Tag: "csi data"

08/01/13

  05:52:00 pm, by Jim Jenal - Founder & CEO   , 195 words  
Categories: Ranting, 2013

State of Solar 2013 Series Starts Tomorrow

The first half of the year is in the books which means that it is time for one of our perennial favorite posts - our analysis of the State of Solar in California based on the CSI data.  Here’s a teaser…

CSI dataWe will kick off the series tomorrow documenting our methodology for analyzing the CSI data, and identifying some key trends about the number of projects, the cost of those projects, and how project size influences project cost.

Then on Monday we will continue with an assessment of Who’s Hot and Who’s Not - manufacturers and installation companies alike.

That will invariably lead to our third - and most popular - installment on Tuesday about the Outliers and Oddities in the industry.  Will long time champs Galkos Construction and SolarCity continue to dominate this closely contested category - or will some unexpected player suddenly jump out of the data and into infamy?

It promises to be an informative - and irreverent - take on the State of Solar 2013.  You won’t want to miss it!

Oh, and if there is something you want us to include in our analysis, please mention it in the comments and we will try to work it in.

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09/01/12

  01:56:00 pm, by Jim Jenal - Founder & CEO   , 198 words  
Categories: Ranting, 2012

Teaser: Outliers & Oddities

We are hard at work putting together our second annual post on Outliers and Oddities as reflected in the CSI data, but we thought we might give you a preview of coming attractions, so to speak…

Outliers

As we discovered last year, there are some companies out there who are really, really out there - $3/Watt more than the average installation cost as reported in the CSI data.  Take a peek:

Outliers - redacted

Of course, we will name names in our final post as we reveal,  “Who are those guys out there in left field?"  (Oh and we will also give praise where its due out there on the low end of the scale.)

Oddities

You may recall that last year we discovered something odd about one of these solar companies and our analysis generated a great deal of reaction.  We don’t want to give away too much just yet, but we will give you a (redacted) look at one of our findings and ask you: What is going on here?

Oddity - redacted

All will be revealed when our full post appears next week - stay tuned! (In the meantime, feel free to submit your caption suggestions for our Oddity graph in the comments!)

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08/24/12

  01:36:00 pm, by Jim Jenal - Founder & CEO   , 1151 words  
Categories: All About Solar Power, Solar Economics, SCE/CSI Rebates, SCE, 2012

State of SoCal Solar 2012 - Part 1: Overview

UPDATE - Read Part 2 of our series here: Who’s Hot and Who’s Not?


One year ago we wrote a three-part series analyzing six months worth of CSI data that turned out to be our most read blog posts ever. So back by popular demand, here is our analysis of the first half of 2012 CSI data in the SCE service area.

Methodology

First a brief review of our methodology.  We started by downloading the Working CSI data set dated August 22, 2012.  (Here’s a link to the CSI Working Data download page, and here’s a link to the data set (8MB zip file) that we used for our analysis.)  As we did a year ago, we limited our analysis to just the data from the SCE service area.  To limit our time period to the first half of 2012 (equivalent of what we did last year), we took the latest of a series of milestone dates in the CSI data (from First Reservation Date to First Completed Date) and used that as our Status Date and limited that date to values from 1/1/2012 to 6/30/2012.  Collectively, that accounted for 9,669 projects, an increase of 53% over the same period last year!

So that we can compare apples to apples, our analysis uses CSI AC Watts as the measure of system size (except where noted) instead of the more commonly reported DC or Nameplate Watts.  Why did we do that?  Well, not all 5kW Nameplate Watts systems are the same.  Some systems use less efficient inverters whereas others have panels that have very poor temperature performance (as indicated by their PTC rating), and some sites are poorly oriented or have substantial shading.  CSI AC Watts values take all of those factors into consideration - thereby giving a truer measure of the system’s actual performance.

Overview

Apart from the dramatic jump in the number of projects over the same period last year, how does the overall data for the first half of 2012 compare to that data from last year?  Here’s what we found:

2011 vs 2012 CSI systems

Even though the number of projects increased dramatically from the same time period last year, the potential installed capacity of the projects declined significantly.  This may well reflect the expiration of the federal 1603 Treasury Grant program as it became harder to finance new commercial projects after the first of the year.  Here’s how the averages changed from 2011 to 2012:

Average system data, 2011 vs 2012

The average system size in the 2012 data dropped 46% from the same period in 2011.  Likewise, rebate expenditures per Watt fell from $1.33 to $0.94, or 29%.  At the same time, the system cost per Watt also declined, but far less dramatically, from $6.37 to $6.13/Watt.  We will have more to say about system costs later.

Altogether, the data reflects a total of 519 different solar contractors, of which 213 (41%) were responsible for only one project.

Delisted by Design?

One intriguing item we noted last year was the significant number of projects - a full 11% - that were categorized as “delisted” meaning that they had been cancelled for one reason or another.  How did that number fare in our new data?  It dropped significantly down to just 4.2% of all projects, 6.3% of the potential installed capacity.

Of course, projects can be cancelled for a host of reasons.  Nevertheless, we decided to see if there were any companies that jumped out as having an unusually high rate of delisted projects.  We listed all of the companies that had any projects flagged as delisted (a total of  113 different companies) and compared that to their total number of projects.  We extracted those companies that had ten or more delisted projects and rank ordered them by the percentage of all projects that were delisted.

Here’s what we found:

project delisting by company

Holy smokes, what is going on here?  Either Remodel USA, Herca Solar and A1 Solar Power are really unlucky, or something about how they create projects would seem to be problematic.  We will have more to say on this point in a subsequent post in this series.

Oh and a note to Do-It-Yourself’ers - you have a one in twelve chance of not completing your solar project.  Maybe solar really is something better left to the pros!

Is Bigger Still Better? (Or at least Cheaper?)

We closed Part 1 last year by looking at how the size of a system drives down the cost, and we wondered if the same would hold true this year?  To find out, we excluded delisted projects from our data and divided the remaining projects based on system size with one category being systems below 10kW and the other being between 10kW and 1MW.  (Strangely, we had to exclude some real outliers from our “small” system category - can you believe it, we found systems priced at over $30/Watt?  Again, much more to say about that in a subsequent post.)

Here’s our results for the small system category:

system cost vs system size, 2012 data, systems <10kwOur trend is still downward as system size gets larger, but the slope is not nearly as steep as it was in our corresponding graph last year.  Costs start at $8.59/Watt for the smallest systems and decline to an average of $6.41/Watt for systems just under 10kW.  That’s a rate of decline of $0.24/Watt per kilowatt of system size increase, in constrast to a rate of decline of $0.34 last year. Certainly as component costs decrease, their related economies of scale would likely flatten out and that is what this data appears to be showing.

Finally, then, let’s turn to the “big” systems - those between 10kW and 1MW - how did our system costs do in that group?

system cost vs system size, 2012 data, systems >=10kw

Again, another outlier as our highest system cost here is higher than it was a year ago - $16.50 vs $15.50/Watt.  Overall, we continue to see the downward trend as system size increases, but again, not as pronounced as it was a year ago.  This year, we see the average cost of a 100 kW system coming in just below $6/Watt whereas a year ago the 100 kW benchmark was closer to $6.80/Watt.  So our trend line is lower, but flatter than a year ago.

Moreover, we see far few systems in the 500kW and up category compared to last year.  Specifically, this year we have only 24 projects that crossed that threshold (10.98 MW total capacity), compared to 32 last year (21.6 MW).  Bottom line - projects have gotten smaller and really large projects have dropped off substantially.  Without the pull of those larger systems, it is not surprising that we are not seeing the same downward pressure on costs for larger systems.

Preview of Coming Attractions…

That’s enough to get us started.  Yet to come: whose equipment is hot and whose is not?  Any significant new kids on the block (be they installers or products)?  And who are our outliers this year?  (Hint - you’ve already seen some of those names!)  So stay tuned as we name names and follow the data wherever it may lead!

And of course, if you have thoughts on cuts of the data that you would like to see, please let us know in the comments.

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.

09/02/11

  09:28:00 am, by Jim Jenal - Founder & CEO   , 210 words  
Categories: Solar Economics, Residential Solar

The State of Solar California - Part 3: Teaser!

In our last post in this series we promised to “name names” in Part 3.  Fear not - we are going to do exactly that but we have decided to push the publication date back to Tuesday, September 6 - the day after Labor Day and, as it turns out, our Fifth Anniversary!  Why are we doing that?  Well, we want to take the extra time to make sure we get this absolutely right.  And besides, who releases a big story on the Friday before a 3-day weekend?

Still, we don’t want you to go away entirely empty handed, so here’s a bit of a preview of what is to come in Part 3 - Outliers & Oddities:

Redacted outliers chart

On Tuesday we will tell you who is associated with which of those bars - which range from an installed cost of $6.56 all the way up to an astonishing $13.32/Watt!  Outlier indeed!  (Full disclosure - our installed costs are lower than any of these!)

We will also be telling you about an oddity that we have discovered in the data about one particular solar company that we think will leave you scratching your head just as it has left us scratching ours!

So enjoy the last holiday weekend of the Summer and be sure to check back here on Tuesday!

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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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