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Run on Sun Monthly Newsletter

Run on Sun

In this Issue:

August, 2010

Volume: 1 Issue: 8

State of Solar in California - Annual CSI Program Assessment Reveals a Strong Demand for Solar

Three years into an ambitious ten year plan to install 3,000 MW of solar power on California rooftops, the State of Solar in California is surprisingly good - despite a difficult economy. The California Solar Initiative covers that portion of the program under the auspices of the California Public Utilities Commission (CPUC) and involves the three Investor-Owned Utilities in the state - PG&E, SCE and SDG& E. The CPUC recently issued its Annual Program Assessment. The CSI program, which is targeted to install some 1,940 MW of solar by the end of 2016 is already 42% of the way there.

The Assessment has loads of interesting statistics and it is worth at least skimming the 91 page report. Among the key findings:

  • CSI Incentives have Economic Leverage - For every dollar spent on incentives, there has been another $2.62 invested in solar power systems from other sources. The CSI incentives have leveraged an additional $5.06 billion in other capital investments.
  • System Costs are Declining - using inflation adjusted data, costs for systems smaller than 10kW (i.e., most residential systems) have fallen by 15% from January 2007 to December 2009. For larger systems, system costs declined by nearly 10% over the same period.
  • Backlog in Projects - Completed projects make up 20% of the goal while pending projects (i.e., projects for which a rebate has been reserved but the project is not yet complete) account for another 22%.
  • 2010 is the Strongest Year Yet - In just the first six months of this year, nearly 300 MW of project applications have been received by CSI and nearly 60 MW has already been installed. April of this year saw the highest MW total for new applications of any month in the program - over 134 MW.
  • Solar Systems Work - for both the grid and their owners:
    • California has over 600 MW of solar power connected to the grid at nearly 65,000 customer sites.
      • But here is an eye opener - 598 MW of that is installed in IOU territory - only 11 MW is installed in publicly owned utility territory! (I.e., the so-called "Muni's" which include LADWP, PWP, BWP & GWP!)
    • In 2009, CSI projects generated more than 390,000 MWh of energy - three times the amount produced in 2008.
    • Based on a review of actual performance data, both large and small CSI-funded systems are performing above estimates and solar customers rank their systems at a '9' on a scale from 1 to 10 for system performance satisfaction.

It would be nice to see similar analysis coming from the Muni's - which up until now tend to keep their data to themselves.

Although demand for solar remains strong, financial impediments still remain.

Next month we will
feature another in our continuing series of updates on the
PACE/AB 811 financing program in Los Angeles County (known as LACEP).

Will LACEP become a viable funding source for potential solar customers anytime soon?

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Solar Charged Driving Profiles Run on Sun

The great website, Solar Charged Driving, features a wealth of information about the synergy between solar power and electric vehicles - whether fully electric (EVs) like the Nissan Leaf or plug-in hybrids (PHEVs) like the Chevy Volt. We have been following the site for quite awhile and have learned a lot about upcoming vehicles and the issues associated with their development (such as the debate over adding sound generators so that blind people will know when the vehicles are moving). If you are interested in EVs and particularly fueling them via solar power, this website is a must read (and their RSS feed makes it easy to follow their posts).

So we were thrilled when the Founder & Editor of SolarChargedDriving.com, Christof Demont-Heinrich, contacted us for an interview about our efforts to cross-market solar power systems with this next generation of EVs. The result is a wonderful article that is now up on the web, aptly titled: "He wants your next car to Run on Sun." So true! Please check it out, and if you like what you see, please add a comment and share it with your social network.

We have also been asked to provide some articles of our own from time-to-time as a "guest blogger". You can read our first article about how the recent pricing announcement for the Chevy Volt drove a definite spike in consumer interest in learning more about the car, here.

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Corporations are Hoarding Money…
Time to Invest in Solar

According to this ABC News Report, the US Bureau of Economic Analysis revealed that corporations are hoarding $1.6 trillion in cash reserves, an all-time record. From the article:

Even looking at the companies in the Standard & Poor's 500 index of blue chips -- and stripping out financials, which are required by regulators to keep large cash reserves in order to cushion against risk -- the cash on hand number is still rather monstrous: $1.1 trillion. To put that in perspective, as a percentage of companies' total market capitalization, that $1.1 trillion is more than double the ratio seen before the crisis.
"Cash is piling up faster than companies can figure out what to do with it," said David Bianco, head of U.S. equity strategy at Bank of America.

We have the perfect answer for companies sitting on cash and wondering what they can do with it to generate a safe return - invest in a solar power system on your building(s). Don't think that is much of an investment? I think I can show you that it is, but let's first look at the competition.

If you were going to invest that cash you would want safety and a decent return. But if you put it in a CD, the highest interest rate available today would be around 3% for a 5 year CD. That's it - three percent. Not much of a return, and to get it you have to lock-up your money for five years. So how does that compare with installing a solar power system? Let's look at an example from a real world customer.

Imagine a small business like a printing company. Takes a lot of electricity to keep the presses running. For our example we will assume a $35,000 annual bill from SCE and to partially offset that we will install a 30kW solar power system on their roof. (The economics would work even better with a larger system but in our example we are constrained by the physical size of the roof.) What would that system cost and what would the savings be? We estimate a price tag of around $175,000. Applying rebates and the 30% federal grant brings the out-of-pocket cost down to $108,000. Based on our SCE rate model, Energy savings in Year 1 would be $7,900. When you apply the CEC's historical average electrical cost increase of 6.8% per year and account for the accelerated federal and state solar depreciation rates, you wind up with payback occurring in Year 6 and an Internal Rate of Return over the 25 year lifetime of the equipment of 15.1% By Year 10 you are $57,000 to the good.

Solar costs flat over time compared to utility rate increases

Here is another way to look at it. For many businesses, one of the major monthly costs is electricity and over time you know that the cost will continue to go up.

In the example above, Year 1 electricity costs from SCE were nearly $0.27/kWh. Over the lifetime of the solar power system, not even factoring in the additional savings from depreciation, the cost per kWh from solar is only $0.15 and that cost is fixed for the next 25 years. (Click graph image for a larger version.)

Unlike that puny 3% return on your money from parking it in a CD, your investment is a solar power system will pay for itself in just a few years and continue to give you ever increasing returns year after year!

If your company, like the companies in that report, has been hoarding its cash while looking for a safe place to put it, now is the time to invest in solar. Click on the button at the right or call us and we can help you start saving now.

We have the
Perfect Answer
for Companies
Sitting on Cash
and Wondering How
They can Best Use it…

Invest in a Solar Power System!

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