions and would create sustained momentum for the industry.

Here is what that would mean graphically:

EuPD graph showing employment growth based on extension of the TGP

Sadly, what should be a straight-forward policy decision that produces good, American jobs, reduces pollution and increases domestic energy production will no doubt face a stiff fight in Congress this Fall.

Still, as the industry prepares to meet at the annual Solar Power International Conference in Dallas next week, it is time for solar advocates to lace up their work boots and push back against those who would gut our industry just as we are starting to make a real difference - and isn’t making a difference why we got into this business in the first place?

10/06/11

  02:09:00 pm, by Jim Jenal - Founder & CEO   , 509 words  
Categories: Solar Economics, Solar Rebates, SEIA

DOE Loan Guarantees - A Smart Bet

Does the Solyndra failure mean, as some would assert, that the entire DoE loan guarantee program is a scam that puts taxpayer dollars at undue risk?  Hardly.  The vast majority of the projects approved under the program present very little risk to taxpayers. So why don’t people know that?

We came across a couple of items today that seem to put this in some perspective.  The first was a story on NPR that outlined Republican opposition to the loan program even though 16 of the 28 projects that it supported already have in place long-term energy sales contracts - making them nearly risk free.  Nevertheless, Rep. Cliff Stearns (R-Fl), now opposes the program entirely (although he backed it when it originated during the Bush Administration) and he believes that we simply “cannot compete with the Chinese” in solar panels and wind turbines.

Here’s the entire story - it is worth a listen:

By way of contrast, the second piece that came to our attention today is from Rhone Resch, head of the Solar Energy Industry Association (SEIA).  Resch was sending out an update to the SEIA membership - Run on Sun is a proud SEIA member - sharing with them a blog post he received from Dan Pfeiffer, Communications Director at the White House.  Drawing a clear distinction from Rep. Stearns, Pfeiffer cited Energy Secretary Steven Chu’s admonition over this past weekend:

The United States faces a choice today: Will we sit on the sidelines and fall behind or will we play to win the clean energy race? Some say this is a race America can’t win. They’re ready to wave the white flag and declare defeat… Others say this is a race America shouldn’t even be in. They say we can’t afford to invest in clean energy. I say we can’t afford not to.

It’s not enough for our country to invent clean energy technologies – we have to make them and use them too. Invented in America, made in America, and sold around the world – that’s how we’ll create good jobs and lead in the 21st century.

Secretary Chu is absolutely right and it should be a matter of pride for all Americans that we not only compete, but that we win this competition.  After all, Solyndra notwithstanding, we are competing successfully right now.  Consider:

  • America’s solar industry accounts for approximately 100,000 jobs right now - despite intermittant rebate programs and lots of bad press.
  • The U.S. is a net global exporter of solar technology with $5.6 billion in exports and an overall positive trade balance of $1.8 billion.
  • We have enjoyed such positive results despite other governments providing far more lucrative incentives to their renewable energy industries than what the U.S. industry has received.  Indeed, China alone has offered its solar manufacturers $30 billion in government financing - vastly exceeding the total U.S. investment.

The solution to our problems is not to throw up our hands in despair and slink from the playing field.  Rather, it is time to redouble our efforts and make the sort of investments that will really help our manufacturers - and installers, thank you - thrive.

09/06/11

  11:00:00 am, by Jim Jenal - Founder & CEO   , 1922 words  
Categories: Solar Economics, Solar Tax Incentives, SEIA, SCE, Residential Solar, 2011

The State of Solar California - Outliers and Oddities - UPDATED x2!

UPDATE x2 11/8 - Solar City’s Jonathan Bass adds his perspective on our reporting about Solar City - see his response in the comments.

UPDATE  9/30 - We just heard from Jonathan Bass at SolarCity.  Details at the end.
(Still no word from Galkos!)


Editor’s Note: We have now done an updated analysis showing the same data from 2012.  You can read our 2012 Outliers & Oddities here.


In the first two installments in this series (Part 1 and Part 2) we looked at the most recent data from the California Solar Initiative (CSI) covering the first half of 2011 in SCE’s service area. Using that data we identified trends in cost, equipment and system efficiency.  Along the way, we stumbled upon some Outliers and Oddities in the data that left us puzzled and disturbed.  In this post we name names, specifically Galkos Construction (aka GCI Energy) and SolarCity.

Before we explain to you why they are featured in this post, we would remind our readers of the Solar Bill of Rights created by the Solar Energy Industry Association (SEIA) in the Fall of 2009.  We wrote at some length about the Bill of Rights when it was introduced, but we want to highlight now what then we termed to be, “the most important right of all:”

8. Americans have the right, and should expect, the highest ethical treatment from the solar industry.

Beyond a shadow of a doubt, this is the most important Solar Right of all if we are to build an industry that is respected and trusted by consumers throughout this country. This should almost go without saying - and yet, saying it, and living it, is extremely important.

In our view, if we become aware of situations that don’t live up to that Right, we have an obligation to point them out so that our potential clients can make the most informed decisions possible. 
In honor of that principle we present today’s post.

Outliers: Galkos Construction

In looking at the data, from time-to-time a data point would jump right off the screen.  For example, examining all of the residential projects in our data - both “completed” and “pending” but excluding “delisted” - we find that the average installation cost in CSI Rating AC Watts is $8.43/Watt (in DC or nameplate Watts that average becomes $6.99).  As we noted in Part 1, that number has decreased over time and also decreases as system size increases.  Still, given that the residential sector (as designated in the CSI data) only consists of systems between 1 and 10 kW, you wouldn’t really expect significant price variation between installers over a six month period.

But you would be wrong.

Who Charges What?

Here is a chart of the Cost per Watt for the largest installation companies in the SCE service area (you can click on the chart to see it full size):

First, let us give credit where it is due.  The low end outlier is HelioPower, Inc., at $6.56/Watt, and they did it with an efficiency factor of 87% - second best of anyone on that chart. Nice.

But who is that way off in left field?  Coming in at a staggering $13.32/Watt - a full $1.40 higher than their nearest competitor and more than twice what HelioPower is charging - is Galkos Construction, Inc., also known as GCI Energy, out of Huntington Beach.  For that money, they must surely be offering only the most efficient and sophisticated technology, right?  Not so much.  To the contrary, the average installation efficiency for Galkos is only 84.9% - the second worst on the chart and well below the average of 86.11%.  In fact, 99% of the time Galkos appears to use Sharp panels - not exactly an exotic solar panel brand - and in particular the Sharp ND-224UC1 panel (66.5%). A quick Google search reveals that the Sharp ND-224UC1 can be purchased, at retail, for $2.65/Watt or less.  Given that Galkos handled 400 projects in this data set, it is hard to believe that their price for all of their equipment, particularly the Sharp panels, would not be heavily discounted.

Quality Counts

Quality, of course, is important, and the data does not reveal - though the Internet hints at - the quality of installations from Galkos.  Here is how the company describes its own product offerings (from the “Services” page of their website):

Solar by GCI [Galkos Construction, Inc.] Energy
GCI Energy is the largest solar company in Southern California with over 30,000 customers. So you get the most knowledgeable professionals, excellent customer service and a better price.

GCI Energy solar offers the highest efficiency solar panels on the market - those manufactured by Sharp. With Sharp Solar Panels, GCI Energy can tailor a solar panel installation to your specific needs and lifestyle, so you get maximum performance without a maximum investment.
(Emphasis added.)

Does Galkos actually have 30,000 solar customers?  Certainly not (nobody does).  Are they providing “a better price"?  It is not clear what their standard of comparison might be - but their price is not better than any of their major competitors in that chart.  And of course, the statement does not define what they mean by “the highest efficiency solar panels on the market,” but it seems unlikely that Sharp would make that claim.  Here’s one chart that concludes that they couldn’t (note the efficiency of the SunPower and Sanyo panels first, then search for Sharp).

All we can say in response is, caveat emptor.

Oddities - SolarCity

Now we turn to the Oddities section of this post.  Unlike the outliers, which were always of interest to us, we were not looking for the oddity we report here - it literally just jumped out at us.

Sold versus Leased

Question: What is the difference in reported cost between systems sold directly to the end customer and those that are leased (i.e., have a third-party owner in CSI parlance)?

The initial difference that we stumbled upon was so startling that we knew we needed to narrow our focus and control for as many variables as possible to isolate that one factor.  To achieve that end we restricted the data to those residential systems (i.e., between 1 and 10 kW) that were “pending” in the CSI/SCE data (thus, the newest proposed systems in the data which, based on our Part 1 analysis should mean the lowest cost systems). That way our project sample would be as homogenous as possible, eliminating cost variations based on system size and timing.

Given those restrictions, the top 5 installation companies in which the system is owned by a third party are: Verengo (482 systems), SolarCity (468), American Solar Direct (124), Sungevity (99), and HelioPower (63).  Of those five, only two also have direct sales projects pending: Verengo (7) and SolarCity (9).  Let’s see how they compare:

Lease impact on costs - SolarCity vs Verengo

What is going on here?  For Verengo, as the number of systems increases - which it does in going from sold systems to leased systems - their cost per Watt decreases - which is what we would expect.  But not so for SolarCity - even though they are leasing 50 times as many systems as they are selling, their cost for the leased systems went up - way up - as in up by $3.12/Watt!

(One possible explanation for this discrepancy would be that SolarCity uses much more expensive equipment in their leased systems than they do in the ones that are sold.  But they don’t.  On their sold systems, SolarCity always selected a Fronius inverter and their panel choices were split among Yingli (56%), Kyocera (33%) and Sharp (11%).  On their leased systems, SolarCity selected Fronius inverters 98% of the time and again split their panel choices among Yingli (68%), Kyocera (28%), and BP (3%)  with the remaining 1% scattered among Suntech, Sharp and Sanyo.  In other words, there is no significant difference in SolarCity’s equipment choices between sold and leased systems.)

Why Does this Matter?

Why does this significant cost differential matter, you might ask?  After all, customers aren’t paying that price - they are paying on a lease so the “cost” of the system doesn’t matter to them, all they care about are their lease payments.  True enough - unlike the case with our Outlier above, the end customer is not the victim here.

Recall, however, that for systems that are leased, the third-party owner - presumably SolarCity and its investors in this case - receives both the rebates and the tax benefits associated with the installation.  While the rebates are independent of the system cost (they are paid based on CSI Watts), not so for the tax benefits.  Commercial operators   (even though these are residential installations they are treated as commercial projects for tax purposes) are entitled to both a 30% tax credit as well as accelerated depreciation based on the cost of the system.

For the 468 systems that SolarCity is leasing, their total cost is $24,261,735 to install 2,412 kW.  If those installations were billed out at the $6.94/Watt they are charging for their sold systems, the installed cost would be $16,739,280 - a difference of $7,524,037.  At 30% for the federal tax credit, taxpayers are giving SolarCity an extra $2,257,211 - just from six months worth of installs in only the SCE service area.

Wow!

In the words of the 70’s pop song, How long has this been going on?

How Long Indeed

We decided to find out.

Although all of our analyses up until now in this series have been restricted to the first half of 2011, the actual data set contains entries from the inception of the CSI program.  Thus we can look at all of SolarCity’s installs going back to 2007 and compare them as we did for the 1H2011 pending installs above.  We will use the First Completed date to group these by year and analyze only “installed” - and not “pending” applications.  Here’s the data:

SolarCity Installed cost 2007-2011 - sold vs leased systems

The answer would appear to be, almost from the beginning!  Back in 2007, Solar city sold ten times as many systems as it leased.  By 2008 the ratio was down to 4-1 and ever since then leasing has been SolarCity’s predominant business strategy with the ratio of leased to sold now standing at nearly 16-1 in 2011.

Bottom Line

What, then, is the cumulative impact to SolarCity’s bottom line from this trend throughout California?  We aren’t in a position to calculate the depreciation benefits (since that is a function of the system owner’s tax bracket) but we can readily calculate the added value derived from the 30% federal tax credit due to this increased cost per Watt.

Here is our plot of the cumulative effect of those year-by-year increases:

SolarCity additional federal tax credits year-by-year and cumulative

After a slow start in 2007-08, SolarCity’s “model” really took off and has garnered the company an extra $3,000,000+ each year since 2009 (and, of course, 2011 is not yet over) for a total excess accumulation of $10,619,000.  Depending on the investors’ tax bracket, the depreciation could be worth nearly as much as the tax credit.

Double Wow!

UPDATE 9/30 - We have now heard from SolarCity

We just heard from Jonathan Bass, Director of Communications at SolarCity who took exception with our report, although he did concede that he could see how we could have reached the conclusions we published in light of the CSI data.  We encouraged him to please send us a written response in as much detail as he chose and we would publish it in its entirety.  While he agreed that SolarCity would be publishing its response, he did not commit to publishing the information here.

In any event, when we hear more we will update this post again.

What’s Next?

No doubt there is more that we could do with these revelations - but wouldn’t it be better for those with actual oversight obligations to examine this data as closely as we have and to take appropriate action?

As always, we welcome your comments - and if we hear from any of the folks named in this series we will be sure to update the appropriate post.

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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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