Categories: "All About Solar Power"

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!

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05/21/18

  08:59:00 am, by Jim Jenal - Founder & CEO   , 172 words  
Categories: All About Solar Power, Solar Economics, Residential Solar

LG Expands Warranty to Full 25 Years!

LG expands warranty to 25 years

Readers of this blog know that Run on Sun has been exclusively an
LG Solar shop for our clients’ solar module needs for almost as long as we have used Enphase Energy microinverters.
(We are nothing if not loyal!)

Well our friends at LG have done it again, announcing that all of their A5 modules, including the 330N1C-A5, 335N1C-A5, 360Q1C-A5, and 365Q1C-A5 modules now come with a complete, 25-year warranty including labor cost reimbursement!  Moreover, the change in warranty—from 15 to 25 years on workmanship—covers all LG modules shipped this year! That means that for all of our clients’ installs so far this year, your LG solar module warranty just got extended by ten additional years!  Now that’s value!

Of course a warranty is only as good as the company behind it—which is yet another reason to go with LG—and it helps confirm our commitment to work with LG to bring our clients the greatest value in the solar industry.

We anticipate more exciting announcements from LG in the coming months; watch this space!

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!

04/11/18

  01:51:00 pm, by Jim Jenal - Founder & CEO   , 938 words  
Categories: All About Solar Power, Residential Solar, Ranting

My Electric Bill is So High! Will Solar Help?Part 2: How Do I Find Someone to Trust?

Editor’s Note: This is the second 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.

Unless you have been living completely offline and in a cave, you are aware that there are lots of solar companies out there looking for your business.  You’ve seen them on the Web, perhaps they have called you or even knocked on your door.  You probably realize that you should do your homework and get several quotes before going forward, but how do you even know where to look?  Fear not, we’ve got you covered!

Why Trust Matters

For most homeowners, purchasing a solar power system will be one of the most expensive purchases they ever make, after their home, their education, and a new car.  Moreover, a solar power system is supposed to co-exist with your home happily for the next twenty years or more.  For all of that to work out, you need to find someone you trust.  Your gut is a good gauge here – if someone makes you uncomfortable now, chances are you will be even less comfortable down the road.

Qualifications Count…

In the search for qualified contractors there are some basic qualifications, and there are more sophisticated ones.  Let’s start with the basics: is this contractor licensed?  In California it is easy to check that out, simply by going to the Contractors’ State License Board and search on their license number (it should be on the contractor’s website) or their name.  If they don’t have a valid license, run, don’t walk, away from them! 

Beyond just checking to see if they have a license, you can also check for the type of license (only A, B, C-10, and C-46 license holders are authorized to install solar), whether there are any public complaints against them, and the status of their bonding and workers compensation insurance.

NABCEP logo

That covers the basics, but how about something more substantive?  After all, you could hold any of the necessary licenses and never have worked on a solar power system in your life! Toward that end, there is no greater indication of qualifications than to be a Certified PV Installation Professional by the North American Board of Certified Energy Practitioners (NABCEP), a distinction I’ve been honored to hold since 2010.

How select are NABCEP Certified PV Installation Professionals?  According to CALSSA, there are some 86,000 solar workers in California, of which just 294 hold that NABCEP Certification, according to the NABCEP website. 

As NABCEP puts it:

When you hire a contractor with NABCEP Certified Installers leading the crew, you can be confident that you are getting the job done by solar professionals who have the “know-how” that you need.
They are part of a select group of professionals who have distinguished themselves by being awarded NABCEP Certified Installer credentials.

You can search for a Certified PV Installation Professional on the NABCEP website here.

So does Reputation

People love Run on Sun on Yelp

If checking qualifications matters when it comes to finding a contractor that you can trust, then so to does assessing their reputation, which these days is easier than ever to do.  Search sites, like Google, display reviews for local businesses (keep in mind the top few listings are paid ads), and major review sites, like Yelp, will let you see lots of reviews of solar contractors “near” you.  (Near in scare quotes because often those companies are saying they will serve your area even if they are located far away.) 

More localized resources, like Nextdoor and Neighbor-2-Neighbor, provide a more cultivated collection of contractors from which you can choose.

Of course, nothing beats getting a recommendation from someone you trust who has gone solar, had a great experience, and their system has lived up to expectations.  If you don’t know anyone like that, you should ask your prospective contractors for a list of clients that you can contact.  Naturally, the contractor is going to list people who will tell you great things, but ask to come by and see the installation for yourself. 

Other factors to consider…

Years in Business

Companies that have been in business a long time may or may not do better work than a relative newcomer, but at least they have shown that they know how to remain in business.  (In the solar industry, that is not a small accomplishment.)   Older companies usually have more experience – although a newer company could compensate by hiring well-experienced people – and experience is important since every project presents its own, unique challenges.

Local vs National

National companies are sometimes perceived as having an advantage because they have the whole “economy of scale” thing going for them.  Yet often those “savings” aren’t going to the consumer, they are going to shareholders or venture capitalists who have funded the operation. 

Local companies, on the other hand, live or die on their reputation.  They can’t simply write-off a territory and expand somewhere else – if they fail locally, they are doomed.  So local companies often provide much better service to their clients.  On top of that, the money you spend on a local company helps support your own, local economy.  And hey, if you have a problem, you may well bump into your installer in the grocery store and you can tell her all about it!

Next Steps…

Ok - by now you know that your home is a good solar candidate, and you have found several trustworthy contractors.  Now all you need to do is look over their bids, choose the best one, and off you go!  But wait, how do choose the best bid?  Fear not, dear reader, that is coming in Part 3: Evaluating Competing Solar Proposals

04/10/18

  10:20:00 am, by Jim Jenal - Founder & CEO   , 1339 words  
Categories: All About Solar Power, Solar Economics, PWP, SCE, Energy Efficiency, Residential Solar

My Electric Bill is So High! Will Solar Help? Part 1: How High is High?

We hear it all the time: “My electric bill is so high, I just want to stick it to [insert name of utility here]!  Can solar help?” Now we are in the business of selling and installing solar, so our preferred answer is, “Of Course!"  But that is not always the answer we end up giving.  So Part 1 of this three-part series focuses on that electric bill to answer a few questions first: 1) How high is it? 2) What can you do to make it lower - pre-solar? And 3) Is your home even a good candidate for going solar?  Let’s look at each in turn…

How High is High?

Ask most any consumer how high their electric bill is and they will all pretty much tell you – too high!  So let’s recognize a few things at the start: if you are a PWP or DWP customer, your electric bills will be lower than your compatriots sufferi, er, living, in SCE territory.  SCE bills monthly, whereas PWP and DWP bill (roughly) every two months.  Most non-solar, residential customers are on a tiered rate structure - that is, the more you use, the more you pay for what you are using.  That said, not all tiered rates are alike: SCE has a true, three-tier rate structure where the cost increases in each subsequent tier, whereas PWP has a bizarre structure where the “highest” tier is actually cheaper than the middle tier!  (I wonder how many PWP customers realize that perverse incentive?) 

Taken together, what can you say about how high is high?  We would break it down roughly this way:

  • $100 per month or less - Solar is probably not going to pencil out for you.  While there are many reasons to go solar besides the economic ones, if your bill is this low, saving money is not going to justify solar.

  • $100 to $300 per month – depending on the other factors discussed below, bills in this range are more likely to have a strong economic justification, particularly in DWP territory, where a small rebate remains to help lower your out-of-pocket cost.

  • $300 or more per month – Solar is exactly what you need!  The higher your bill, the more solar makes sense.  (We had a client with bills that averaged over $1,000 per month!  His payback was four and a half years!)

To illustrate how and why that works, let’s look at the modeling that goes into sizing your system.  (For this analysis we made use of Energy Toolbase, one of the most sophisticated tools available for modeling the performance of PV systems and producing comprehensive, authoritative and transparent solar proposals.)  We created three different usage profiles corresponding to the categories set forth above.  All were SCE customers under the current Domestic rate structure in region 9 (i.e., Altadena).  The first had usage such that their average bill was under $100/month.  The second had bills between $200 and $300/month, and the third had bill in excess of $450/month.  In each case, summer usage was higher than the rest of the year.

Total electric bill savings, middle-use case

Energy Toolbase allows an installer to run multiple simulations of total bill savings based on the size of the system to be installed.  On the right is that output for our middle-case client.  It’s a little hard to see in the small version of the graph (click on it for larger), but the light green line (which represents the savings under the new, SCE-forced rate structure) levels off at 7.9 kW.  That inflection point means that a system sized larger than that is no longer providing a full economic benefit to the client.

We performed similar analyses for the other two use cases to determine the optimal system size, and to then determine their savings and payback.  Here are our results:

Payback as a function of system size

As system size increases, even without assuming any improvement in price based on economy of scale (the system price in each case is $4.00/Watt), it is clear that larger systems have significantly greater return on investment over the life of the system.  If your bills fall into that third use case, you are going to benefit greatly by adding solar.  But in that first use case, not so much.

What can you do to make your bills lower – before adding solar?

However, even if your use case makes sense, it is important to consider some low-hanging fruit before plunking down thousands of dollars on a solar power system.  The two most obvious candidates for investment are pool pumps and air conditioning systems. 

Pool Pumps

Older pool pumps tend to have single speed motors, which means that they draw the same amount of energy all the time.  But harken back to your elementary school science classes: a body at rest tends to stay at rest; a body in motion tends to stay in motion.  (Thank you, Isaac Newton!)  What’s that got to do with pool pumps?  Well, all that water in your pool has  a lot of mass and when it is just sitting there it takes a great deal of energy to get it moving - it’s a big body at rest!  But once you get it moving, it is relatively easy to keep it moving, so you need to expend a lot less energy to do so. 

Single-speed pool pump motors don’t get that, and they just keep pumping as hard as they can the entire time they are on.  That is wasteful, and expensive.  A variable-speed pump, on the other hand, embraces the eternal wisdom of Sir Newton, and throttles down over time.  That saves energy, and thus money.  Even better, utilities like SCE will give you a rebate (from SCE that is $200!) toward the cost of installing a variable-speed pool pump.

Updated A/C

The other big opportunity for savings is in an updated A/C system.  Newer systems are significantly more efficient out-of-the-box, and as older systems age, their efficiency decreases, meaning they are costing you more to operate.

Other Savings Opportunities

You don’t really have an old refrigerator running in your garage, do you?  If it is old, it is inefficient, and you’ve just put it in the hottest part of your home (short of the attic) so it has to work really hard to keep that case of beer cold.  Either ditch it altogether, or only run it when that party is about to happen!

How old is your thermostat?  Does it even work, or do you just use it as an on/off switch?  New, smart thermostats can save you money - and there is likely a rebate there, too!

How good a candidate is your home for solar?

Ok, your use case is compelling, even after harvesting all that luscious, low-hanging fruit.  So is it now certain that solar will help?  Um, maybe.  How good of a candidate is your home for solar?

We have written about this at length before, for example here and here.  If you have lots of shading, your house will not be a good candidate – you don’t want to be the owner of a system installed under a tree!

But other issues can change the value proposition for installing solar.  For example, your electrical service might be ancient and undersized, requiring you to spend additional money to upgrade to a newer, larger service.  If you are installing a relatively large PV system, that is a relatively small increase, but on our small use case, upgrading your service panel can add 10 to 15% to the total cost.

Other factors that are not show-stoppers but which increase costs are second-story and/or steeply pitched roofs (both of which just make the labor costs higher because the work goes slower), roofs other than composition shingles, service panels located far from where the array needs to go (like the array on a detached garage but the service panel in on the side of the house with a concrete driveway in between).

How can you know for sure?  Simple, have a professional installer come out and do a proper site evaluation.  So how do you find such a person?  Ah, that is the subject of Part 2: How Do I Find Someone to Trust?

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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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